Economic researchers doubting worker shortage blame low wages

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FILE—In this file photo from May 5, 2021, a truck passes a sign showing a need to hire laborers outside a concrete products company in Evans City, Pa. Pennsylvania will resume work search requirements in July for hundreds of thousands of people receiving unemployment compensation, a top Wolf administration official said Monday, May 24, 2021. (AP Photo/Keith Srakocic, File)

ALBANY, N.Y. (NEWS10) — Some employers have speculated that they can’t find workers—despite an apparent economic recovery following the COVID pandemic—because of a worker shortage. But some economists say it’s likelier that those employers are refusing to pay enough in wages to meet demand.

According to reports, the issue is not a labor shortage, but a labor market that’s not built to raise people out of poverty or motivate workers to get back on the payroll.

There is no evidence to support the theory of widespread labor shortages, said Heidi Shierholz, Senior Economist and Director of Policy at the Economic Policy Institute. Shierholz also served as chief economist at the Department of Labor from 2014 to 2017 under President Barack Obama. She says that, because of its complexity, the U.S. labor market will always have pockets of actual labor shortages. But she says it’s more likely that employers simply don’t want to pay the wages that employees are looking for:

“Employers post their too-low wages, can’t find workers to fill jobs at that pay level, and claim they’re facing a labor shortage. Given the ubiquity of this dynamic, I often suggest that whenever anyone says, ‘I can’t find the workers I need,’ she should really add, ‘at the wages I want to pay.'”

Heidi Shierholz

Shierholz also says that shortages in the restaurant industry are not likely to spread into other sectors, at least not in the same way. “I actually have PTSD from my time working in restaurants due to the harassment and abuse I endured at most restaurants,” one Albany restaurant worker told NEWS10. “At this point, it’s not only unsafe for those reasons but also because of COVID.”

Many have blamed extended and increased unemployment benefits from the federal government and New York state for American workers refusing to rejoin the workforce now that COVID infection rates are at manageable levels. On the contrary, according to the think tank Talkpoverty.org, these increased unemployment benefits have empowered workers.

Dedicated to tackling the issue of poverty in the U.S., Talkpoverty.org said employers are concerned there isn’t a shortage of workers but a shift in the power dynamic that would give workers more advantage to push for higher wages, paid time off, and benefits. These are issues that employees place the most value on, according to Business.org.

For years, employers had access to a labor force where workers were so desperate that they’d take any job offer. The combination of poverty-level minimum wages, historically low unionization rates, at-will employment, worker misclassification, a battered safety net, a lack of paid time off or employer-sponsored benefits, and a host of other policies and practices have firmly tilted the scales toward employers, allowing for pervasive exploitation and abuse, particularly for the nearly three in four Americans living paycheck to paycheck even before the pandemic.

Talkpoverty.org

Receiving increased unemployment benefits allows low-income workers, for maybe the first time in their lives, to be selective while job hunting, opting out of positions that increase their risk for catching COVID or that won’t pay them enough to afford basic necessities, according to Talkpoverty.org.

“Studies of unemployment insurance have shown that laid-off workers who receive benefits search harder for jobs, receive better-paying offers, and take roles that better match their education level. Specifically, during the pandemic, several studies have looked at the $600 enhanced benefits and found that they had little to no effect on employment or job search,” the organization said.

“With all the uncertainty concerning the PUA extension I ended up switching careers in December. I got very lucky with a reference and ended up in a new industry which happens to pay me $2+ more an hour for a freaking starting wage than my 10 years of seniority got me working in food service,” one local resident told NEWS10.

“I worked way harder and took more abuse from my restaurant/retail jobs than I ever did in college, grad school, or any of my white collar office jobs,” another local said.

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