Labor shortage may slow economy

A recent Small Business Administration study confirms what southwest Missouri businesspeople already know: good help is hard to find. About half of small firms are looking to hire someone, and more than 60 percent that are looking to hire encounter some sort of hiring difficulty, according to the study "Labor Shortages, Needs and Related Issues in Small and Large Businesses."

The study reveals that more than 70 percent of small firms experiencing hiring difficulties were seeking someone with only a high school diploma, and at least 70 percent were seeking someone with one to two years of experience.

A little more than a third of firms that had problems hiring sought an employee with computer proficiency skills, and only about a third were seeking someone with a bachelor's degree or higher education.

About half of the firms looking to hire someone employed an individual less qualified than what they originally sought.

The labor shortage has large implications for the macro-economy, the SBA stated. Slightly more than half of the firms surveyed in the study that had hiring difficulties raised the wages they were originally offering, and about a quarter raised benefits to solve hiring problems.

If small firms continue to raise wages without receiving increases in productivity, their profits will decline and inflation will increase. If small businesses are constrained by the lack of available labor, their output growth could slow or stagnate slowing the overall output growth of the U.S. economy, the release stated.