Stephanie Ferguson Melhorn
Senior Director, Workforce & International Labor Policy, U.S. Chamber of Commerce
Published
April 18, 2025
The U.S. continues to battle a years-long labor shortage. Although the gap is narrowing, there are many open jobs without skilled workers to fill them. Due to workforce participation trends and shifting demographics, experts predict the labor shortage will last through the next generation.
This page captures the latest data around job openings, labor force participation, shortages by state and industry, the skills gap, and more, for a quick understanding of the state of the workforce. For more workforce content, programs, and solutions from the U.S. Chamber and U.S. Chamber of Commerce Foundation, visit the America Works Initiative.
The Workforce Returns, Downward Participation Persists
The labor force participation rate has trended downward for more than 20 years. In 2000, the labor force participation rate hovered around 66%. Since 2021, the labor force participation rate has stayed mainly between 62 – 63%. While the participation rate is climbing back upward, it took a hit during the pandemic as early retirements, childcare challenges, and less immigration left the nation with a severe worker deficit.
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Plus, boosted unemployment benefits, stimulus payments, and child tax credits offered during the pandemic padded finances and the period saw some previously employed people choosing to opt out of the workforce. However, persistent inflation is cutting into savings accounts Americans built-up over the pandemic, pushing workers to return to the workforce.
Recent reports from the Bureau of Labor Statistics (BLS) show that thousands of people are entering the workforce. In August 2024, the labor force participation rate for those between the ages of 25 and 54 (prime working age) was 83.9%, marking a twenty-year high.
Even as people return to the labor force, the U.S. remains in a worker shortage: There are more open jobs than available workers. If every unemployed person in the country found a job, we would still have open jobs. This means the labor market remains competitive.
Although this gap is narrowing, there are still more jobs than workers which can hinder economic growth. If businesses can’t hire the workers they need, they cannot grow or reach full productivity potential.
The Workforce State-by-State
The Chamber’s Worker Shortage Index number indicates the number of available workers for every job opening using data from BLS. A state with a ratio below 1 is in a worker shortage, while a ratio higher than 1 means the state has more workers than job openings—a labor surplus.
The Worker Shortage Across America
Explore the interactive map below to see the impact of the worker shortage crisis in each state updated September 2023.
While the national Worker Shortage Index average is 0.91 (91 available workers for every 100 open jobs), this ratio is largely being pulled up by only 10 states. Currently, 40 states have a Worker Shortage Index of less than 0.90 as many states face challenges filling their open jobs.
It is important to note that a labor surplus does not mean all positions will be occupied. as workers may not necessarily be located in the geographic areas—or may not have the skills or experience—for the industries where the open positions are situated.
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America’s Workforce Barriers & Challenges
Shifting Demographics
One big challenge for workforce participation: the American workforce is aging. Following the Great Recession, birth rates in the U.S. experienced a decline, ultimately reaching a historic low in 2020. Unfortunately, these rates have not shown signs of recovery. This persistently low birth rate is causing the U.S. population to age at an accelerated rate.
In 2023 the number of Americans retiring hit record highs, while first grade enrollment is at an all-time low. There are fewer first grade students than high school seniors in 30 states. In 10 years, when those first graders begin entering the workforce, we will see a drop in available workers.
With Generation Z estimated to make up 30% of the workforce by 2030, there will also be a noticeable shift in attitudes towards work and work-life balance.
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The High Cost of Childcare
Expensive and hard-to-find childcare is keeping thousands of parents out of the workforce. Nationwide, childcare can cost an average of $343 per week for one child in daycare. At this rate, in many cases it can make more sense for a parent to leave the workforce and handle childcare duties rather than pay for care. According to a 2020 U.S. Chamber of Commerce Foundation study, 58% of working parents reported leaving work because they could not find adequate childcare solutions.
When childcare challenges keep working parents home, it also negatively impacts businesses. Data shows business spend anywhere from $400 million to $3 billion a year on employee turnover costs. These accumulated costs even affect the economic growth of entire states. The estimated annual loss to states’ economies as a result of childcare challenges range between $165 million to north of $9 billion.
The Skills Mismatch
Further complicating the worker shortage is a major mismatch between today’s most in-demand skills (digital and data literacy) versus the skills that available workers have on their resumes. For example, despite the demand for talent in the technology, finance, and healthcare industries, degrees in these disciples are outpaced by other majors.
Additionally, entrepreneurial younger generations continue to find ways to contribute to the economy and workforce outside of traditional job roles. In 2024, 2 million content creators made at least six figures through social media.
Employers are responding quickly to the worker shortage, deploying new strategies to attract and retain a talented workforce. As the labor market continues to shift, and workers obtain new skills to gain employment in different industries, our labor pools take different shapes.
Through the America Works Initiative, we’re helping employers across the country develop and discover talent to fill open jobs and grow our economy.
For more information on the America Works Initiative contact Stephanie Ferguson Melhorn at [email protected].
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About the authors
Stephanie Ferguson Melhorn
Stephanie Ferguson Melhorn is the Senior Director of Workforce & International Labor Policy. Her work on the labor shortage has been cited in the Wall Street Journal, Washington Post, and Associated Press.
Isabella Lucy
Isabella has created stunning visualizations tackling pressing issues like the worker shortage, the benefits of hiring veterans, the lifespan of small businesses, and the future of work.
