About That Shortage Of Workers…

Bars and restaurants are reopening–something for which we are all grateful–but according to media reports, having trouble finding workers. Republicans are jumping on those reports, arguing that employers just can’t compete with unemployment insurance checks. It’s the standard GOP argument that helping people breeds “dependence,” — that workers would rather collect benefits than go back to work.

A 2020 study by Yale economists found that–convenient as that argument may be–it’s wrong. Unemployment benefits don’t create a disincentive for job seekers.

Recent reports suggest that the pandemic has cost America’s economy 2.5 million restaurant jobs and closed more than 100,000 eateries. Now, just as the nation begins to return to whatever “normal” looks like, the restaurants that made it through 2020 can’t find staffers.

A recent Brookings report  looked at Census survey data from early April. It found that 37% of small businesses in the hospitality and food sectors were affected by worker availability, compared to 16% for all small businesses.

So–if those Yale researchers are right, and the dearth of restaurant workers isn’t attributable to sloth enabled by unemployment compensation–what is causing the problem?

One likely factor is the unusual timing. When everyone is trying to hire at the same time, it is harder to find workers. Add to that the fact that easing of the pandemic does not equate to defeat of the pandemic. Many workers–especially those who will face the public as servers, hosts and the like–remain fearful, and not without reason.

But a substantial and overlooked reason for the problem is Trump’s immigration policy. 

Restaurants (and for that matter, farmers) have long been dependent upon immigrant labor, and Trump’s policies (if hatred of Black and brown people can be dignified by the label “policy”) sharply curtailed the supply of those workers. Of course, pointing out that consequence is incompatible with Republican’s anti-immigration orthodoxy.

An ugly truth further complicating the situation is the fact that food establishments don’t depend exclusively on legal immigrants. A study from last year pointed out the significant extent to which restaurants rely on undocumented workers–and how they exploit those workers’ fears of deportation to underpay them.

Undocumented immigrants as a whole pay billions in taxes and a higher effective tax rate average than the top 1 percent of taxpayers (8 percent versus 5.4 percent).

And, as they often work in the back of house — as line cooks, bussers, dishwashers, and janitors — they’re largely invisible to the dining public. In reality, they’re the backbone of the industry. And yet, many are unable to obtain health insurance even though they perform backbreaking work day after day. Most didn’t receive a $1,200 stimulus check from the government, and they often fear getting tested for COVID-19 or obtaining care for fear of deportation.

The next time a GOP flack attributes the scarcity of workers to “dependency” caused by government largesse (a dependency that somehow doesn’t affect the wealthy and corporate beneficiaries of sizable subsidies), you might connect the dots for him.

You might also ask GOP opponents of immigration if they are willing to pay higher prices for fruits and vegetables, and more for that hamburger, if farmers and restaurant owners have to pay something close to a living wage to attract workers in a tighter (and Whiter) labor market. (For the record, I would be willing to pay more if I could rely on the assumption that the people picking produce and waiting on my table–whatever their ethnicity– were being paid a fair wage. )

Bottom line: anti-immigrant rhetoric grounded in barely veiled bigotry may generate votes, but rational, comprehensible and humane immigration policies are more likely to reopen your favorite watering hole….

 

24 thoughts on “About That Shortage Of Workers…

  1. Like has been mentioned before, part of the problem now is the subterranean economy that is occupied by undocumented immigrants.

    Over the years starting in around 1990, things here started to change quite a bit. There were a lot of court cases that had been won by immigrants concerning housing and education.

    The housing issue was a big one, a single-family residence before could not be occupied by multiple families. This changed, and immigrant families pooled their money to buy homes in targeted areas. That court case was a big one.

    Another was the school voucher program.

    So, you have three or four families living in a single-family residence, with many children! The primary on the mortgage is responsible for property taxes, property tax Assessments are the biggest drivers of tax increases are the school districts. So, individuals who could not afford to buy a single-family residence by themselves, pooled together with mystery people from other states and who knows what else, to purchase properties.

