Here’s the conclusion of the editors of the Wall Street Journal’s observations on the latest Bureau of Labor Statistics’s Employment Situation Report:
By now anyone who wants a job can get one. Yet employment is still 7.1 million lower than in February 2020 while the Labor Department’s Jolts report showed 9.3 million job openings in April. The $300 federal unemployment bonus, which Democrats extended through Labor Day, allows many workers to earn more not working—and for up to 99 weeks in some states.
As a result, many workers are picky about which jobs they take, which San Francisco Federal Reserve President Mary Daly says is good. Not for many businesses and their customers. Ninety-four percent of nursing home providers said they had staffing shortages in the last month, and the industry continues to shed workers.
The reply is that businesses can merely increase wages, but most are doing exactly that. Many are offering bonuses for new hires. Average hourly wages increased 10.4% for production-level retail and 28% for leisure and hospitality workers at an annual rate. Disney recently announced a $1,000 signing bonus to recruit cooks who earn $18 per hour for its Florida theme parks.
As businesses bid up wages, more workers are quitting for higher-paying jobs. The number of workers who voluntarily left their jobs to look for other work increased by 164,000 to 942,000. High worker turnover makes it hard to run a business, and the labor shortage is causing supply-chain problems and pushing up prices. Inflation has eroded wage gains in recent months.
The jobs recovery was always going to accelerate as the pandemic eased, and the labor market will recover faster as the $300 bonus for not working ends. Twenty-six states have either stopped accepting the bonus or soon will. The economy’s problem now isn’t too little work. It’s too few workers willing to do the work.
I think they’re oversimplifying things quite a bit. I don’t disagree with them that present White House policies have contributed to the problem and the President Biden is either misreading the present situation or has other motives for the policies he’s espousing.
But one of the problems is that the jobs on offer aren’t where the people are and there’s considerable geographical variation in both jobs and the unemployed. The unemployment rate in Los Angeles County is around 12%. In Dallas it’s 6%. Logan, Utah, Huntsville, Alabama, and Lincoln, Nebraska all have unemployment rates around 2%. El Centro, California’s is 16%. It takes more to induce people to move across the country than the availability of an undesirable job.
Another issue is that many of the jobs on offer are, frankly, crappy jobs (in some cases literally). Nursing home workers? Leisure and hospitality? IMO a little deeper thought is called for. Is the approach we are taking to filling those needs the right one? Should we subsidize a return to the way things were or, as Mr. Biden has vowed, should we “build back better”? That will mean that some of the businesses that closed over the last year will remain closed.
Don’t get me wrong. I don’t think that government policy should stand in the way of a return to the way things used to be but I don’t think we should be subsidizing it, either, by ensuring the creation of vast numbers of low wage jobs.
Until we have an industrial policy that IMPOSES re-industrialization on our oligarchs, there will only be crappy jobs for many (most?) people. Note that re-industrialization will not occur if the oligarchs are left to their own devices. They de-industrialized the country for their own profit. The oligarchs must be brought to heel by legal restraints on their economic investments and outright confiscation (a wealth tax), if need be.
Fat chance. The oligarchs are in full control.
Indeed, they’re going in the opposite direction.
While I do not support continuation of enhanced unemployment benefits, many of the claims about the $300 (or $600) supplement are specious, at best. I am supposed to believe that truck drivers and pilots will not work because they are getting an extra $300 in their unemployment check.
A good food & beverage worker can easily make $300 on a weekend night, but when the customers are banned or terrified, it is a little difficult.
I think Tasty has hit on something others don’t, although perhaps not the way he meant. Not all the job shortages are in the very low wage, “crappy” category. Just Friday I had a conversation with the owner of an insurance agency who was lamenting the fact that he could not hire plain office help or underwriters despite paying for certifications and market rates.
Similarly, we have several manufacturing businesses that cannot fill vacancies despite vigorous hiring efforts. There is something more than simply crappy jobs or pay more, and its not good.
My daughter went to a fine school populated with bright kids. However she reports that a significant number have adopted the notion that the government should pay them to do as they like, not as they need to do. Such a stance was unthinkable when I was in high school, college or after graduation. I can’t put my finger on it. But I think its a variant of the everybody gets a trophy mentality foisted upon us by the progressive types.
That’s what bad parenting, and free beer for everyone politics does.