What is behind the lack of workers in the United States | Economy

When the flow of customers increased at the family restaurant Pineapple Grill in Texas (USA), Pomai Uyehara found himself in trouble: he couldn’t hire enough workers. That’s when he came up with the idea of ​​offering a $300 bonus to the chef job and a $150 bonus to waiters, in addition to other monetary incentives based on job performance.

These same types of incentives to attract employees are everywhere. In addition to raising salaries, companies are offering to pay for studies, health plans, more flexible hours, bonuses and even money just to attend an interview.

  • USA has more than 9 million unemployed – despite rising salaries and vacancies to spare
  • US has 10.073 million open jobs at the end of June

As the economic recovery progresses, companies need more workers. So much so that job openings in June reached a record 10.1 million, according to data from the US Department of Labor.

Those most urgently seeking workers are restaurants, hotels, food chains, supermarkets, retail stores and the entertainment industry.

The Pollo Tropical restaurant chain in Miami offers a $500 bonus to anyone who wants to work with them — Photo: Cecilia Barría/BBC Mundo

At 21, Addison Bueide says she won’t go back to work as a waitress at a private club in Austin.

“The pandemic was really tough, especially as my bosses didn’t take wearing masks very seriously and let people in without them.”

Like her, there are many other people whose trade forces them to work indoors or in permanent contact with clients, leaving them more exposed to possible contagion. And as the Delta variant of the coronavirus has now caused a resurgence of cases in the country, the job market is moving into very unpredictable terrain.

“All my employees work 6 or 7 days a week because we’re understaffed,” Carlos Gazitua, president of Sergio’s restaurant chain in Florida, told BBC Mundo, the BBC’s Spanish-language service.

He now pays employees who wash dishes $19 an hour, whereas prior to the pandemic, dishwashing employees generally earned no more than $12. The phenomenon keeps authorities on their radar.

“We are now lagging behind our peers in workforce participation, which is not where we want to be as a country,” US Central Bank President Jerome Powell told a mid-July Senate hearing. . “We need to work as a society to ensure that people find their way back into the workforce.”

At the center of the debate about the reasons that explain the phenomenon are two main views. There are those who believe that people do not want to work because they prefer to live on the social benefits that the government offers to the unemployed as a result of the pandemic (US$300 a week). And there are those who argue that the issue is much more complex.

Advancement of vaccination in the USA leads to the reopening of job vacancies

Advancement of vaccination in the USA leads to the reopening of job vacancies

Although most job openings are those that traditionally pay the lowest wages, the shortage of workers has certainly permeated broader sectors of society. Precisely because it is not a homogeneous mass of people, the reasons for understanding this phenomenon are as different as the people who experience it.

Below, see some of the causes of the sharp shortage of employees in the United States, according to experts consulted by BBC Mundo.

1. Wages and working conditions

With so many vacancies available, workers are sure that this is the time to get a better salary for the same type of work they did before.

While there is no federal law that sets a minimum wage of $15 an hour, more and more companies are approaching that limit due to a lack of labor. But money isn’t everything.

“The shortage of labor is mainly due to the fact that workers do not want to return to work places where they do not respect them, do not give them security, do not give them benefits and pay them low wages,” said Victor Narro, a professor at the Center of Labor Studies at the University of California at Los Angeles (UCLA).

“This has more to do with a lack of good jobs than a lack of workers.”

2. Unemployed Benefits

Many entrepreneurs say they cannot fill their vacancies because the $300 an unemployed person receives a week as a government benefit to fight the pandemic encourages them to live on welfare instead of working.

So some Republican states began to stop benefit payments to encourage a return to work. As this is a recent measure, there is still no data to assess the effects of this policy in recent weeks.

However, a study by San Francisco Central Bank economists Nicolas Petrosky-Nadeau and Robert G. Valletta indicates that the help provided since last year has had minimal deterrent effect on job search – except in higher paying positions. low ($11.12 per hour), such as food services.

In addition to the political debate generated by the issue of social assistance, most economists agree that this is one of the factors at play.

“It can’t be ignored that the benefits contributed, although it’s also true that the perception of risk about the pandemic or the childcare situation plays a role,” says Timothy Bond, professor in the Department of Economics at Purdue University.

