3 things keeping workers from coming back - and federal unemployment benefits aren't one of them

• Employers are still scrambling to find workers as shortages persist and workers won't return.
• Rob Kaplan, the president of the Dallas Federal Reserve, told Bloomberg what may be driving this.
• Workers are retiring, dropping out to be caregivers, and reeling from virus fears.

You've probably seen the "now hiring" signs hung in windows at stores and restaurants or heard someone say "people don't want to work right now."

It's true, the labor market seems pretty hot - employers are scrambling to lure in workers with new benefits, workers are still quitting anyway, and wages are on the upswing (and even outpacing inflation).

But the big question remains: Why?

In an interview with Bloomberg's Tracy Alloway and Joe Weisenthal, Rob Kaplan, the president of the Dallas Federal Reserve, broke down some of the factors that could be contributing to the current tightness in the labor market. And no, it's not just enhanced federal unemployment benefits.

"I've felt for some time, and I've said this publicly, that the unemployment benefits were only one piece of the larger puzzle," Kaplan told Bloomberg.

Indeed, preliminary research has found that cutting off benefits early didn't get people to rush back to work - and an analysis from Homebase suggested that employment was actually growing faster in states that kept the benefits.

So what are the other pieces of the "puzzle" keeping workers back? Kaplan laid out three points.

Retirement

Kaplan cites the number of workers retiring as one big factor in the current crunch. The Federal Reserve Bank of Kansas City found that the number of people retiring rose by 3.6 million from February 2020 to June 2021 - a 1.3% increase, far higher than the prior decade's average annual increase of 0.3%.

Interestingly, the increase is driven by retirees who are not returning to the labor force, even though The Kansas City Fed says that many are still young enough to return to work. However, fears of the virus stand in the way. It could take over two years to "fully unwind" the increased number of retirees.

And Kaplan said that "this aging issue, which has been with us for years, is going to stay with us for the foreseeable future."

Caregiving

Caregiving has emerged as another reason workers aren't returning, as schools and childcare centers alike shuttered for in-person instruction. Kaplan said that approximately a million and a half caregivers have left the workforce; an analysis from the Federal Reserve Board of Governors found that labor force nonparticipation associated with caregiving went up by 0.7% from January and February 2020 to April and May 2021.

Experts are mixed on what the start of school will mean for the parents who dropped out, especially mothers. But Kaplan said that he's hopeful "expanded childcare, in-person school, that will help get a chunk of the caregivers back into the workforce."

But the Delta variant is already jeopardizing the start of the school year: As Insider's Connor Perrett reports, a whole Georgia school district had to shut down a little less than two weeks into the school year following an outbreak.

Fear of the virus

The school closures illustrate one important point: Workers are still very concerned about the ongoing - and more infectious - pandemic. The Delta variant has already made a dent on the economy, and how Americans perceive it.

When it comes to the variant, Kaplan said that "we will not see a step backward in the economy, but we might not see the progress we were hoping to see." He added: "I think it's going to delay the matching process between businesses who were trying to hire workers and workers stepping into the economy."

One thing that might get workers back quicker: Higher vaccination rates. The White House has said that job growth was up because of vaccination rates, not unemployment benefits - something that an analysis by economist Luke Pardue at payroll platform Gusto also found to be true.