Supply and demand in modern workforce


One of the fundamental rules of business is the supply and demand relationship between buyers and sellers. When there is a high demand for a product or service but a lack of supply, the cost for said products and services will increase drastically. On the other hand, when there is a large supply of products or services and a lack of public interest, prices will drop to gather more appeal. This business rule applies directly to all careers.

As technology advances, most careers begin to find convenience in resorting to digital work. With jobs becoming strictly virtual, finding individuals willing to work or aware of work outside of a computer screen is challenging. The drastic decline in people tackling essential, in-person careers leads to a drastic incline in market prices.

In recent years, market prices have surged due to multiple factors – especially the COVID-19 pandemic. Alongside these factors, and sometimes as a result of them, plenty of professions began to struggle or go entirely remote. According to Zippia, approximately 26% of employees in America work virtually. By 2025, it is predicted that around 36.2 million Americans will be working from home. Prior to 2020, only six percent of careers were done primarily from home – including digital work. 

Globally, careers took a massive hit shortly into 2020. According to the Bureau of Labor Statistics (BLS), nonfarm payroll employment in America alone had a sharp plunge of 9.4 million. The BLS stated that this was the largest drop in the Current Employment Statistics’ (CES) history. Since then, the United States has not completely recovered from the economic downturn. 

As stated in an article published by MarketWatch, the labor market continuously turns down millions of Americans – despite a growing demand for Americans to secure jobs since 2014. For instance, mechanical engineers are one of the most in-demand careers globally. According to BLS, employment for mechanical engineers is projected to increase by merely two percent by 2031, which is substantially less than most occupations. In 2020, there were about 15,600 employed mechanics in Pennsylvania. This number is expected to increase by slightly over 1,000 in the next decade. For consumers, this means that the cost of mechanical services is significantly higher than years past.

To further elaborate, the cost of mechanical engineering services is determined based on labor. Labor costs are normally charged by the hour, which makes these services costly as is. Since there are very few mechanical engineers in America, their workloads are significantly heavier than before. Therefore, the mechanics charge more for their labor since there is a high demand for their services. 

Virtual work goes hand-in-hand with the lack of nonfarm payroll enrollment. As previously mentioned, approximately 26% of employees in America work virtually. Although this trend began in 2020, the necessity of digital knowledge was required for careers years prior. In 2002, only 40% of jobs required minimal knowledge in technology, and only five percent required extensive knowledge in the subject. By 2016, these numbers rose substantially; 48% of jobs requiring medium knowledge in technology, and over 50% requiring some knowledge in technology. 

From an outside perspective, digitalization in the workforce sounds amazing. Not only is it convenient for those unable to travel, but it also makes work far easier. When looking into the perspective of supply and demand, this is far from the truth. 

With such an impressive, rapid supply of strictly virtual careers, and the convenience of digitalization, people entering the workforce resort to these options. This increases the demand for people to take on essential, in-person careers. The demand for people to take on these careers-considering the rules of supply and demand-therefore makes the cost of acquiring these services increase. 

It is impossible to remove digitalization from the workforce, and economic recovery is not something a nation could tackle overnight. The most that can be done is to draw recognition towards in-person careers and how essential they are to the economy. That way, the supply and demand system for the workforce can reach a stable balance.