Long term I don't think the "labor shortage" is long term or catastrophic, and the current situation has multiple causes.
1. Older workers retired, especially those whose positions were shut down during the pandemic. Yes, I know, these workers did not typically fill the service, retail, and hospitality sector jobs (though some did, especially in the management / supervisor positions). However, with the economy reopening many of these choose to remain retired or are finding that age discrimination is still a very real thing (it is true). This opens up opportunities for those who might otherwise not have many choices outside of the service, retail, and hospitality sector.
2. While not a large group, some retire earlier than planned to help care for an ageing parent, as I did. Now that that obligation is past, I find that few will hire a 71-year-old to work cattle (what I know how to do best), and though I am physically capable I don't necessarily want to anymore work a vigorous 40-50 hours per week outside in bad weather. Multiple part time gigs with more flexibility suits me more now.
3. An "over scheduled" economy. While some sectors need to operate 24/7/365 ... emergency responders, hospitals, care facilities, funeral homes, livestock production, crop production seasonally (and with the latter three it is more of having someone "on call", the actual work may only be 10-15 hours per day), most don't need to be "open for business" all that time. I had a short lived career with Lowe's in 2020 (the most miserable 40 days of my life). During Day Light Time hours they are open 6:00 AM - 10:00 PM (except Sunday, 7:00 AM - 9:00 PM). While I didn't have access to the sales numbers there were many times at the start and end of the day where it didn't seem like they were doing enough sales to cover the overhead of keeping the store open, yet they were ALWAYS complaining that they needed more help. Businesses could align their open hours with the available work force! Why does a grocery store need to be open 24 hours a day, or 5:00 AM - 12:00 PM? And people shouldn't be shopping and eating out on Sunday's, except for absolute essentials or while traveling, so there shouldn't be a need to make other people work on Sunday's to serve them.
4. There are ways people get by other than public benefit checks, especially if they are single. I'm on the board of the local St. Vincent de Paul Conference and volunteer at their food bank, where I meet a lot of these people. They may live at home or a bunch of people may share a house or apartment. In urban areas public transit, a bicycle, or a scooter can eliminate the need for a car (it can be cheaper to rent a car for the few times one is really needed, rather than own). Urban gardening is a real thing, community garden plots are available, a lot of salad can be grown on an apartment balcony, chickens can be kept in the back yard. Every state has a Master Gardener program which can help people learn how to garden. SNAP benefits and food banks can stretch available income, shopping at thrift shops, yard sales, church rummage sales for cloths and household goods stretches it further. In some areas an underground cash economy may be thriving with lots of temp but regular gigs, which won't show up in the employment statistics.
Nobody is getting rich doing #4 and those who do work it usually hope it is only temporary until they can find something better. In many cases they may find #4 preferable to a minimum wage service, retail, hospitality sector job with erratic and unpredictable hours and no benefits.