    Then, with the school voucher program, three or four children from multiple families at a single-family residence want to send their kids to a Catholic school, or other religious educational program or charter program not affiliated with the public schools. The school district by law is now required to write a check for each one of those students who wish to go to a religious or charter school not affiliated with the public school district. Each check ranges between 10 and $15,000. So, what was a sustainable property tax program to fund schools, became a welfare program to pay for children’s private educations by having the taxpayers pick up the slack.

    This is not sustainable, taxpayers including myself have had our property taxes increase by 60% in the past four years, because the school district keeps assessing more and more increases to pay for the shortfalls in revenue that they are paying out funding these children’s private educations. A large portion, a lions share portion, are undocumented immigrants.

    So, what to do? The voucher program is a failure, people are losing their properties, especially senior citizens and the disabled property owners because they cannot continue to pay property taxes that are increased by sometimes 30% in one year. Another issue would be to bring the subterranean economy into the light, by legalizing individuals in this country, many who are sending their kids to public schools and running businesses! They pay no taxes, And, prefer to send their kids to religious OR charter schools where the teachers speak their language, whichever language that happens to be!

    Now, I don’t bear any ill will concerning people getting what they can get from government, but, when it affects how my life is, and the life of my grandchildren, then it becomes an issue that needs to be addressed immediately. And, government needs to quit fiddle farting around with it. Possibly this year, I will be abandoning this state because of what has been mentioned above here, to one of those welfare states in the South because their tax programs are much easier to afford. But, that’s only borrowing from Peter to pay Paul, because eventually those southern cheap tax states will be in the same boat as the donor states that I am in right now.

    The subterranean economy is only there because of the refusal to bring undocumented immigrants into the mainstream. I guarantee there is at least 50% of tax monies left off of the table because undocumented citizens have to find their own way to exist, and it doesn’t include the government for the most part. I’ve seen it myself, I talk with my neighbors, many who are undocumented, and they readily admit to not paying taxes, but take advantage of voucher programs from the taxpaying citizens to send their kids to private schools!

    Construction businesses, food and nutrition services, some of which offer the best quality of work or the most delicious food I’ve ever had. No taxes! You can’t begrudge people wanting to find a way to exist, and those people have learned well, many live better than individuals who have struggled for years paying their taxes and sending their kids to public schools.

    The playing field needs to be level, it needs to be the same for everyone! If the government wants to increase its tax base, they need to quit the debate and just legalize everyone so that they can be part of the system and not a separate, and in some cases superior, parallel economy!

    I mentioned one of my neighbors plunking down cash for several trucks and trailers and plows, well, he just purchased several bobcats, and a couple of backhoes. All brand-new, all-cash! Several individuals approached my father-in-law, and asked if he would sell his home for cash, all he had to do is name is price, there is a shortage of homes here, and that might be the only benefit, property values are going up rapidly here.

    It’s a broken system, and it needs to be fixed, but I have a lot of doubts on if it will ever be repaired, and we will continue to have a separation in this country driven by documentation!

  2. As usual, John captures the essence of the problem and uncovers the Republicans’ utter lack of ideas that are GOOD for our country. It’s all about attacking their opponents, cheating at elections, gerrymandering to stay in power and lying through their collective anuses in order to satisfy their sponsors in corporate/banking America.

    The right wing media supports the lack of ideas, gerrymandering, cheating and the attendant bigotry. How to good, clear-thinking people escape this trap of lies? Why are liberals and Democrats so often painted as the enemy? Why is tyranny ascendent in the GOP?

    The Trump disease has left ashes and dead bodies (literally and figuratively) strewn across our nation. It will take at least a decade for reason and fairness to regain a foothold in our national spirit. Good luck with that.

  3. “A 2020 study by Yale economists found that–convenient as that argument may be–it’s wrong. Unemployment benefits don’t create a disincentive for job seekers.”

    Unemployment benefits eventually end; the need for workers and workers’ need for jobs will not. The problems facing eateries and bars (and WHY were bars considered vital businesses and allowed to stay open in some areas?) may be facing a much bigger problem of a lack of customers. For most of the “average Americans”, eating out meant their favorite fast-food restaurant where prices have risen to near the rate of many actual restaurants and costs in actual restaurants, plus the required gratuity, are way beyond the “average Americans” budget. Especially struggling to come out of the full Pandemic while fearing those who refuse to wear masks who are appearing more and more in crowds and shopping areas.

