As Biden Pushes Trillions In Stimulus, Employers Struggle To Lure People Back To Work
Who could have possibly seen this coming?
According to Bloomberg, economists are suddenly ‘baffled’ by perhaps the most obvious outcome of a government paying people not to work during the pandemic; there’s a giant shortage of people willing to return to the workforce.
From Chipotle, to MGM, to McDonald’s, companies are now widely reporting that they can’t find – or entice – enough workers to fill open positions now that America has largely emerged from COVID lockdowns. Executives, who are decidedly less ‘baffled’ than the economists, are blaming ‘stimulus checks and generous unemployment benefits’ for hampering their efforts to hire.
And as we noted earlier Thursday, Montana has become the first state to cancel unemployment benefits due to an ‘unprecedented worker shortage.’ This was confirmed by the results of the latest, April, NFIB Small Business survey, which found that a record 42% of companies reported job openings that could not be filled.
The key quote from NFIB Chief Economist Bill Dunkelberg was “Main Street is doing better as state and local restrictions are eased, but finding qualified labour is a critical issue for small businesses nationwide.” And the explicit admission that BIden’s “trillions” in stimulus are behind this predicament:
“Small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force.”
As if it wasn’t clear, the NFIB added that “finding eligible workers to fill open positions will become increasingly difficult for small business owners.”
In Late April, the Wall Street Journal reported that restaurants are even offering signing bonuses.
Full-service and high-end restaurants like Wolfgang Puck’s Spago Beverly Hills, where servers can earn $100,000 a year with tips, also are struggling to recruit workers. Mr. Puck said in an interview that expanded unemployment benefits and new options like personal chef gigs are contributing to staffing shortages at Spago and his other restaurants.
“I don’t think we should pay people to stay home and not work if there are jobs available,” he said.
Illinois-based Portillo’s Hot Dogs LLC boosted hourly wages in markets including Arizona, Michigan and Florida, and is offering $250 hiring bonuses. The chain has hired social-media influencers and built a van called the “beef bus” to help recruit. Still, many of the chain’s 63 restaurants remain understaffed, said Jodi Roeske, Portillo’s vice president of talent.
“We are absolutely struggling to get people to even show up for interviews,” Ms. Roeske said.
We noted this nearly four weeks ago – after BLS data showed that there were over 100 million Americans who are out of the workforce – of which just 6.85 million were looking for a job.
Consider the following striking anecdotes:
Early in the Covid-19 pandemic, Melissa Anderson laid off all three full-time employees of her jewelry-making company, Silver Chest Creations in Burkesville, Ky. She tried to rehire one of them in September and another in January as business recovered, but they refused to come back, she says. “They’re not looking for work.”
Sierra Pacific Industries, which manufactures doors, windows, and millwork, is so desperate to fill openings that it’s offering hiring bonuses of up to $1,500 at its factories in California, Washington, and Wisconsin. In rural Northern California, the Red Bluff Job Training Center is trying to lure young people with extra-large pizzas in the hope that some who stop by can be persuaded to fill out a job application. “We’re trying to get inside their head and help them find employment. Businesses would be so eager to train them,” says Kathy Garcia, the business services and marketing manager. “There are absolutely no job seekers.”
These are not one-off cases: these real-life events, revealed by Bloomberg, expose the striking statistical reality in the US: on April 1 the NFIB (National Federation of Independent Business) reported that in March a record-high percentage of small businesses surveyed said they had jobs they couldn’t fill: 42%, vs. an average since 1974 of 22%.
Even JPMorgan admitted last month that for normalcy to return, people must not only be employed but must want to be employed – and suggested that the “robust” government stimulus may be keeping workers on the sidelines. Bloomberg even admitted that trillions in Biden stimulus are now incentivizing potential workers not to seek gainful employment, and instead sit back and collect the next stimmy check for doing absolutely nothing in what is becoming the world’s greatest “under the radar” experiment in Universal Basic Income.
Yet, now Bloomberg reports that ‘economists’ (perhaps proponents of ongoing stimulus) are apparently “unclear about what’s really causing this gap and how long it will last.”
“There is definitely a job paradox that’s going on,” according to Bank of America senior US economist, Joe Song, who says that while it’s difficult to quantify, “but it’s clearly a challenge that’s weighing on a quicker pace of recovery.”
While the unemployment rate probably fell to 5.8% last month, according the median estimate in a Bloomberg survey of economists, the labor force participation rate remains well below pre-pandemic levels. Further, the employment to population ratio — which measures the share of the population that is employed — is still more than three percentage points below where it was before Covid-19.
Lingering health concerns, ongoing child care responsibilities and the inability to do some jobs from home are just some of the reasons why Americans are reluctant to return to work. Some are also retiring early.
And anyone who previously made less than $32,000 per year is better off financially in the near term receiving unemployment benefits, according to economists at Bank of America. -Bloomberg
Now, the argument has begun to shift to ‘fair wages’ – with the Economic Policy Institute’s Heidi Shierholz, former Labor Department chief economist under Obama, saying: “Employers are like: ‘Why the hell, if there are so many people who need jobs, can’t I find somebody really awesome, really cheap?“
Of course, as massive stimulus ‘coincides’ with massive inflation across several categories, the definition of ‘really cheap’ is now relative when a gallon of milk jumps over 11% in a year, as one of many examples.
“If we’re having that kind of job shortage at a time when the economy is still in front of what almost everybody thinks is going to be a very substantial boom over the next six months, I am concerned about inflation and inflation expectations,” former Treasury Secretary Larry Summers, a good friend of Jeffrey Epstein, told Bloomberg TV in an interview.
According to policy makers, including Fed Chair Jerome Powell, the ‘mismatch’ (massive job shortage) is only temporary – and workers will ‘likely’ return to the labor force after their extended jobless aid programs are over.
Which begs the question – if employers are already having trouble attracting workers back into the labor force, why do we need a $1.8 trillion ‘human infrastructure’ plan?
Fri, 05/07/2021 – 09:34