The labor shortage is nationwide issue
The employee shortage is not just an Iowa phenomenon.
Kathy and I recently took a trip out of state, driving through towns both large and small. For the past few years, the most common signs we encountered when driving were political in nature.
At stores big and little, at manufacturing plants, and on billboards we now were met continually with “Now Hiring,” “Help Wanted,” “Will Train,” and “Hiring Bonus” signs. Also “Tenemos Trabajo” – that’s “We Have Work” in Spanish.
Several businesses, especially restaurants and smaller retail stores, had shortened their hours because they didn’t have enough help to cover the times they wanted to be open.
Analysts cite several reasons why businesses are having trouble securing enough help. For one, COVID-19 still stalks the land, and the Delta variant is much more contagious than the original variety. Some people are skittish about working around people who may or may not be vaccinated.
For another reason, many of the available jobs don’t pay enough to let parents afford child care. Even at a wage of $15 per hour (about $30,000 a year full-time), parents who have several kids can’t make the math work for them if they have to pay for dependable child care, especially in larger cities.
For yet another reason, the available jobs don’t match up with the skills of many unemployed residents. Even before the pandemic a number of specialized firms were having trouble filling their vacant positions that require detailed training; the pandemic exacerbated that problem. On-the-job training simply isn’t sufficient for a growing number of jobs in today’s economy.
A widely held theory contends that the government’s added unemployment benefits have made it less imperative for potential employees to look for work. For a limited number of people, that idea may hold some truth. But statistics show that states which ended those benefits before their allotted duration registered no hiring spike. Apparently, shutting off the government spigot was not the key to filling job vacancies.
Classic economic theories of capitalism maintain that people always seek more income. Under that hypothesis, individuals constantly vie to maximize their wealth, and therefore unemployment is only a temporary condition.
But current conditions appear instead to bear out the theories of American economist and sociologist Thorstein Veblen. His 1899 book “The Theory of the Leisure Class” claimed that the more money people get, the less importance they attach to getting the next dollar. He called that tendency “the marginal propensity to consume:” money becomes less important as a driver of economic activity the more of it that an individual possesses.
It may just be that many people are less interested in finding more work if their basic needs are met by a reasonably comfortable income minimum. That level is different for different people, of course, but the basic theory may hold enough truth that it affects widespread employment levels.
In short, many people may place a higher value on goals other than a higher salary.
There’s not an easy solution for where that leaves American employers.
A number of progressive companies in today’s economy have succeeded in filling their jobs by providing non-traditional benefits: work from home opportunities, on-site paid child care, generous personal time off, leisure time opportunities at the work site, paid tuition for more education, flexible hours, travel opportunities, paid family leave, personal computer gifts, handsome sign-on bonuses, all-encompassing health benefits including dental, vision and hearing.
The problem for smaller businesses and those that operate at a small profit margin, of course, is that they can’t afford to offer such benefits to their employees and still stay in business.
But the employers that figure out what their employees actually want, in addition to a living wage, are the businesses that are likely to succeed in today’s America.