President Joe Biden defended his economic record on Monday as US employment data reveals a pair of puzzling facts: Millions of people remain unemployed after losing their jobs in the pandemic, but companies say ‘they can’t find enough people to hire.
The inability of companies to attract new workers has sparked a polarizing debate over the possible causes, with Republicans and some business figures claiming that overly generous unemployment benefits discourage people from finding jobs.
The main culprit, they say, is the Biden administration’s extension of an unemployment insurance supplement of $ 300 per week. In the highest-paying states, combined benefits can reach up to $ 600 per week, or the equivalent of nearly $ 16 an hour. That’s more than double the federal minimum wage.
The unexpected struggle to find workers threatens to derail what many economists and business owners expected to be a strong economic recovery.
Speaking at the White House, Biden said his economic plan was “working” despite the slowdown in job creation last month, in which businesses hired 266000 new employees, far less than the million expected by economists. He insisted that there was not “much evidence” that the extension of unemployment insurance as part of its Recovery plan discouraged work.
“We need to stay focused on the real issues we face: defeating this pandemic and creating jobs,” he said.
Business people say there is a real labor shortage in industries such as restaurants, transportation and construction.
Convenience store chain franchise owners 7 eleven pleaded with the company not to force them back to 24-hour operations as they couldn’t find anyone to work nights. Managers at a short-staffed McDonald’s in Texas put a sign on its drive-through menu asking for patience because “nobody wants to work anymore,” which made the restaurant famous on TikTok.
Breakfast cereal maker Post Holdings said a labor shortage had caused serious production delays. On Monday, Donnie King, COO of Tyson Foods, America’s largest meat processor, said, “It took us about six days to complete five days of work due to turnover and absenteeism” in its pork factories, which were among the most affected in the first months of the pandemic.
The National Federation of Independent Businesses, a group of small businesses, said 42 percent of small business owners say they cannot fill positions. Among them is Matt Glassman, owner of Greyhound Bar & Grill in Los Angeles.
Two weeks before the reopening, Glassman scheduled 15 interviews to hire kitchen staff. But a dozen candidates did not show up, he said. Of the three who did, one was “completely wrong for the job” and another quit on day one, leaving him with just one employee.
“We did traditional stuff, we did Craigslist, we did [hiring website] Poached, food companies, tried Instagram, tried talking to my staff, tried walking the streets, ”Glassman said. “It did not succeed.”
The increased risks of working in person during the Covid crisis have caused many low-wage workers to reconsider whether their work is worth it, say union activists and economists. For those with children, the persistent closures of some schools and other daycare centers have made returning to work even more difficult.
“The idea that I have to go back to work and potentially put my family in danger and earn a third [the tips] I was making before is just a decision I probably wouldn’t make, if I were my staff, ”Glassman said.
Others say unemployment benefits have discouraged potential hires. From oil fields from the Permian Basin in West Texas, “there are a lot of people hiring and the oil and gas business is picking up and they’re ready to hire,” said Wesley Burnett, economic director of the city chamber of commerce from Odessa. “But the federal program that they’ve put in place has kind of pushed everyone back a bit in that they want to stay home instead of going to work.
Henry McMaster, Republican governor of South Carolina, ordered his state to stop paying additional federal benefits at the end of June, two months before Washington plans to stop funding them.
“What was supposed to be short-term financial assistance for vulnerable and displaced people at the height of the pandemic has turned into a dangerous federal law, making and paying workers to stay at home rather than encouraging them to return.” in the workplace, ”McMaster mentioned.
Liberal groups say there is a simple way to attract more workers: pay more.
“Employers are now saying, ‘well, we can’t find people to do these jobs,’ but what they really should be saying is, ‘we can’t find people to fill these wage jobs. that we are proposing, ”said Melissa Boteach of the Liberal National Women’s Law Center. “And so, you see that when you have a demand for labor, you should increase wages to increase supply.”
Data from the US Department of Labor suggests that some employers have started doing just that. Leisure and hospitality businesses increased wages in April, although incomes are still below their pre-Covid trend.
Others go further. Uber launched its own 250 million dollars of “stimulus” program to attract new pilots. The company said it had 22% fewer drivers than around the same time last year, even as passenger demand increased, leading to higher fares.
Fabio Sandri, general manager of poultry processor Pilgrim’s Pride, told analysts his company spent $ 40 million to raise wages in the first quarter of the year. He also said they continue to invest in automation to less depend on workers.
Many economists expect any labor shortages to go away, predicting that as Covid cases abate, schools reopen and additional unemployment benefits expire in September, hesitant workers will return .
But some may never return to the work they did before the pandemic. Glassman said many of his team fled California.
Additional reporting by Derek Brower