Of all the phenomena growing out of the COVID-19 pandemic, the most baffling – and interesting – is the unwillingness of so many of the unemployed to go back to work. I’ve never seen anything like it in my 64 years.
Millions of jobs are available for those who want to work – and not just low-paying positions in retail or nursing homes. Even truck drivers, who average more than $50,000 per year in Connecticut, are in short supply. So, too, are registered nurses, whose wages in our state average more than $83,000 annually.
Many observers were quick to blame generous unemployment benefits for providing a disincentive for workers to re-enter the labor force. And there is something to that. The extra $300 in benefits from the federal government expired in September in the states, including Connecticut, that were still participating in it. The following month, an encouraging October jobs report issued by the Bureau of Labor Statistics reported 531,000 jobs added, as the unemployment rate dropped to 4.6%, the lowest since the onset of the pandemic nearly two years ago.
At my day job in Berkshire County, Massachusetts, I wrote a story about the scarcity of workers locally and quoted both a state representative and the head of the local chamber of commerce as saying they thought the extra $300 per month played a role in the labor shortage. The backlash from worker advocates was swift and furious. I still fail to understand why progressives are so offended at acknowledging the obvious: some people – but not all – would rather get paid not to work than to work.
As I reported at the time, it is equally obvious that the unemployment benefits did not and do not not account for all the labor problems. In his morning newsletter of May 20, entitled “The myth of labor shortages,” Pulitzer Prize-winning New York Times columnist David Leonhart posited that if there is indeed a lack of available workers, “capitalism has an answer” – namely offering higher wages.
Leonhart cited several large companies that have raised hourly rates – in some cases dramatically – for their workers, including Bank of America, Amazon, Chipotle, Costco, McDonald’s, Walmart, J.P. Morgan Chase, and Sheetz convenience stores. Those large corporations can absorb it, but a mom-and-pop retailer in Torrington or Willimantic, not so much. Still, it’s all a part of what Leonhart calls the normalization of low wages:
“That so many are complaining about the situation is not a sign that something is wrong with the American economy. It is a sign that corporate executives have grown so accustomed to a low-wage economy that many believe anything else is unnatural.”
If nothing else, it is now clear that America’s low-wage bubble has burst. That’s not to say it can’t be reinflated, but for the time being, there is a renewed focus on wages necessitated by the reordering of our lives in the face of a deadly virus that will likely define an entire generation.
Where Have All The Workers Gone? https://t.co/ijS3awiWUS
— ctnewsjunkie (@ctnewsjunkie) November 19, 2021
In a CTNewsJunkie story headlined, “Where Have All The Workers Gone?” my editor, Christine Stuart, reported last week on a recent analysis by the Pew Charitable Trust that found Connecticut is one of only eight states with more unemployed workers than job openings. On Thursday, Connecticut’s official unemployment rate dropped from 6.8% in September to 6.4% in October. Still, many employers report that they’re having trouble filling positions.
“There are 79,500 fewer people working now than in February of last year, despite something on the order of 70,000 job openings – the question is this: where have these people gone?” asked CEO Chris DiPentima of the Connecticut Business and Industry Association.
There are multiple reasons why jobs are not being filled. Some people are having trouble finding child care because of – you guessed it – a shortage of child care workers. Indeed, some child care centers have had to close because of it, or they never reopened after it was deemed safe to do so, creating so-called child care deserts. Other parents who were lucky enough to secure child care may have found it so expensive that they might as well stay home and take care of their kids themselves.
Many American households have more cash on hand than they used to because occupants have not been commuting to work, traveling for pleasure, eating out, or seeking entertainment outside the home.
And they have been receiving stimulus checks that, in many cases, wind up in savings accounts. Indeed, the savings rate in the U.S. has risen substantially during the pandemic, even as consumer spending fell, though it is starting to catch up. Property values have also soared, giving homeowners better access to lines of credit in the form of home equity loans.
It’s a simple concept that capitalists and market aficionados such as yours truly understand. Increase the price for something and you will see more of it. Raise wages and you will find more workers. Sadly, companies that are unable or unwilling to do so might perish. The system can be cruel not only for workers, but also for business.
Contributing op-ed columnist Terry Cowgill lives in Lakeville, blogs at PolitiConn and is managing editor of The Berkshire Edge in Great Barrington, Mass. Follow him on Twitter @terrycowgill or email him at firstname.lastname@example.org.
The views, opinions, positions, or strategies expressed by the author are theirs alone, and do not necessarily reflect the views, opinions, or positions of CTNewsJunkie.com.