May 12, 1999 (The Editor’s Desk is updated each business day.)

It takes more information to understand labor shortages

No single measure of occupational labor shortages exists. However, a wide variety of available data can be used to assess potential shortages. For example, dramatic growth in employment is likely to reflect a significant rise in demand for a particular type of worker. An unusually low unemployment rate or rapidly rising wages might signal that demand for such workers exceeds the supply.

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Used alone however, even this array of statistical data is not adequate to definitively identify labor shortages. Job vacancy data would be another obvious input to a thorough analysis of labor shortages, if they are available. But even when such data are available, it is important to keep in mind that just because employers have vacancies does not mean a shortage exists.

Plainly, general statistical data on labor shortages also should be combined with background information on specific occupations and detailed knowledge of the workings of the labor market. Conclusions about shortages should not be based on general labor market statistics alone or anecdotal evidence alone.

An analysis of identifying labor shortages was prepared in the Employment Projections program. Find more information in "Can occupational labor shortages be identified using available data?" Monthly Labor Review, March 1999.