Capitalism has a solution to the labor shortage.
Supply and Demand.
Government stopped people from working. They broke it, so they owned it--they paid people not to work.
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| Job Posting: Harry and David |
That raised the wage floor.
America had a public health crisis. A great many people who wanted to work were told they could not. Both Republicans and Democrats agreed to enhanced unemployment benefits and income supplements. After all, it was the government telling people not to work.
The underlying premise of the American labor market had been that hard working taxpayers should not have to support laziness. Unemployment insurance gave temporary income support of less than what people would earn if working.
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| Medford Parks: Riding Lawn Mower |
COVID rules reversed the practice and moral premise. It was virtuous to stay home. Between state and federal unemployment checks and other direct payments, people in low and moderate paying jobs could get by without working. A critical mass of people dropped out of the labor market.
This took place at a time of heighten consciousness of income disparities, voiced by leftist "progressives" like Sanders, and right-populism from Trump. Ten years ago GOP politicians spoke of the virtue of "trickle down" and the virtue of wealthy job-creating "makers" over "takers." Not anymore.
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| Medford cable operator: will train |
The American economy has been slowly skewing toward owning rather than working. George W. Bush gave it a name--the "ownership society." The idea was that people would succeed financially by owning things--their own small business and their own home--and that workers get an increasing part of their income by owning a bit of the stock market in their retirement accounts. People would be both labor and capital.
Wealth wasn't trickling down because employees did not make enough money to become owners. The benefits of ownership went to the richest Americans. They are the "takers" now. This idea has become commonplace thinking among both Democrats and Republicans.
That resets the labor market and political environment for America as we come out of the COVID era. Employers want to go back to pre-COVID normal, and they cannot. They don't have the workers they need. Traditionally, minimum wage jobs allowed people to survive on a mix of wages and public benefits. Extra unemployment benefits during COVID give some employees another option: Stay home.
America is in the midst of an experiment. Can businesses raise the incomes of lower-paid employees enough to entice people back to work, and if so, will the market adjust to keep those higher wages permanent? As consumers, taxpayers, and voters, Americans may decide we would rather pay higher costs for certain items generally provided by low-wage personnel--elderly care, hospitality, agricultural products, delivery--than pay in taxes for public subsidy of health, food, and housing that allow minimum wage workers to survive.
Americans would not normally do this by intention. Conventional political thinking locks Republicans into opposition to minimum wage laws, thereby protecting the subsidy given their business constituency by essentially topping-up the wages they pay with public benefits. Democratic policy normally points toward government programs to alleviate injury points. Republicans fight these as "giveaways." That is the push and pull of current politics.
COVID benefits push "reset," and allow Americans to experience a new paradigm for helping the working poor. Possibly the solution to the desperation of the working poor is for them to make enough money not to be desperately poor.
Southern Oregon provides a pilot program test. We are a long way from metropolitan areas and are an archetypal low-wage area. We experience our own worker shortage thanks to the local cannabis economy. People who might have looked for jobs at Walmart or fast food employers or agricultural work at or near minimum wage have another option--growing or trimming cannabis. That work pays $15/hour, minimum and often much more, with add-on bonuses "at the back end" when crops were sold. Growers can not use banks, so they pay employees in cash. This raises the wage floor.
The net result was not disaster. Instead, more people have more money to spend. Workers can afford to pay for cars and car insurance, pay off student loans, pay their landlords, buy stuff. Businesses made adjustments in how things are produced and what things cost the consumer. The costs of producing things (including having workers who can eat, sleep, wash, have children, stay healthy, live) transfers to the consumer.
Democrats benefit when people are paid more. The erosion of Blacks and Hispanics votes in 2020 surprised Democrats, but should not have. Apparently many in those groups would rather be treated as "regular Americans" like everyone else, earning their way, than as special beneficiaries of Democratic programs. Republicans will benefit. They think government programs are bribes to voters. Better a paycheck than a food stamp card.
COVID benefits created a temporary labor shortage and thereby a wage floor. Americans are aware that the American economy has been skewed against workers. America has had meaningful wage floors in the past, including during the 1950s period that Trump suggests to be the "Great Again" golden age when America was at its best. Possibly we will experience a wage floor period long enough for people to decide they like it.
I worked for minimum wage in my youth. Darned right I liked a pay raise.