CI 2: We Need Workers!

Labor shortages have been dominating the media’s coverage of the United States economy since the last spring. Employers lost a large chunk of workers who were forced into retirement at the start of the pandemic and hundreds of thousands more were laid off when their employers closed during shutdown.

Another monumental shift in the way some people work has been a drastic increase in remote work, which some employers are using as hiring incentives. While this option cannot be made available to all workers, it has become quite a convenience for the majority of the office workers who are maximizing their work hours by eliminating commute time and learning in to more flexible hours.

Currently, the United States is facing record-high resignations: 4.4 million workers, or 3 percent of the total workforce, quit in September 2021. These workers were those who voluntarily left their jobs, most likely because they found better ones in either the same or a different industry.

There is a simple and clear solution to the so-called labor shortage: create more good jobs. Employers must compete for workers, offering better pay, benefits, training, and working conditions in order to remain competitive, especially in certain sectors. Additionally, the federal government should enact policies that will keep the labor market tight, set meaningful floor (standards) for job qualities, and provide a basic safety net for all Americans.

When employers create better jobs – with higher wages and benefits – they can stimulate the economy by better enabling low and middle income households to spend and spur economic activity in their communities and by giving businesses a more stable, productive workforce. Supporting a tight labor market would not just be good for workers, but also good for the employers and the overall economy.

Concluding, record-high rates in low-wage industries are the consequence of decades of underinvestment in the labor market. Despite recent complaints from business leaders about a “labor shortage”, corporations have been bringing record profit margins, in no small part because the government has propped up consumer demand and provided direct support to businesses throughout the pandemic-induced recession, thus the government encourages that companies should share some of their gains with their employers.

But it isn’t simple as that…