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The debate continues over the labor force participation rate

Friday, Oct 22, 2021

* Yahoo Finance

In September, the labor force participation rate was 61.6 percent, down from 63.3 percent in February 2020, pre-COVID-19, according to the U.S. Bureau of Labor Statistics.

“That’s a dip of about 4 million people in the labor force,” Johnson said.

In September, Illinois’ labor force participation rate was 62.8 percent, down from 63.7 percent in February 2020.

* AP

Earlier this year, an insistent cry arose from business leaders and Republican governors: Cut off a $300-a-week federal supplement for unemployed Americans. Many people, they argued, would then come off the sidelines and take the millions of jobs that employers were desperate to fill.

Yet three months after half the states began ending that federal payment, there’s been no significant influx of job seekers. […]

An analysis of state-by-state data by The Associated Press found that workforces in the 25 states that maintained the $300 payment actually grew slightly more from May through September, according to data released Friday, than they did in the 25 states that cut off the payment early, most of them in June. The $300-a-week federal check, on top of regular state jobless aid, meant that many of the unemployed received more in benefits than they earned at their old jobs. […]

Nationally, the proportion of women who were either working or looking for work in September fell for a second straight month, evidence that many parents — mostly mothers — are still unable to manage their childcare duties to return to work. Staffing at childcare centers has fallen, reducing the care that is available. And while schools have reopened for in-person learning, frequent closings because of COVID outbreaks have been disruptive for some working parents.

* NY Times

Conservatives have blamed generous unemployment benefits for keeping people at home, but evidence from states that ended the payments early suggests that any impact was small. Progressives say companies could find workers if they paid more, but the shortages aren’t limited to low-wage industries.

Instead, economists point to a complex, overlapping web of factors, many of which could be slow to reverse.

The health crisis is still making it hard or dangerous for some people to work, while savings built up during the pandemic have made it easier for others to turn down jobs they do not want. Psychology may also play a role: Surveys suggest that the pandemic led many to rethink their priorities, while the glut of open jobs — more than 10 million in August — may be motivating some to hold out for a better offer.

The net result is that, arguably for the first time in decades, workers up and down the income ladder have leverage. And they are using it to demand not just higher pay but also flexible hours, more generous benefits and better working conditions. A record 4.3 million people quit their jobs in August, in some cases midshift to take a better-paying position down the street.


Economists say changing demographics like ageing and retiring workers are a factor behind the shortages, as well as border controls and immigration limits, and demands for better pay and flexible working arrangements. […]

“We believe there is a more permanent loss of workers driven by a large number of older workers taking early retirement. The thought of returning to the office and the daily commute may seem unpalatable for many people and with surging equity markets having boosted 401k pension plans, early retirement may seem a very attractive option,” [ING economists Carsten Brzeski, James Knightley, Bert Colijn and James Smith] noted, adding that border closures will have curbed immigration and slower birth rates mean fewer young workers are now entering the workforce.

* Business Insider

Joey Holz recalled first hearing complaints about a labor shortage last year when he called to donate convalescent plasma at a clinic near Fort Myers, Florida.

“The guy went on this rant about how he can’t find help and he can’t keep anybody in his medical facility because they all quit over the stimulus checks,” Holz told Insider. “And I’m like, ‘Your medical professionals quit over $1,200 checks? That’s weird.’”

Over the next several months, the 37-year-old watched as a growing chorus of businesses said they couldn’t find anyone to hire because of government stimulus money. It was so ubiquitous that he joined a “No one wants to work” Facebook group, where users made memes deriding frustrated employers. […]

Two weeks and 28 applications later, he had just nine email responses, one follow-up phone call, and one interview with a construction company that advertised a full-time job focused on site cleanup paying $10 an hour.

But Holz said the construction company instead tried to offer Florida’s minimum wage of $8.65 to start, even though the wage was scheduled to increase to $10 an hour on September 30. He added that it wanted full-time availability, while scheduling only part time until Holz gained seniority.

- Posted by Rich Miller        

  1. - Chicagonk - Friday, Oct 22, 21 @ 2:18 pm:

    Keep attracting immigrants and make it easy for undocumented workers to get jobs (as long as they are getting paid minimum wage or above and not being exploited).

  2. - Ares - Friday, Oct 22, 21 @ 2:20 pm:

    The answer will depend on the company and the industry, but is the “shortage” one of genuine lack of applicants for a job, or 3 applicants / 1 job opening v 30 applicants / 1 job opening? Years of underinvestment by govt in training / education, in favor of headline-grabbing tax incentives and corporate-relocation beauty contests, have also contributed.

  3. - Mayo sandwich - Friday, Oct 22, 21 @ 2:23 pm:

    This might be interesting:

  4. - Rich Miller - Friday, Oct 22, 21 @ 2:25 pm:

    ===This might be interesting===

    Yeah. It’s actually IN THE POST. For crying out loud, read before commenting. Sheesh.

  5. - Precinct Captain - Friday, Oct 22, 21 @ 2:26 pm:

    A devastating disease wiping out hundreds of thousands and debilitating others, yet hardly mentioned.

  6. - Dotnonymous - Friday, Oct 22, 21 @ 2:27 pm:

    The time of working crummy jobs for crumbs is over.

  7. - Lynn S. - Friday, Oct 22, 21 @ 2:39 pm:

    Sure sounds like Mr. Holz is getting schooled by karma.

    Gotta wonder if he’s rethinking his Facebook groups and their posts.

  8. - 47th Ward - Friday, Oct 22, 21 @ 3:00 pm:

    It’s not really a debate anymore, is it? Seems clear that the side arguing that the extra unemployment benefits made people too lazy to go back to work were quite wrong.

    And yet…

  9. - Oswego Willy - Friday, Oct 22, 21 @ 3:05 pm:

    There is this feeling that the pent up anger towards immigrants or “libs” or “young” or whatever group is threatening the “hardworking” angry white Republicans who are anti-union, anti-raising the minimum wage, and “people are lucky to have jobs” folks looking to point anger… somewhere.

    If we take away and purposely hurt people to force them to work, that’s good for America… and yet… cutting benefits…

  10. - Lt Guv - Friday, Oct 22, 21 @ 3:15 pm:

    == It’s not really a debate anymore, is it? Seems clear that the side arguing that the extra unemployment benefits made people too lazy to go back to work were quite wrong.

    And yet… ==

    It’s all their simple minds can handle. Depth and nuance is not their thing.

  11. - KSDinCU - Friday, Oct 22, 21 @ 4:07 pm:

    Lynn, I think the part about the Facebook group is a red herring. From the NYT article:

    “Some businesses seem determined to wait them out. Wages have risen, but many employers appear reluctant to make other changes to attract workers, like flexible schedules and better benefits. That may be partly because, for all their complaints about a labor shortage, many companies are finding that they can get by with fewer workers, in some instances by asking customers to accept long waits or reduced service.”

  12. - Mayo sandwich - Friday, Oct 29, 21 @ 10:36 am:

    Here is a different BI article along the same veins.

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