Final answer:
An employee shortage occurs when projected labour demand exceeds the available projected labour supply. Recessions can exacerbate this issue by reducing firms' ability to hire, but imbalances may self-correct as labor demand grows over time.
Step-by-step explanation:
A shortage of employees occurs when the projected labour demand exceeds projected labour supply. This means that there are more jobs available than there are workers to fill them. In contrast, when projected labour supply exceeds projected labour demand, there's an excess of workers relative to available jobs, leading to higher unemployment rates. When an economy experiences a recession, firms find it challenging to sell goods at existing market prices and are reluctant to hire workers at current market wages. This can be further exacerbated by factors such as an aging labor force in some regions causing labor shortages, and events like an influx of workers into the market, which can shift the labor supply curve to the right without creating new job opportunities. Over time, as labor demand grows, these imbalances may correct themselves, leading to decreased unemployment and rising wages.