The Labor Shortage Crisis

Jasnoor Sehra, Reporter

Covid-19 has been detrimental to the economy and, though fall was supposed to be the recovery from the turmoil, employment is still 5 million [jobs] below February 2020s level, according to ING economists. There are 10 million job vacancies and, due to this fact, employers are raising wages. But that is not the only reason holding them back.


There are many differing opinions on why the worker shortage is going on, and some theories are in fact built on the current wages. 66% of people employed by large corporations are paid minimum wage, and a $15 minimum wage is not enough money for a family to make a living. As a result, it does not come as a big surprise that businesses that are giving a higher wage aren’t struggling as those who don’t. Consequently, employers are scrambling to raise wages to keep their employees, creating a larger money pool. These growing pools are meant to lure staff in to stay and work for businesses. 


However, there are claims that this labor shortage is not due to the fact of worker demand but the supply of workers. Rather, many of them have to do with Covid 19. The Great Resignation is going around the U.S right now, an economic trend in which employees quit from their jobs, also known as the “Big Quit.” This stems from the pandemic, people having “awakenings”, and finding their true passions during their time off. The INSIDER calls these individuals, “epiphany quitters”. 


It is not forgotten by employees that there is still a pandemic occurring, even though it is not that widely acknowledged anymore.. S&P global economists said in a note that “1.4 million workers may not return until “pandemic-related issues are resolved.” In November, 1.2 million people didn’t look for work due to the ongoing pandemic, and with the new Omicron variant it can be expected that the worker shortage will continue to decline in this aspect. 


On the political side, the Biden administration experienced a major setback from this situation as they were expecting employment to increase. Conservatives are blaming the unemployment benefits that were offered to keep people safe and at home, such as the $400 weekly boost and food aid. The New York Times states that, “many lower-income Americans, too, were able to set aside money thanks to the government’s multi trillion-dollar response to the pandemic.” 


However, Americans don’t have to go back to work because of all the money they have saved through the pandemic, the convenience of working at home, and the rising interest in investing in stocks. This is evident in the 4.3 million people who quit their jobs in August. These extra savings are a nice safety net for people to rely on, giving them the opportunity to be selective and picky about the jobs they choose.


In the end, it seems America is divided between employers and employees, the latter are using this chance to demand flexible hours, better working conditions, and benefits. Betsey Stevenson, a University of Michigan economist and a former adviser to President Barack Obama, said “It’s like the whole country is in some kind of union renegotiation,”….“I don’t know who’s going to win in this bargaining that’s going on right now, but right now it seems like workers have the upper hand.” That seems to be everyone’s question at the moment and only time will tell.