The lack of an adequate network of day care centers is one of the reasons mentioned by all specialists to explain the situation of lack of workers.

“The need to take physical distance completely disrupted routines and structures, closing schools and day care centers. This limited day care options,” said Kent Mahoney, executive vice president of analyst and consulting firm Proxima.

Many women left the labor market and were not reinstated. In June, their participation in the workforce reached 56.2%, well below the 60% they had in the last two decades.

Unlike other countries in the developed world, the United States does not have a childcare system with extensive tax subsidies. It is expected that when the school year starts, in late August or early September, more women will return to jobs, as long as the Delta variant does not change much of the current health situation.

Concern about new infections in sectors where employees are most exposed, such as restaurants, hotels and other services related to tourism and entertainment, makes many not want to return to their old jobs.

Things have gotten even more complicated now that the Delta variant is expanding across the country and there have been more infections in children than in previous months. Many employees who feel they did not receive the necessary protective measures during the first waves of the pandemic do not want to return to their old jobs.

At the same time, if the salary and working conditions are not attractive enough, there are unemployed people who would rather lose their income than become infected.

5. Desire for greater work flexibility

Professionals whose physical presence is not essential for the type of work they perform express the desire for greater flexibility at work. While many of the big companies had planned to return to the office work system, things haven’t been so easy.

The pandemic showed many employees in some sectors that they could do their homework and, when they return, some prefer to look for another job that gives them greater flexibility. In other words, a company that allows telecommuting or the hybrid work system, where employees must come to the office only a few days a week.

The gigantic changes that society underwent with the pandemic also generated other transformations.

Some, because they spend more time at home, have shifted their priorities and are looking for jobs that allow them to spend more time with their family, said Anthony Klotz, associate professor of management at Texas A&M University’s Mays School of Business. And others decided to venture out to change areas or start a business.

6. Retirement boom

The working-age population declined in 2019 for the first time in decades, then fell again last year. Retirements for so-called baby boomers (born after World War II) doubled in 2020 from the previous year, according to an analysis by the Pew Research Center.

Some decided to retire earlier than planned because they had lost their job and saw little prospect of getting a new one. Or because they didn’t want to be exposed to the virus in high-risk working conditions. And a smaller segment decided to retire earlier than planned, taking advantage of the good performance of stock market investments or the sale of their homes.

The problem with early retirement of the workforce is that the economy loses highly experienced skilled workers, something that is difficult to fill quickly. However, for some economists, this is not such a crucial factor.

“Retirement can reinforce the feeling of scarcity, although automation relieves it,” said Harry Holzer, professor of public policy at Georgetown University.

There are so many elements at play to unravel the mystery of labor shortages that Holzer warns that the necessary evidence does not yet exist to know which of all the causes carries the most weight or how long this situation could last.

Added to these points are other causes that can help explain the phenomenon, such as the lack of skills needed for certain types of jobs, the frustration and exhaustion of those who experienced an excessive workload during the pandemic and a 30% increase in overdose deaths in 2020 amid the US opioid crisis.

Economic problems, isolation and difficulty in accessing health services contributed to the worsening of this situation – and some studies indicate that the higher the levels of dependence, the shorter the permanence of young people in the labor market.

What does history tell us?

From a historical point of view, Guido Menzio, a professor at the Department of Economics at New York University, argues that this is not the first time that a situation with these characteristics has occurred.

“It’s not just a phenomenon of the current (economic) recovery, but of more recent recoveries,” he tells BBC Mundo, such as those after the 1991 recession or the 2008-2009 recession.

According to his research, a constant cause of job shortages after a recession is that there is a group of workers (about 15% of the workforce) who are disproportionately affected by the economic situation.

For this group, explains Menzio, “the job reintegration process is slow and full of setbacks”. For now, the future of the job market remains on shaky ground.

“The highly contagious Delta variant casts a shadow over the labor market recovery in the coming months, threatening to delay the return of workers who are still paralyzed ​​because of child care or health problems,” said Kathy Bostjancic, economist. head of Oxford Economics in the United States.