Workers looking to advance
Editor’s note: This is the second of two stories about the area’s shortage of employees.
The “perceived” labor shortage that businesses blame on COVID-related expansion of unemployment compensation is due to various causes — and it also reflects an ongoing major reevaluation of the place of labor in people’s lives, according to a spokeswoman for the state Department of Labor and Industry.
Businesses are having problems finding workers not so much because of unemployment compensation, but more because “many Pennsylvanians are still waiting to complete the full vaccination process or are facing other pandemic-related factors that prevent them from rejoining the workforce, such as children (learning remotely) from home or a lack of child care,” L&I’s spokeswoman Sarah DeSantis wrote in an email.
But the unemployment compensation benefits and the time they have given to people to take stock of their futures has created a unique opportunity, according to DeSantis:
“The American economy is undergoing a Great Reassessment of Work, which is not exclusive to Pennsylvania,” she wrote. “From wages to benefits, workers are reassessing their needs and priorities with respect to employment, and are shifting occupations and industries accordingly.”
Two-thirds of unemployed workers are considering an occupational change or seeking work in a different industry, she wrote.
“This dynamic is compounded in certain high-visibility industries, such as retail and hospitality,” which has led to the labor shortage perception, she wrote.
Meanwhile, higher-paying industries with strong career pathways and benefits, including logistics and transportation, have increased employment levels, reflecting some of the shift in focus, she wrote.
The situation should stabilize before long, she said.
“We are confident that as conditions improve, workers will be enticed to return (to the workforce),” with help from workforce development programs and elimination of “hurdles” like lack of access to affordable and reliable child care, she wrote.
Meanwhile, federal unemployment supplements and extensions have been invaluable, generating economic activity that has “saved or created” 81,000 jobs in the state, according to L&I calculations, she wrote.
Losing ‘relative power’
The post-pandemic labor situation seems to be helping to make a “correction” in the balance of power between lower-wage employees and the businesses that employ them, which seem to be the main ones having trouble, according to Mark Gough, associate professor of labor and employment relations at Penn State.
During the past three decades, as the U.S. has shifted to a “knowledge economy,” wages have been “pushed down for those at the bottom” — even as they’ve risen for those at the top, Gough said.
Now employees are getting some power back to help boost those low wages, he said.
Employers are complaining, and that’s understandable, he said.
“They’re losing relative power,” he said. “It’s a new sensation for them.”
Their complaints may be especially understandable because in some cases, they’ve been damaged the most by pandemic shutdowns, he conceded.
Conversely, the businesses that complain generally don’t open their books and offer to prove they can’t pay enough to make their hiring problems disappear, he said.
It’s unclear how long the shift in power currently favoring low-wage employees will last, Gough said.
If the source of that increased power turns out to be only the result of expanded unemployment compensation, it will “evaporate very quickly,” he predicted.
But if there are “larger structural issues” in play, it could last, he said.
One structural issue that seems to be in play is the opportunity that the pandemic situation has created for workers to consider and plan for training and education to better themselves, according to Gough — echoing DeSantis.
It’s not necessarily in the best interest of society or of workers themselves to return to jobs as quickly as possible, Gough said.
“If someone could be a great teacher, I’d much rather give them the opportunity and time to find that job, as opposed to making them work at Wegmans,” Gough said. “And I love Wegmans.”
There are tradeoffs with unemployment compensation, he said.
Clearly, some people are lazy and will take advantage, he said.
But there are fewer such people than “most of the conversations would have us believe,” he said.
It’s not lazy to turn down a job that pays a few dollars an hour plus tips, if you’re “trying to find something that is more beneficial to you and frankly, society,” Gough said. “I don’t want the future teachers, nurses, mechanics and day care workers of Altoona just taking any old job,” he said.
While unemployment compensation costs money for society, there are benefits all around when there’s a good match between the talents and inclinations of workers and the jobs they ultimately settle on, according to Gough.
Conversely, mismatches hurt, he said.
“The broader narrative is people trying to educate themselves and gain the human capital required to make their own lives better as workers and improve the entire economy,” Gough said.
One of the characteristics of the U.S. economy in recent decades has been the decline of unionization — overall 11% of workers are represented, with only 6% in the private sector, Gough said.
That is pertinent to the current situation, because if the jobs that were lost due to COVID-19 would have been union jobs, with better pay and benefits, businesses wouldn’t have had trouble refilling them, according to Gough.
Unions not only are a tool for “balancing power,” but they’re also effective clearinghouses for training and retraining, he said.
Yet “they’re often made out to be boogeymen,” he said.
Businesses need to realize that to get good workers, they need to pay more, according to Bob Kutz, president of the Blair-Bedford Central Labor Council.
“Folks are going to have to step up if they want to survive,” he said.
Too often in the past, they’ve “cried wolf,” he said.
No business needs to close “because they have to raise a guy’s wages a couple bucks an hour,” he said.
The minimum wage in Pennsylvania, which is the federal minimum of $7.25 per hour, has been the same since 2009.
“My God, do you think it’s time (to raise it)?” Kutz asked rhetorically.
Some people from the area have gone to other states for work, because businesses there tend to pay better, Kutz said.
The minimum wage is $15 in New York; $11.75 in Maryland; $11 for most workers in New Jersey; $9.25 for most workers in Delaware; $8.75 in West Virginia; and $8.80 for big employers and $7.25 for small employers in Ohio.
But business groups lobby against a hike, he said.
“In order to get good people, you’re going to have to pay for them,” Kutz said.
Mirror Staff Writer William Kibler is at 814-949-7038.