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Mississippi County, Arkansas, is named for the enormous river that forms its eastern border. The county is also home to several enormous steel mills—and dozens of metal-working companies that want to be close to them. 

But all this heavy industry has a problem: There isn’t enough labor. It’s not the money; workers in the county’s metal businesses make an average of US$116,000 per year, far higher than the yearly average of about $70,000 for all industries in Mississippi County. And many workers in the big steel mills earn far more than $116,000 a year, thanks to bonuses based on production.

And yet it’s so hard to find enough workers that the steel companies have started funding a county program to give workers up to $50,000 of the purchase price of a new home, if they build a new one there and stay for four years. And still, managers in the steel plants say, it’s getting harder and harder to find people to fill the jobs.  

The problem in Mississippi County is an increasingly common one throughout the U.S. On its face, that might seem logical—after all, the country just went through the post-pandemic years, when many people were returning to work, and the unemployment rate held steady at around 3 or 4 percent. 

But the trend toward increasing labor shortages goes back long before the pandemic. Economists often measure the supply of workers by comparing the number of job vacancies per unemployed worker—and that number is now six times higher than it was in 2010. One 2024 study found that just to maintain the current U.S. economy, the country needed an additional 2 million workers.

Neither is the problem limited to the U.S. In developed countries across Asia, Europe, and North America, the same pattern holds—even in countries with markedly higher unemployment rates than the U.S. has. Last year, wealthy countries around the world reported record-high numbers of job openings. In 30 of the most developed countries, the number of vacancies per unemployed worker is, on average, four times higher than in 2010. 

What’s going on?

Matthew Notowidigdo is a professor of economics at the University of Chicago Booth School of Business and a research associate at the National Bureau of Economics Research. Notowidigdo says there are a number of factors at play here. A big one is demographic: Low birth rates across the developed world mean fewer people of working age, and more retirees, than there were a decade ago. But another goes to long-term structural transformations in the economy: More and more, companies have automated manufacturing jobs—while also moving many of them to poorer countries where they pay workers less.

What does it all mean? On the one hand, there’s a historical record of inventors coming up with major technological innovations when industries don’t have enough workers for critical products. But on the other, the combined rising numbers of retirees and declining numbers of workers look likely to put an increasing strain on developed countries’ budgets for social-security payments from shrinking payroll taxes …

Allison Braden: What kinds of jobs are we seeing the biggest shortages in?