The Labor Shortage and Its Impact on Live

Unemployment in the United States is at near-historic lows.

The July jobless rate of 3.5% was the lowest in a half-century. The number crept up slightly in August, but 3.7% is still historically low and meets the general standard of what economists consider maximum employment.

The devil, as ever, is in the details. Unemployment can be defined in myriad ways. The most-often reported number – the rate on the nightly news and the one crowed (or complained) about by politicians and their mouthpieces — is what the Bureau of Labor Statistics defines as the  official unemployment rate. It’s a measure of “people who are jobless, actively seeking work and available to take a job.”

It does not include, for example, those who have left the labor force or those who have stopped seeking work, an increasingly large number in the wake of the pandemic. 

One recent study estimated the lingering effects of the pandemic resulted in 500,000 people in the U.S. alone simply leaving the workforce.

There’s also plenty of theoretical discussion about whether maintaining maximum employment is “good;” in classical economic theory, unemployment is inversely correlated with inflation, and 2022’s sharp rise in prices as unemployment sunk to historic lows bears it out. Thus, after decades of near-zero interest rates, the Federal Reserve has adopted a contractionary monetary policy to ease inflation. 

Theoretically, the higher price of money should increase joblessness.

More practically, leaders in nearly every sector of the economy are complaining about labor shortages and the difficulty of finding employees.

The live performance industry is no outlier here and faces even steeper climbs to get back to pre-pandemic hiring levels. 

“On a day-to-day basis the labor shortage is tough on everyone, especially on the touring crew, because when you don’t have enough local hands to help out, it ends up falling back on the people that are on the road who then are continually pushing harder to try to get things done,” Sara Full, who managed the Lumineers’ impressive “Here & Now” tour and learned how to make do, said.

“It’s more work and more pressure and less rest time for all of our touring crews. Doing a stretch as long as we did, by the end of it you could just see that people were a little weary of dealing with labor issues every day. And we have such a fantastic crew too. It takes a lot, obviously, to make them tired, but the labor stuff was really tough across the board.”

Hospitality and leisure in general was the hardest-hit sector of the economy when pandemic measures essentially shut down large gatherings. BLS estimated that nearly half of the jobs in that sector – which includes not just the various moving parts that make live go, but also hotel workers, for example – disappeared between March and April 2020.

The unemployment rate in that sector remained at more than 20% for the balance of that summer and didn’t return to single digits until August 2021.

Despite seasonal fluctuations – more common in that sector than most others in the economy, due to the nature of both travel and live performance – the jobless rate is back to an industry-standard 4% to 6%.

So the supply side is seemingly operating fine. The demand side, though, is still in a precipitous climb.

After the massive layoffs at the start of the pandemic and nearly two years without major events, the live industry (and the leisure industry in general) was clamoring for a return to normalcy when the pandemic situation began to ease.

But there was no easing back into things. Promoters, agents and artists rushed to get back on the road, creating a hiring frenzy resulting in a decline in industry joblessness almost as steep as the increase of April 2020.

That, then, created a positive feedback loop. The demand for live-performance workers increased so sharply that there simply weren’t the bodies available.

 This is true regardless of whether the jobs are skilled – say, sound and lighting technicians – or unskilled, like ticket-takers and ushers.

As Full notes, the challenges in finding workers puts a strain on a tour’s traveling crew and on the budgeters. 

“To be candid, the good news is that we sold a lot of the tickets this summer,” Full said. “So I think it was less of a pressure point for us as it is for other friends on the road right now. But it’s definitely made it extremely unpredictable. It’s made traveling very difficult, and much more expensive. So all those challenges are real and I don’t think I’ve noticed anything measurably better yet. It’s just going to take time to replace the workforce that we lost and get everything back to some measure of normalcy, but credit to everybody on the road this summer, both on our tour and the other ones, and how resilient everyone was.”

There are now nearly 1.7 million job openings in leisure and hospitality, according to BLS, nearly half a million more than the pre-pandemic peak of July 2019.

BLS measures can tell us a lot about labor –  ever wanted to know what the long-term employment trends are for bellhops? – but the bureau’s bailiwick is numbers, not feelings. Many workers in the live industry may, after a year and a half out of the industry – have decided the life was no longer for them. It has long, often unconventional, hours, sometimes spent away from home and it’s hard work. Maybe these workers simply found other outlets for their passion or vocations they preferred.

But BLS does a great job of recording trends in pay and, frankly, the live industry just isn’t keeping up; in part, as Full explained, because inflation is so steep it makes budgeting “a shot in the dark,” since what was budgeted in, say, April, may not be sufficient in September. Budgeting is also made more difficult by the change in purchasing habits for fans, who now tend to wait longer to buy tickets due to lingering anxiety about cancellations and inflation eating into disposal income.

In the catch-all category of performing arts and spectator sports which includes the overwhelming majority of support jobs for the live performance industry, the median hourly wage is up $1.75 – a little more than 5% – from March 2020. But inflation is up nearly 16%. Just to keep pace with prices, that median wage needs to climb another 10%. 

But even that broad number doesn’t tell the whole story, because those wages are stratified.

For highly-skilled jobs – think engineers, stage riggers, lighting crew – wages are actually outpacing inflation, having risen in some cases by 20% to 25% since before the pandemic. And these are jobs already on the upper echelon of the spectrum.

And what that means is that the lower-paying jobs are, in many cases, actually paying less – not just when adjusted for inflation, but in real dollars.

What’s more is the difficulty in hiring creates real quality-of-life problems for those who are working.

Theoretically, the Federal Reserve’s move to increase interest rates should ratchet back inflation and the increased cost of money should – theoretically – result in an increase in unemployment across the economy and that – theoretically – should increase the number of jobseekers, including perhaps those who left the live industry for other jobs.

But whether the theory translates into practice is unknown; if the industry can’t find equilibrium, the problem may continue to build on itself, further straining existing workers who, like their former colleagues, may decide life on the road is no longer worth it.