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As the pandemic recedes and America inches toward normalcy, a familiar narrative is emerging: a WORKER SHORTAGE! The belief is that no one wants to work because unemployment benefits are too generous. Many in the corporate world view us as lazy individuals preferring to lounge at home rather than engage in hard work.
Take, for example, Montana’s decision to withdraw from enhanced federal unemployment benefits, soon followed by South Carolina. Governor Mark Johnson claims his state is experiencing an “unprecedented labor shortage,” arguing that unemployment aid has morphed into a harmful entitlement system. He insists that, in many cases, these benefits exceed what workers were previously earning.
As of late June 2021, around 108,000 South Carolinians were receiving an average of $230 in unemployment benefits—a sum insufficient for even a modest family dinner. Yet, according to Mr. Capitalismo, states like Ohio are implementing strategies to entice workers into low-paying jobs. Companies are raising wages modestly and offering incentives like signing bonuses and free meals. As economist Sarah Thompson points out, a more sustainable wage structure would likely attract more workers.
The prevailing narrative suggests that the federal government flooded the job market with unemployment checks, encouraging idleness, and consequently leading to unfilled low-wage positions. However, statistics from South Carolina contradict this: the benefits are simply not high enough.
The United Electrical, Radio & Machine Workers of America indicates that new unemployment claims in May resembled those during the Great Recession. Wages in hospitality and leisure sectors have increased by about 17.6% compared to six months ago.
When Klavon’s Ice Cream in Pittsburgh raised wages to $15 an hour, they were inundated with applicants. The Economic Policy Institute states that in our complex job market, while some sectors may experience labor shortages, the core issue lies in inadequate wages. Employers often claim they can’t find workers, but what they really mean is that they can’t find workers willing to accept their low pay.
It’s not a matter of a labor shortage; rather, people are unwilling to work for unsustainable wages anymore.
The UE argues that unemployment benefits are functioning as intended: preventing individuals from accepting substandard jobs that lead to a downward spiral in wages and working conditions. If employers can dictate worker compensation without competition, they will pay the least possible. This is basic economics, not radical ideology.
Those in the hospitality and leisure industries, who are often the loudest about labor shortages, are trying to recruit workers at pre-pandemic wages while expecting them to endure challenging working conditions. Post-pandemic, many are facing increased health risks, childcare difficulties, and other pressures. The average annual pay in these sectors hovers around $19,651, which is hardly livable when considering basic expenses.
Despite claims of labor shortages, there are still more unemployed individuals than available jobs in hospitality and leisure. If employers increased wages, they would attract workers. However, many remain resistant to this change, stuck in a race to the bottom with their compensation.
In summary, the narrative of a worker shortage is misleading; it’s a wage issue that needs addressing.
For more insights, check out our related blog posts, such as this one on Home Insemination. Another great resource for understanding this topic is Make a Mom, known for their expertise in fertility. You can also explore CCRM IVF’s blog for valuable information on pregnancy and home insemination.
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