Worker Shortage to Blame for Supply Chain Issues—When Can We Expect Improvements?

Prices continue to increase across the United States, with the Labor Department's consumer price index reporting a 0.4 percent jump on Wednesday above the 0.3 increase predicted by the Dow Jones estimate.

Alongside these rising prices, sit an ever-present supply chain bottleneck. In Los Angeles, as much half a million shipping containers wait unopened as 58 cargo ships wait to dock. In Savannah, Georgia, 24 ships sit waiting to anchor as workers remain busy at the dock.

This does not stem from matters abroad, David Dollar, an expert on the global economy with the Brookings Institution, told Newsweek. Other countries are sending cargo ships across the pacific at an "unprecedented" number, he said. Instead, this matter stands squarely as a U.S. issue, one tied to the country's continued struggle to fill empty jobs.

"There's a shortage of truck drivers, so you've got basically a supply bottleneck on the U.S. side," Dollar told Newsweek.

"Some people are taking responding to this whole pandemic experience by retiring early or rethinking their lives," he said. "We are an aging population where it's an effort to keep people in the labor force. This happens, and quite a few people who were approaching retirement age naturally say it's not worth going to work in this environment, so they retire early."

Driven By Exports, China Expected To Become
Cargo ships remain backlogged at Los Angeles ports as the nation faces a worker shortage. Here, ships are positioned under cranes at Port of Oakland on August 16, 2010 in Oakland, California. Photo by Justin Sullivan/Getty Images

The average age of a truck driver approaches nearly 50, according to the Truck Driver Institute. In turn, Zippia, a career services company, analyzed data that places the average age of a dock worker at 40-years-old.

While age serves as one potential reason for the shortage, Dollar said these industries offer wages that have risen at a "healthy clip." Within the American context, he said supply chain jobs pay well, citing the example of truck drivers who earn slightly more than manufacturers who are generally cited as having a "good job."

Unfortunately, when it comes to labor participation, Dollar said the issue comes with a number of unknowns.

"The labor force participation rate is a variable that bounces around that I think we don't understand very well," he told Newsweek. "It's down now, and it may very well bounce up after we get the pandemic under control, but historically, it's bounced around, and often we don't understand why."

Truckers at Port of Long Beach (CA)
Trucks play an essential role in America's supply chain, yet the industry faces an aging workforce. Above, semi truck drivers arrive to pickup and deliver products at the Port of Long Beach on October 27, 2014 in Long Beach, California. Photo by Bob Riha, Jr./Getty Images

A bounce-back could be needed to turn the nation's increasing price around. The shortage of workers puts pressure on the costs of bringing goods to market, Dollar said. And as goods have grown in demand, prices have risen as products remain off the market, tied up in the supply chain bottleneck.

However, Dollar said there's "reason to be optimistic" as the country gets the pandemic under control. He agreed with assessments that inflation will naturally slow down by the middle of 2022, around that time he expects many supply chain bottlenecks to work themselves out. By 2023, he said markets should largely be back to normal.

"Some of these supply chains probably won't really have their problems really worked out until 2023," Dollar told Newsweek. "But because there are quite a few different areas where prices are high, I'm skeptical that everything continues as it is for another year and a half. I think probably there'll be easing of supply chain bottlenecks for certain products [before then]."