    Immigrants are facing lack of available jobs but I am aware of the businesses where I shop who still only have 1 or 2 black employees and some have none. Racism and bigotry remain a deeply ingrained problem in this country and is connected to joblessness and the sagging economy. Trump’s immigration policy and open racism, exacerbated the problem but did not cause it; it remains a long-standing governmental problem which no administration has been able to even ease for this country as well as the immigrants.

  4. But John, how would the faux Republicans manipulate their base if they did the logical thing in this case?

    The nonprofits are also killing American homeowners. Standards and Poor rates our community low because of all the nonprofits. The costs to operate the government (the commons) keeps increasing, but when they divide up the costs for property owners and subtract the nonprofits (millage rates), guess what?

    Our community is at 35% nonprofit.

    Before the pandemic, our economy was forcing Americans to pool together resources as best they could to survive. Many kids were moving back home who were starting their careers because they needed roommates to survive, and that was not always a preferable choice.

    Then the economy contracted during the pandemic, making it worse. Now that it is expanding, employers expect workers to hustle back to work when many don’t feel safe, and others hated the crappy jobs; guess what?

    What’s sad is the Democrats aren’t doing near enough to get us where we need to be, and the GOP are just obstacles along the path. We are decades behind where we need to be. We just praised essential workers for a year with signs and billboards, but when it came time to give them meaningful raises to a livable standard, we whiffed badly. Now the employers are whining.

    Tough shit.

    When you take advantage of people, they will find a way to exist without you.

  5. The statement, “We can’t find any good workers to hire,” comes with a silent, “at the rate of pay we are willing to give.” If there is one way to motivate people to work for you, it is giving them wages and other benefits that would be enough to entice them. $2.25/hour + tips and no benefits is not particularly enticing.

  6. Vernon,

    Absolutely! This is just another example of a house divided cannot stand!

    You can’t, as a society, ostracize large sections of that society’s citizenry and expect a successful form of government. All it does is breed more ill will amongst the population. And, maybe that was the point of all of this all along? After all, if someone is fighting out your front door, your attention is focused on that fight at your front door. That leaves the back door vulnerable! And, that’s were the flimflamery and con-artistry take full advantage!

    The infrastructure is actually in place for equal taxation among citizens and noncitizens, the government does it all a time with corporations. Some sort of amnesty program should be offered to bring all existing so-called subterranean citizens living in this country, to the surface. People like to point to the Latin-X population, but the Polish, the Ukrainian, the Russian, the Chinese, Indian, together make up a majority of undocumented immigrants, usually just overstaying their visas! This isn’t as sexy as climbing a border fence, but it’s done in plain sight with the knowledge and a wink from our government.

    This crap needs to stop, it’s really not that complicated! If they Cannot do it by official legal measures, it should be done by executive action including forcefully applying pressure on the legislative branch or eliminate the legislative branch completely. The biggest threat doesn’t come from immigration, it comes from the hypocrisy and con artistry of a certain segment of government! Rectify that in your rectify society.

    Vernon, you should write a book on it! I’ve got three of them now and they’re all really good.

  7. John,

    For the sake of my sanity, I stopped writing political non-fiction books. I try to incorporate social messaging in my novels, now. Go to http://www.vernturner.com to read the blurbs and, hopefully, pick up the books. My readers tell me they’re “gripping”. My 6th novel, “The Immigrant’s Grandson” will be out later this year.

    Thanks for your support.

  8. I find this blog extremely valuable. But, sometimes, when I try to use it to change the minds of folks on the other political side, I find that some of the language interferes with their ability to absorb the wonder information that Sheila presents. For example, instead of saying “a GOP hack,” it might go over better so say “partisan” or “ideolog.” And instead of saying “Trump’s immigration policies” it might be more conducive to a dialog to say “our previous immigration policies.”

    A change of tone won’t affect the regular readers (like me) but might help open up a dialog with those who don’t agree with us.

  9. Boy did the BS started early, but at least it gave me a good laugh.

    I used to carry a gun as it was a necessity in both the poor white and black neighborhoods I worked in. They both had equal opportunity violence.

