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When a public problem is misrepresented, the proposed solutions often become irrelevant or inhumane.

Current example: America’s so-called “labor shortage.”

Federal Reserve Chairman Jerome Powell says the United States has a “structural labor shortage” that is unlikely to be resolved soon.

The US Chamber of Commerce claims that there are more than 10 million jobs in the US for which employers cannot find workers.

Here is the truth. there is no labor shortage.

However, there is a shortage of jobs that pay enough to attract workers to fill the jobs.

Real (inflation-adjusted) wages continue to decline for most Americans. Wages have risen less than prices.

Those increases include the cost of food, energy, rent, child care, elder care, and transportation (cars, gas, and public transportation), all big expenses for working people.

Meanwhile, the federal minimum wage continues to plummet. It has not been raised in 13 years, the longest period without a raise in its history. Adjusted for inflation, its real value is the lowest it has been in 66 years.

You don’t have to be a financial wizard to see why some employees might do this.

Economists offered similar warnings of a “labor shortage” after the financial crisis and recession of 2008-09. But as the economy strengthened and wages rose, the so-called “job shortage” magically disappeared.

So what should employers do about the difficulty of finding workers?

Simple. If employers want more workers, they have to pay them more.

Jerome Powell and his Fed counterpart don’t want to hear it. They aim to deal with “labor shortages” by slowing the economy enough that employers can find all the workers they need without raising wages.

Even if inflation is slowing, central bankers still think they need to slow the labor market and reduce wage growth. “The greatest value, in fact, in [the service] the field is labor,” Powell said at his last press conference in December. “And we’re seeing a very, very strong labor market … where wages are very high.”

But the economic slowdown will prevent millions of people from receiving wage increases and cause millions of people to lose their jobs—disproportionately low-wage workers, women, and people of color.

Meanwhile, Republicans and some corporate economists blame the “labor shortage” on overly generous unemployment benefits. The way to get more people into work, they say, is to make their lives outside the workplace less tolerable.

A recent “study” by Casey Mulligan and EJ Antony claims that “it’s worth not working in Biden’s America” ​​because unemployment and Affordable Care Act benefits are so generous that “many businesses can’t bring workers back to work for nearly three years. after Covid-19 hit these shores.”

Baloni. Besides the unemployed rich and their heirs, most of the unemployed are in dire straits.

Pandemic benefits have ended, and America’s social safety nets have collapsed, just as they were at the start of the pandemic. Before the pandemic, fewer than 30% of unemployed Americans qualified for unemployment benefits that last no longer than six months, the least generous of any rich nation. Since then we have done nothing to fix this broken system.

Affordable Care Act subsidies, meanwhile, allow low-income people to afford health insurance. Without these subsidies, many would not receive the medical care they need and would be more likely to become seriously ill and therefore unable to work.

Taken to its logical extreme, the corporate Republican argument may be correct. Remove all safety nets and at some point the people out of work will suffer so much that they will have to take any available job, at any wage, whatever the job demands.

But do that, and we’ll end up with an economy that’s even more brutal than today’s.

The reason people don’t work is because work doesn’t pay them enough, given the fall in real wages and the rise in their dependency costs.

Both the Fed’s solution to slow the economy so employers can find the workers they need without raising wages and the Republican corporate solution to cut safety nets so people are desperate enough to get any job are cruel. They would place a huge burden on many of the most vulnerable people in our society.

If we want more people to work and we want to live in a decent society, the answer is to pay people more.


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