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For over a year now, companies have been complaining about how difficult it is to hire people.
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Some of the causes of labor shortages can be a lack of childcare, or employees who want better paid work.
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Mitch McConnell says the labor shortage will end when stimulus cuts run out.
For more than a year, legislators and companies have been too bad they can’t find workers†
There is a multitude of reasons why there are labor shortages: people have moved from locations with open positions; parents have been unable to return to work due to ongoing pandemic uncertainty; and the open positions may not be the right choice – in terms of skills or pay – for people looking to change jobs.
Senate Leader Mitch McConnell presented his own theory on Tuesday at an event in Paducah, Kentucky.
“You’ve got a lot of people sitting on the sidelines because honestly they’re flush right now,” the Kentucky Republican said. “What we have to hope is that if they run out of money, they will conclude that it is better to work than not to work.”
McConnell opposed President Joe Biden’s stimulus bill, which passed with only Democratic votes in March 2021 after two previous bailouts approved by the Trump administration. Republicans have long blamed that $1,400 direct payment to Americans for worsening inflation and helping keep people out of the workforce.
Yet there are plenty of Americans at work. The labor market has experienced a strong recovery, with jobs ready to fully recover this summer† In fact, the employment-to-population ratio for Americans aged 25-54 — considered the best age for work — has crept above its July 2019 levels, according to data from the United States. St. Louis Federal Reserve†
At least employees aren’t sitting on the sidelines — they’re leaving their current roles for new ones. In the past year, Americans have stopped at near record percentageseven if hiring and vacancies remain strong† This indicates that many people are quitting for better-paying jobs, especially in low-wage industries – who also have struggled anecdotally the most to assume†
Kentucky, McConnell’s home state, was briefly the epicenter of the Great Surrender† The sheer number of workers quitting and leaving the workforce was driven by structural conditions that existed long before the pandemic — and only exacerbated by COVID-19. That includes a lack of affordable childcare, a low minimum wage and safety concerns amid a still raging pandemic.
Americans have accumulated a huge amount of savings during the pandemic, thanks to several federal bailout packages. Moody’s Analytics estimates that households have built up an extra cash buffer a total of $2.6 trillion from the start of the pandemic until the end of 2021.
The same investment firm said in June that Americans had begun to withdraw their savings as prices were rising at the fastest rate in four decades.
Read the original article Business Insider