    I no longer carry as it isn’t necessary. I know many retired LEO’s and all still carry I understand they have some trust issues from a lifetime exposure to violence and have issues with being on the wrong end of a weapon. That I understand but I think it is an occupational blinder. For the most part, I know a few different kinds of gun owners. Hunters, sport shooters that shoot targets and clay, self-defense (home and personal), status (posers and criminals), and business (legal and illegal). I may be missing a few and there is definitely much overlap of the categories but for most, it is simply fear that is their motivation. Most of these people are some of the most fearful people I know.

    In my opinion, one of the biggest issue with jobs is you have criminalized marijuana. That means people who are honest aren’t often considered and you force people to cheat on their drug tests for marijuana creating fear and dishonesty from the beginning. If they have an on-the-job accident and test positive they lose their job, their income, their self-confidence and have to cover any and all costs. After all, they are breaking the law and as an employer, you can totally shirk responsibility even if you are a contributing factor as the employer.

    The only areas that have thrived and most businesses locate are far away from their potential workforce. Most of those people cannot afford transportation to these locations and most are not considered “trainable” by potential employers because they are not polished enough to work with an upscale clientele. Guess what folks your polished people don’t work as service workers unless they have outside support from parents or another. You block public transit as an unnecessary boondoggle when your roads are subsidized at far higher expense and costs.

    If you expect Carmel housewives or their children are going to do jobs they hear demeaned they aren’t even going to consider it unless they are extremely driven and/or need the money. Then they generally have transit and a roof over their heads and most who don’t need jobs don’t take them.

    Then to listen to the uninformed folks that are great at spouting and regurgitating every absurd demagogic thing they have heard in a loop repeatedly drumming the same beat of their favorite network I can’t help but laugh. They exist on the far right and the far left in fact they have so much in common if you connect the dots full circle you come up to the conclusion at some point (dark side of the moon) the two merge and they are impossible to tell apart.

    They are all flat, freaking crazy.

  10. I think several people here have made good points:

    The reduction in immigration has reduced the labor pool for low-wage workers. At the same time, it can’t be that taking advantage of a group of people is a viable or morally acceptable economic model. Keeping groups of people in a “shadow economy”, as John has pointed out, is hurting all of us. Multiple families in a single family home damages neighborhoods and makes the economics of schools unviable.

    Todd is also correct that in Center Township more than 1/3 of the property is subject to mandatory / discretionary tax abatement. Fees in leu of property taxes needs to be a thing for non-profits, churches, hospitals, and such. Putting a solid cap on the amount of tax base that is allowed to be tax abated could be another solution.

    I also know that getting the right worker into the right job takes time. Employees are not a water faucet that you turn off, and then turn on when you need them. It’s never worked like that. In addition to the low wages and continuing safety issue, is the fact that kids aren’t in school, and daycare has shut down (some permanently).

    Erik’s comment is also on point. The silent “… at the rate that we are willing to pay” should not be allowed to remain silent. I appreciate that businesses are facing multiple challenges such as forced closure, parts and supply shortages, cleaning and screening costs, etc. however, the reality is that over decades they’ve become addicted to low-wage labor that has allowed other business expenses to climb (rents, CEO pay, technology, marketing, etc.)

  11. As always, it’s not that they can’t find workers; it’s that they can’t find people willing to do the job for the pittance they pay.

    Capitalists don’t seem to understand that their beloved Supply and Demand applies to workers as well as goods.

  12. On reddit there are a number of pages whose names start with “TalesFrom…” such as Tales From The Front Desk (hotels), Tales From Retail (target etc), Tales From The Call Center, etc. One is called Tales From Your Server.

    Apparently the people returning to restaurants now are behaving so abominably, and are so hatefully arrogant and entitled, that I’ve seen close to fifty posts over the last few months saying that they quit and will never return to restaurant work. Luckily the stimulus and UI boost can give people enough breathing room to find something else.

  13. We are now fully vaccinated and traveled for the first time in a more than a year. On our drive back from visiting family, we passed through Alabama and Kentucky. In Kentucky we encountered an interesting thing. I don’t know if it was lack of employees or business owners trying to avoid risk, but several fast food places had the drive through open, but the doors were locked and signs were posted that the “lobby is closed”. Kentucky still has a mask mandate in place, but I suspect only about 2 out of 3 people paid attention to it.

