The Country’s Worker Shortage is Actually a Wage Issue
For over a year, politicians, business leaders, and billionaires have asserted that there’s a worker shortage in the U.S. (Business Insider). They insist that the lack of available workers directly results from people being “flush for the moment” off of stimulus savings and because “no one wants to work.” And to some degree, the latter is understandable. Why would anyone want to work during daily mass shootings and incidents of police violence, the displacement of thousands due to the climate crisis, the stripping of rights, and the mishandling of a mass disabling event, among other things? The reality, however, is that people have to and are still working. They just don’t want to work for unlivable wages. Attempts to deflect accountability for the current condition of the labor market and economy onto workers ignore how the U.S. continually fails to address the country’s liveable wage shortage and lack of a social safety net.
The country saw massive layoffs and terminations in early 2020 and an exodus of workers quitting their jobs in late 2020. The “Great Resignation” or, more appropriately, the “Great Reshuffle” refers to the ongoing trend of employees leaving their jobs for positions with better work conditions, job flexibility, benefits, and/or higher wages (The Street). More than 47 million people left their jobs in 2021, with low-wage service jobs seeing the highest turnover (CNBC). Despite the high employee resignation rate in the past year, hiring is outpacing resignation by 4.3% to 2.8% (U.S. Chamber of Commerce). And the unemployment rate is almost on par with pre-pandemic numbers (Bureau of Labor Statistics, BLS).
However, the labor force participation rate has not recovered. Even if every unemployed person of working age found a job, there would still be over five million open positions. This “worker deficit” is what lawmakers are referring to when they cite a worker shortage.
The labor force participation rate (LFPR) is the percentage of working-age people employed or seeking work. It is considered the active workforce. At the start of the pandemic, as businesses closed, schools moved remote, and individuals went into isolation, the LFPR fell. Unlike the unemployment rate, as the country relaxed its COVID-19 restrictions, the LFPR failed to recover fully (BLS). Forced retirements and health concerns that prevent retirees from re-entering the workforce, drops in migration and employment-based visas due to anti-immigration laws, and a lack of affordable childcare have attributed to people being prevented from rejoining the workforce (Brookings, U.S. Chamber of Commerce, U.S. Chamber of Commerce).
Due to pandemic challenges, including 214,000 U.S. children losing a parent or caregiver due to COVID-19, 58% of working parents reported leaving work because they couldn’t find childcare options. Caregiving prevented 32% of women from returning to work.
These aren’t the only obstacles keeping people from returning to work. Shifting views on work and values left many disenchanted with a labor force that preserved hostile work environments for meager wages (One Fair Wage). For example, military recruitment and the food services retention rate have taken a hit due to high-stress environments not matching wages (ABC News, U.S. Chamber of Commerce).
Discourse about worker apathy and the labor shortage often overlooks how the federal minimum wage has not changed in 13 years, going from $6.55 to $7.25 in July 2009 (American Progress). The problem, of course, is that productivity has grown 3.5 times more than the average worker’s pay (Economic Policy Institute). And if wages had kept pace with productivity as before, the minimum wage would be $23 (Center for Economic and Policy Research).
Though 30 states and D.C. have raised their state minimum wages since 2014, the highest is only $16.10 (EPI). And based on the current federal minimum wage, there is no state where a full-time hourly wage worker could afford a two-bedroom apartment (National Low Income Housing Coalition). In Florida, a person would have to work 86 hours per week at the state’s $10.00 minimum wage to afford a one-bedroom.
Workers part of the “Great Reshuffle” who got pay increases aren’t thriving off their higher wages, with inflation cutting the average worker’s pay by 2.4% (CNBC). 75% of households in the $30,000-to-$100,000 income range said their earnings fell behind the cost of living (Primerica). Food prices rose 10.8% between April 2021 and April 2022, the largest rise since 1980 (U.S. Bureau of Labor Statistics).
And while the stimulus checks, which totaled about $803 billion across 472 million payments sent to counter financial constraints from the pandemic, helped rebound millions experiencing poverty or hardship, they were temporary relief to looming inflation (CNBC). Contrary to the belief that the stimulus checks were exploited, funds were mainly used to buy food and household essentials and pay utilities, rent, and debt. They were a necessary lifeline for more than 20 million unemployed people, the highest in the post-World War II era (Pew Research).
Stories of pilots, railroad workers, baristas, warehouse workers, and more who fight for better work conditions and a liveable wage don’t exist in a society where no one wants to work. They do, however, reside in ones where civilians in dire straits are continuously failed by out-of-touch lawmakers.
• There’s no worker shortage but a liveable wage shortage that keeps workers from entering certain labor jobs.
• The absence of social safety net programs like affordable childcare bars people from rejoining the workforce.
• Unionizing efforts and strikes are not characteristics of a workforce uninterested in employment.