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While releasing his budget for the fiscal year 2024, President Joe Biden announced that, under his leadership, the economy has added more than 12 million jobs, including 800,000 in manufacturing. But recent job data show that a roughly equal number of positions remain vacant following the latest hirings and losses.
According to the latest figures from the U.S. Bureau of Labor Statistics (BLS), the total number of job openings across manufacturing decreased in January by around 100,000, year over year, landing at 803,000. In construction, the total number of job openings decreased year over year by 148,000, landing at 248,000 by the end of January.
Labor Shortages Might Worsen
Meanwhile, additional statistics indicate that an ongoing labor shortage could be worsening. The Job Openings and Labor Turnover Summary shows the annual average job openings level was 11.2 million, an increase of 1.2 million from 2021. The annual average job openings rate in 2022 was 6.8%, compared to 6.4% in 2021. In 2022, there were 77.2 million hires—an increase of 1.2 million from the previous year—but total separations (quits, layoffs and discharges) also increased by 3.2 million to 72.3 million.
The number of job openings overall (across all areas and industries) decreased throughout January to 10.8 million. The number of new hires and separations changed minimally, moving to 6.4 million and 5.9 million, respectively. At the same time, a closer look at separations data shows that those losses stem more from company cutbacks than worker preferences, as fewer workers are now quitting their jobs than those suffering layoffs or discharges. In January, the number of quits decreased by 207,000 to 3.9 million, while the number of layoffs and discharges increased by 241,000 to 1.7 million.
Data shows that recent changes have impacted the smallest companies the least. In January, establishments with between one and nine employees saw little upheaval in their job openings rates, hire rates and rates for total separations, while their quits rate decreased.
Fed Proposals Could Reverse Growth
So far as manufacturing is concerned, officials for the National Association of Manufacturers (NAM) fear that despite the 800,000 positions added in recent years, the president’s focus on jobs creation and currently proposed tax cuts might be at odds with one another.
“There is no escaping the fact that the tax increases in President Biden’s new budget proposal would reverse the recent significant growth we’ve achieved in American manufacturing jobs and investment,” suggests NAM president and CEO Jay Timmons.
Timmons says a tax reform initiated in 2017 made rates more competitive, after which “manufacturers kept their promises to raise wages and invest in their communities.” As a result, 2018 was “the best year for manufacturing job creation in the previous 21 years,” he adds. But, according to the Manufacturing Institute (MI), those gains were met with difficult times in 2020, when the manufacturing industry lost 578,000 jobs amid the COVID-19 pandemic, representing six years of gains (but a far cry from the 1.4 million lost amid the onset of the pandemic). Over the past two years, the field has created more jobs than at any point since the Reagan administration, Timmons says.
According to NAM, U.S. manufacturing is expected to have 2.1 million vacancies by 2030.
