july2021 - 14

THE LABOR LAW ADVISOR
Where Have All the Workers Gone?
THE SUCCESS OF the ongoing Coronavirus vaccination program, with about one half of
the U.S. population already vaccinated, and the dramatic drop in hospitalizations and
positivity rates support the conclusion that the pandemic is all but over. In response,
almost every state has reopened for business with few if any lingering restrictions.
RICHARD D. ALANIZ
Senior Partner
Alaniz Schraeder Linker Faris Mayes, L.L.P.
ralaniz@alaniz-schraeder.com
However, the long-anticipated
reopening of the economy has hit
an unexpected roadblock - a serious
lack of workers to fill the millions of
available positions. With the massive
loss of jobs during the pandemic due
to layoffs and business closures,
both temporary and permanent, the
expectation undoubtedly was that the
reopening would see a rapid return of
those workers who had been sidelined
for those many months. The expected
mass return has been more of a
trickle of returning workers. Millions
of job openings are going unfilled.
Recent monthly jobs reports confirm
that hiring has been much below
expectations. For example, employers
added only 266,000 jobs in April, far
below the one million forecast by
economists. In April there were 8.1
million job openings. One month later
that number stood at 9.3 million job
openings across the country. While
the inability to hire has been most
acute in the hospitality industry,
especially restaurants, other industries,
including
manufacturing,
warehousing, and food processing
have been significantly affected as
well. " Jobs available, " " Now Hiring, "
and similar signs are ubiquitous
across the country.
A recent U.S. Chamber of Commerce
poll found that one in three
unemployed workers do not expect
to return to work in 2021. Even more
alarming is the fact that approximately
one half of those polled
indicated that they have no plans of
returning to work at any time in the
future. The reasons for the reluctance
to return to work has been the subject
of intense discussion and speculation,
with the conclusion being that the
reasons are varied and complex.
Many point to what has been
described as the " perverse incentive "
not to work because of the $300
federal unemployment supplement
that is on top of the state benefits,
which average around $300. Many
employees can make more by staying
home than by working. Such
enhanced benefits have essentially
priced employers out of the market.
The federal supplement is scheduled
to end on September 6, 2021.
While there was some preliminary
discussion in the Biden administration
of extending the supplemental
benefit beyond September, a number
of Senate Democrats have recently
signaled that they are unlikely to
support an extension. In addition,
the governors in some 25 states
have unilaterally decided to halt the
federal jobless benefits within their
states earlier than its scheduled
expiration. Initial efforts by the
14 JULY 2021 ■ www.CPAPracticeAdvisor.com
Biden Administration to prevent such
actions have since been dropped.
The enhanced unemployment
benefits are certainly not the sole reason
for the lack of returning employees.
For some, especially working
mothers of school-aged children, it
has been the school closures and lack
of childcare that has made returning
an impossibility. Still others cite
concerns over potential exposure
to Coronavirus if they return to the
workplace. With the success of the
nationwide vaccination program, this
claim becomes less viable with each
passing day. In addition, virtually
every employer continues to comply
with the CDC workplace safety guidance
and protocols.
In some cases, baby boomers
nearing retirement age who lost
their jobs early in the pandemic have
simply decided to retire earlier than
previously planned. Some workers
have been slow to return because
they are being choosier about their
job choices, are switching jobs, or
may even be seeking a career change.
These all require more time to connect
with a new employer. Finally, for
some unemployed workers who wish
to return, there is the problem of a
lack of the particular skills needed
for the jobs available.
In addition to the state efforts
to end the federal unemployment
supplement in hopes that it will cause
at least some workers to return, private
employers have taken a variety
of actions to help attract workers.
These include wage increases, hiring
and retention bonuses, college
tuition reimbursement, paid family
leave, and even healthcare benefits
by some restaurant groups.
For example, Amazon is offering
$1,000 signing bonuses in addition to
increasing wages by up to $3.00 per hour
for over 500,000 employees. Chipotle,
McDonalds, Tyson Foods and countless
others are all raising wages to attract
workers. In the case of McDonalds, it
plans to raise wages for more than
36,500 employees by an average of 10%
over the next several months.
All of these efforts to spur hiring
underscore the increasing concern on
the part of many that the economic
recovery is in serious jeopardy just
as the country is fully reopening.
Whether the recent failure of the
hiring rate to even approach the
numbers forecast by economists is a
trend that will continue no one can
tell. It may well be that the efforts
to make jobs more financially attractive
in a rapidly expanding economy,
coupled with an end to the enhanced
federal unemployment benefits, will
finally cause those workers who
have remained comfortably on the
sidelines to finally return to the
workplace. All we can do is wait and
see. ■
http://www.CPAPracticeAdvisor.com
july2021

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