Joe Manchin said it best: “We have 11 million jobs that we haven’t filled, 8 million people still unemployed. Something’s not matching up here.” The West Virginia …
Joe Manchin said it best: “We have 11 million jobs that we haven’t filled, 8 million people still unemployed. Something’s not matching up here.” The West Virginia senator’s instincts are right. Something in the labor market fundamentally changed during the pandemic. Fewer people seem willing to work.
The National Federation of Independent Business has been conducting a monthly survey of small business owners since 1974. The August results were disconcerting. A 48-year record high — 50% — reported job openings that could not be filled. Of those owners hiring or trying to hire, 91% reported there were few or no “qualified” applicants. A record high 29% reporting no – zero – qualified applicants. All this despite a record high 41% reporting that they had increased compensation. As a result, another record high — 28% — identified labor quality as their top business problem.
So, what’s causing these historically bad results?
Conservatives believe the $300 weekly federal unemployment insurance bonus that expired in September suppressed the labor market.
Attempting to explain the dismal August jobs numbers, President Biden blamed the delta variant. But 77% of Americans over 18 have had at least one vaccine shot and 68% have had both. About 700,000 additional doses are being administered every day. Add in unvaccinated individuals with natural immunity and one analysis recently found that roughly 80% of the country already has vaccinated or natural immunity.
Bottom line, neither the virus nor the weekly unemployment bonus fully explain the extent of the current labor shortage. To determine if there were other explanations for the slow return to work, I spoke with 10 business owners in the retail sector that I’ve known for years.
While some mentioned COVID and the federal unemployment bonus as concerns, to a person their primary concern was that people seem to have lost the desire to work following more than a year of government support.
The business owners were all willing to increase pay to get good employees but believe they are competing with work-free government largesse – and losing.
While Americans had $400 billion more in savings in July than when the pandemic began, the Biden administration has increased food stamp benefits by 25% and Democrats now want to make the current $3,600 per year tax credit for children under 6 – and $3,000 for older children – permanent rather than letting it expire next July.
The child tax credit is a good example of the growing government support mentality businesses are up against. The very successful 1996 bipartisan welfare reform effort required that a substantial percentage of those receiving welfare work, if they were able bodied. Those reforms were good for employees as well as employers looking to hire. They helped struggling parents find jobs, become financially independent and lift their families out of poverty. The labor market grew.
The child tax credit ignores that success. Expressing concern with the structure – not the substance – of making this program permanent, Sen. Manchin complained that “[t]here’s no work requirements whatsoever. There’s no education requirements whatsoever for better skill sets. Don’t you think, if we’re going to help the children, that the [parents] should make some effort?”
Manchin got that right as well. But, apparently, encouraging work is not his party’s goal.
We all want to lift children out of poverty. We also want – and employers want to provide – good jobs and fulfilling careers. But people struggling financially will never find those jobs if the government seduces them into living off what other people produce rather than realizing their potential, accomplishing financial independence and experiencing the dignity and self-respect that come with a job.
Government dependence is neither the way out of poverty nor the path back to 2019’s thriving pre-pandemic labor market.
Andy Puzder, a former restaurant executive, is a senior fellow at Pepperdine University’s School of Public Policy. A longer version of this article appeared in Real Real Politics.