Helping Small Businesses in a Tight Labor Market

By the numbers, the economy offers a number of encouraging signs. The unemployment rate has dropped below 4 percent. Over 4.6 million jobs have been created over the past two years. GDP growth for the second quarter of 2018 hit 4.2 percent. And optimism levels — ranging from business owners to American consumers — are at or near record highs.

But, while the economy overall has taken off, there have been some growing pains. Job creation has outpaced the number of qualified workers, leaving 6.9 million jobs vacant in the U.S.

This labor-deprived environment has already begun to impact businesses, nearly half of which report difficulties finding qualified job candidates. The problem has hit employers that provide skilled trade services particularly hard: Roughly three-quarters report the same problem.

Although having more jobs available than qualified candidates to fill them is better than the alternative, it’s a problem nonetheless — especially for small businesses that already have to go toe-to-toe with larger corporations to attract talent.

An environment in which small businesses are scraping to find employees is not a good sign for the future of the economy. There are over 30 million small businesses in the U.S., employing nearly half the country’s workforce. If these entrepreneurs are left vulnerable by a lack of labor, the economic advances brought on by the tax cuts and regulation reductions could be stifled.