    We made two stops in Kentucky, in mostly suburban areas, and I don’t know if a 10% shortage of workers (the amount of immigrants workers cited by the study) would have translated to closing lobbies. I suspect the real reason was risk mitigation by business owners, either from exposure to disease, or irate non-mask wearing customers. Maybe these places had previously experienced outbreaks and had to shut down while full crews had to quarantine. Or, maybe the workers themselves would refuse to show up to be exposed to a mask-less public.

    Unfortunately I don’t have any studies to back up my speculations, but I think a lot of factors are at work here and lack of immigrant workers is just one of them.

  14. Contributors today have put their fingers on the causes of labor shortages, among which is my favorite whipping boy, wage inequality. Governmental programs ( or lack thereof in re education, rational immigration programs, under the table non-tax payments, fear of the virus and/or deportation etc.) are all involved in such shortages as well, of course, and wage rates even if fair and equitable are likewise not served up in a vaccuum; price inflation always hovers over rate. I would argue that it is the role of government to adopt AND enforce policies that end the underpinnings of the horrors described by John Sorg today, per the following.

    Dishwashers as well as journeymen plumbers should be paid a living wage whether immigrants or natives and of whatever hue or gender. Labor is labor and is entitled to the recognition of the dignity of work as well as living wages, from janitor to CEO.

    But, say the capitalists, if we pay people what you pro-labor enthusiasts say they’re worth, our profits will plummet and we cannot invest in new plant and expansion of the economy. Wrong. The payment of living wages will cause a large increase in aggregate demand for the goods and services produced by the capitalists which will both increase their profits and the need for new plant which will in turn expand the economy and, among other things, revenue to government.

    In the old world of supply and demand of Adam Smith, a Scot, England was (and for some 175 years thereafter) a colonizer unapposed to slavery beyond its borders and the cheap imports thus provided, including cheap-slave produced cotton from its colonies in the south of North America for its looms in Manchester and Leeds. Unlike today in this country, England did not import slavery sub rosa, as we have in effect done with terrified immigrants in fear of deportation, immigrants who will work for cheap in order to avoid detection.

    So where is government in this fixable morass of social and economic misadventure? Could it be that capitalists (aka big campaign contributors) prefer the present system of deportation fear in order to employ illegals at starvation wages in order to keep a lid on labor costs and thus enhance their bottom lines? Perhaps a presidential commission armed with subpoena power could look into these not so mysterious shenanigans with a view toward recommendations for remedial legislation to correct the wrongs cited by John Sorg today, wrongs ranging from tax evasion to and including education, wage and hour laws, immigration policies etc. Committee hearing on such topics from witnesses under oath should be more than interesting.

  15. Labor shortages? We ain’t seen nuthin’ yet. Just wait until good paying union jobs in the repair and renewal of our infrastructure gets into the act. I expect to see shortages even in such good-paying jobs, and with the flood of money which will invigorate ancillary industries I expect to see shortages there as well. Two things would alleviate these shortages: (1) achievement of herd status in re Covid, and (2) substantial wage increases in ancillary industries such as travel, bars, restaurants, construction, etc.

    Another public investment we should be making now in view of the impending shortage of labor involves vocational education, since, among other things, the infrastructure effort involves roads, bridges, ports, airports, buildings, and other specific know-how of particular projects, we should be training the untrained out front in anticipation of such shortages since we will need them not only for public projects but also for the coming boom in such projects by ancillary industries as the economy expands with the upcoming surge in aggregate demand.

  16. If you pay them, they will come. If their kids are in school or have day care, they can work. If they have a way to get to work, they will work. There are any number of barriers which make it difficult for people to work. Making and keeping more people poor makes the whole economy poorer.

  17. Gerald,

    Right on brother, take a look at the dual training system in Germany concerning vocational education!

    It’s called the BMBF, and it bypasses so much of the unnecessary almost immediately forgotten teachings for something that is used every day in a person’s chosen vocation. It’s very successful, AND, one reason why Germany has such a skilled workforce.

