BSU Prof: Most common reasons behind the current labor shortage

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("Help wanted sign" by Andreas Klinke Johannsen, CC BY-SA 2.0)

You’ve probably noticed a nearby grocery store, restaurant or coffee shop changing their hours and closing early. It’s more than likely because they don’t have the employees to operate normally.

Just about everyone is still struggling to find workers, especially in the food service, hospitality and health care industries, says Mike Hicks, an economist at Ball State University.

“Well, there was much speculation that this was caused by a rather generous unemployment insurance,” Hicks told WISH-TV. “Those days are over. We are back to normal.”

According to Hicks, here are some of the most common reasons behind the labor shortage:

  • A need for child care, and workers not making enough money to cover the cost or having little money left over, so they stay home.
  • Changes in lifestyle resulting in a need for a change in work with many capitalizing on new remote positions.
  • Workers being dissatisfied with their jobs and getting more training to change careers.

So what’s the best way to fix the labor shortage?

“I think higher wages are going to be one of the consequences of this. I just don’t see any other way around it,” Hicks said.

Hicks added that some businesses will also need to increase their benefits to entice workers. Some businesses might use new technology to make up for the lack of staffing. But he also says some businesses simply can’t adjust their business models, and will eventually have to close shop.

2 COMMENTS

  1. Those benefits ended 24 days ago. This article is a few days old.

    All 3 of his “points” are not the causes of this labor shortage. People have always sat out because childcare is expensive. Not every job can be a remote one. The amount of people changing careers is small compared to the overall labor pool, and that didn’t happen in 18 months.

    The people who skated by on enhanced unemployment aren’t the sort of people to go out the week it expires and find a job. They’re going to continue to skate by until it is financially necessary for them to get to work. They will re-enter the job market gradually over the next couple of months.

    The comments of Mike Hicks are VERY premature.

    • I forgot to add that the increased SNAP benefits didn’t expire until today, and now they are making the increase permanent (and making it bigger) so there will be even less incentive for people to get back to work.

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