Are Worker Shortages a Knock-on Effect of the Pandemic?
Another frequent topic in this blog is shortages. There have been continuing problems with supply chains, particularly those supplying microchips needed to build everything from cars to appliances. There have been more bizarre and temporary shortages of things like ketchup packets and garden gnomes.
Now the big issue is worker shortages. The Wall Street Journal calls it the worst ever (possible paywall) such shortage.
Conservative governors are blaming the enhanced unemployment benefits passed as part of pandemic relief. Half of states are cancelling the extra $300 per month, which leaders they think are keeping people form returning to work.
But a study by the Fed says concludes that the payments are not a major driver of the worker shortage. The authors found that few people turned down offers of work because of them, and they at best have a "small but noticeable effect."
Conservatives—who were once upon a time believers in capitalism and free markets—should realize that there is a straightforward way to labor supply shortages: Raise wages.
Maybe people not returning to work aren't all lazy freeloaders. Maybe they've had a year to reflect on their options and are unwilling to go back to working dead-end jobs for a minimum wage that was set twelve years ago.
Whatever is causing the shortage, another shoe is about to drop according to management professor Anthony Klotz. He predicts that employers will experience a wave of resignations.
Why? He notes that there were six million fewer resignations in 2020 than in 2019. He attributes to people "sheltering in place" during the pandemic and putting plans to leave jobs on hold. As things cool down, he expects people to enact those plans.
Image by www_slon_pics from Pixabay