    I know individuals claim that that’s just a caste system waiting for a tyrant, but, if a person ends up being a plumber, or a carpenter, or an auto mechanic, or a diesel mechanic, or a technical services advisor and repair person, a pilot, a welder, any number of jobs, they should be the best and equipped, the best through training and education, through apprenticeships and other entry-level training programs.

    All of these jobs, they pay extremely well and can be the backbone of a strong economy. Especially if you have a livable minimum wage (universal basic income) provided to everyone including farmworkers and food and travel service employees. Because they will make use of the services learned in the vocational training and educational programs! Hence, the middle class reborn, but, with the caveat of everyone earning a livable wage.

    Universal health coverage would also be a start. And, for those individuals who are not in vocational classes, free junior-college for all citizens if desired. If you recall, high school was like junior colleges today. High school then became part of the regular curriculum. Junior-college should be considered part of regular curriculum. Of course if a person is enrolled in vocational schooling programs, that junior-college would be bypassed to get those individuals into apprenticeship programs and entry-level experience programs to hone their skills.

    Another thing would be to legalize marijuana and take the impetus of violent turf battles away from the gangs. They wouldn’t have much to fight over if a person could walk up the street and buy it from a legal licensed business that pays taxes! Heck, some places have a liquor store on every corner in some neighborhoods, so how can we claim smoking weed should be legislated against. If weed is a gateway drug, so is alcohol!

  18. I have a classmate in South Bend ready to open his restaurants up again and has advertised for staff. Servers $10 an hour + tips. Considering the minimum wage for servers is $2.13 an hour + tips, I think he’ll have no problem getting staff. As always “Follow the Money.” I wonder though if he’s seen my comments on FB about “pay live able wages or shut up” to no one in particular in the restaurant business. They have gotten away with paying slave wages long enough.

  19. John – This German apprentice program is the backbone of its “smart manufacturing” which has moved the country to the second highest trade surplus position in the world, outdone only by China; and all while we are the nation that has by far the highest trade deficit in the world, a dubious distinction we have held for years. Query > Did we save money by not having such an apprentice program in favor of a horse and buggy “not so smart” manufacturing system which, after all, would if adopted involve the exenditure of tax money? Hardly. The hundreds of billions lost in trade deficits over the years have moved into trillions territory.

    So is it too late to spend money to make (or at least not lose) money with the adoption of such an apprentice program? No. You start from where you are – and here we are – and if we have money for building a wall along our southern border we have money to enhance the skills of our workforce and win trade wars.

  20. “A 2020 study by Yale economists found that–convenient as that argument may be–it’s wrong. Unemployment benefits don’t create a disincentive for job seekers.”

    That study didn’t quite say that.

    “We emphasize that our results do not speak to the disemployment effects of UI generosity
    during more normal times, which is the subject of a vast literature (Schmieder and von Wachter
    (2016)). The severity of the decline in labor demand and the health risks to workers make the
    current pandemic different.”

    https://tobin.yale.edu/sites/default/files/files/C-19%20Articles/CARES-UI_identification_vF(1).pdf

    I highly doubt the basic laws of economics have been reversed. If someone is going to make $2000 a month going to work but they have the option of making $3000 a month not going to work, a sizeable number of people, probably even a majority, are going to choose the latter. That’s just basic economics…and common sense. Although anecdotal evidence, during the pandemic I’ve talked to plenty of employers who said they were struggling to find workers b/c unemployment was paying them more to stay home.

  21. Paul – please speak to the employees to find out why they are staying home. Your example figures don’t add up for me. And frustrated employers may not be the best explanation providers.

    Some reasons I can imagine that might interfere with going to work:

    Uncertainty about COVID and safest practices – do the frustrated employers have all of that properly buttoned down?

    Lack of reliable and affordable child care.

    Lack of reliable transportation – multiply that with the need to drop a child off at day care on the way to work.

    Illness – undiagnosed or untreated, general poor health, combined with the total tangled mess that describes health care available to lower wage workers.

    Lack of affordable, inhabitable housing – i.e., how are you going to get clean so you can go to work, or clean your clothes?

    Hopelessness that anything will get better, supporting a why bother approach – depression in other words – yes, it’s real.

    I hope this is enough to prop your eyes/mind at least a tiny inch open…

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