, Taking Labor Shortages Seriously – Economywide, The Nzuchi News Forbes

Taking Labor Shortages Seriously – Economywide

, Taking Labor Shortages Seriously – Economywide, The Nzuchi News Forbes

“Emilio Enriquez has climbed from busser to line cook during his seven years working in restaurants, and he still dreams of becoming a chef.

“But he hasn’t worked during the COVID-19 pandemic and won’t look for a job until fall, once unemployment benefits no longer pay more than he would likely earn working and, he hopes, more people are vaccinated.

‘This is what I want to do in the long haul,’ said Enriquez, 25. ‘I’m just not ready to do that yet — especially since I’m making more at home.’”

These paragraphs — the opening paragraphs of a front page article in the Chicago Tribune earlier this month — are a rare instance of a journalist openly citing a nominally-”unemployed” individual choosing to stay out of the job hunt until after unemployment runs dry; far more often newspapers claim that these individuals just don’t exist, that the folks continuing to collect unemployment are truly unable to find work or truly prevented from working due to child care difficulties.

The remainder of the article discusses the labor shortage in the restaurant industry, from servers and bartenders to dishwashers and cooks. Industry experts reported that former employees had found work in other fields: “cannabis, distribution centers like Amazon and UPS, delivery services,” and the article interviewed half a dozen people, most of whom indicated plans to return to college in the fall instead of returning to a restaurant-industry job. Among the complaints cited by these workers, as well as by an advocacy group, One Fair Wage, were low pay, unpredictable and late hours, harassment from customers or co-workers, failure to follow safety requirements, and the health effects of exposure to sanitization chemicals.

What’s the fix? The industry representatives cited did not promote ending the bonus unemployment benefits. Instead,

“The biggest fix, [Hopleaf owner Michael] Roper said, would be “a rational immigration policy” that welcomes the people who do much of the hard labor in the United States. [Illinois Restaurant Association president Sam] Toia also championed immigration reform to boost the service industry, including an immigrant work visa program endorsed by the National Restaurant Association.”

But let’s set aside the issue of the $300 weekly unemployment bonus. Let’s take people at their word that this is a longer-term issue that has to do with the unattractiveness of restaurant work rather than government benefits, paid out on the premise that no work is available, leading people to turn down work. What’s to be done? It would seem obvious that the answer is simply for those complaining restaurants to boost their wages to a level that makes those jobs attractive despite the late hours. The reality is, of course, that to do so would require boosting menu prices, a change which results not only in fears of inflation, but (and this is less discussed) will sooner or later result in customers dining out less often or choosing less expensive restaurants. But that’s not necessarily objectively a bad thing; there is, after all, no need for any given frequency of restaurant dining for one’s well-being, and a change in pay scales would simply change norms and expectations about frequency.

MORE FOR YOU

Yet, at the same time, the industry’s proposed solution, increases in immigration, hardly seems like the ethical and responsible solution if, indeed, the worker shortage is due to poor pay and job conditions in an objective sense, rather than due to a spectacularly-booming economy in which workers have their pick of any number of jobs with “living wage” salaries and benefits. Why would it be appropriate for a restaurant to obtain a work visa with which to pay an immigrant low wages, if those wages would create a class of workers with living standards which we deem too low for Americans? Is it ever acceptable to create a set of jobs with low pay rates (that is, by using immigration increases to prevent wage increases which labor shortages would otherwise generate), with the rationalization that the families those workers are supporting live overseas in countries with lower costs of living?

, Taking Labor Shortages Seriously – Economywide, The Nzuchi News Forbes

Right now we’re discussing this with respect to restaurants, because that’s highly visible to those of us economically prosperous enough to visit restaurants and see the labor shortage play out: the host who says, despite clearly empty tables, that it’s a wait to be seated. But readers can likely guess where I’m going with this: there has been a longstanding labor shortage with respect to home care workers and caregivers at nursing homes and related facilities. Is the solution to boost wages? To hire workers from overseas? To do both — boost wages and hire immigrant workers?

Wage hikes, of course, increases costs both for the government and for families who pay their expenses on their own. Where there are fixed governmental budgets, that means more families on waiting lists. For families, that means more making-do, family members providing care, or going without or with less care, and, ultimately, means finally answering the question of whether the federal government should pay eldercare expenses for middle-class elders as well as for the poor, and whether children of those elders have obligations to support their parents (in Germany, for instance, those earning over EUR 100,000 have a legal obligation to pay their parents’ eldercare costs).

The latter — well, it’s a whole ‘nother kettle of fish. In 2019, the organization LeadingAge launched an initiative it called the IMAGINE Initiative, which proposed a set of immigration changes to boost the number of immigrants working in elder care. The proposal cites models overseas, such as 5 year temporary employment for foreign eldercare workers in Israel and a program giving eldercare workers permanent residency in Canada if they complete two years of live-in caregiving. For the United States, they suggest a six-year guest worker program specifically for elder caregivers, carve-outs in the EB-3 professional immigrant program for CNA and RN positions, creating a loophole in the R-1 program for religious workers to include non-US elder caregivers employed by religious organizations, the creation of an au-pair-equivalent program requiring eldercare rather than child care, allowing more temporary immigration in the NAFTA-replacement free trade agreement with Mexico, and directing an increased number of refugees towards eldercare employment.

These proposals bear no little resemblance to guest worker programs in oil-rich countries, in which foreign, temporary workers account for the largest part of the workforce and in which, except for professional workers, those workers much leave spouses and children behind in their home countries. We tend to think that in these countries, the prevalence of foreign workers is a marker of the spectacular wealth of those countries, but that’s not necessarily the case: in Saudia Arabia (or at least as of a decade ago), 90% of all private-sector workers were foreign workers, while at the same time 40% of all Saudi citizens lived in poverty.

Adding to these issues the overall uncertainty about the impact of future fertility rates and automation on the economy, and there simply is no easy solution here.

As always, you’re invited to comment at JaneTheActuary.com!

More Stories
What Customers Teach Us About The Future Of Data