6 thoughts on “Restaurant labor shortages show little sign of going economywide

  1. The Economic Policy Institute has things exactly backwards.

    The enhanced unemployment benefits were passed specifically to help people get through the lockdowns resulting from the mandates issued to slow the spread of COVID. They were not intended as a permanent throttle for controlling wage levels.

    The emergency is over, the economy is rebounding, and continuing the perverse incentives created by the enhanced benefits are choking that recovery.

    Emergency measures should not continue one day after the emergency is over. To continue is to create a tool for bureaucrats to control the economy and choose winners and losers, with their traditional ham-handed incompetence.


    1. That’s the thing though. The emergency isn’t over in a lot of places. Many people are still choosing to stay home out of health fears or because they have to care for kids or family members. The piece even says there is a correlation between vaccination rates and returning to work.

      If a person feels they cannot safely return to work, cutting off their benefits is also “choosing winners and losers.”

      Liked by 3 people

    2. According to the article, the restaurant/hospitality sector accounts for 4% of wages. Plus almost all these business started up again at the same time and many of those former employees have gone on to other jobs like freelancing, Uber, delivery, etc.

      And, remarkably, low wage jobs showed the biggest growth, so UI enhancements are probably not an issue except for helping folks keep their homes and eat.

      And, like rssllchndlr stated, the pandemic is not over and service jobs can be threatening for many due to contact with the public at large.

      We’ll recover barring a Brazil-like variant and it will take time. Supply lines here and abroad are still backlogged and no amount of force will improve that quickly. Until then, people need shelter and food.

      Liked by 1 person

        1. True. The problem is that there a lot of pressures.

          Schools and daycares are not open yet so parents can’t leave home so readily. Factory jobs require skills that many don’t have without training. Hospitality and service are still not considered safe by many.

          We are just now opening up the country so expecting everyone to drop all other COVID related responsibilities and become available is a fantasy.

          And a Republican talking point to prove something. But the truth is that the extended UI is probably part of the issue for a small segment, but not THE problem. At the most it will all be over in September.

          Liked by 1 person

  2. From the source: “Further, as disappointing as last week’s report was, there is nothing in it that demands a reorientation of the general policy stance taken by the federal government.”

    There is nothing in it to justify the general policy stance, either. More precisely, the general policy stance might be foolish in its own right, despite anything a single jobs report says.

    EPI’s definition of a labor shortage is odd: “a large acceleration of wage growth.” Wage growth can occur as a consequence of a labor shortage, but other factors — especially labor productivity and market demand for labor’s end product — play significant roles, as well. In other words, the definition confuses cause and effect.

    This confusion, in turn, permeates EPI’s reasoning at every turn. For example, EPI first argues there is little evidence of wage growth, then that wage growth is evident “only at the sectoral level.” Unaddressed is any connection between wage rates and the number of jobs.

    All in all, EPI’s reasoning seems to be that UI benefits didn’t affect job growth in the restaurant industry because wages didn’t rise, but that wages rose in this sector because there was a shortage of available workers. This contradictory reasoning does little to illuminate the real effect of UI benefits on the industry.

    A simpler approach would be to assume that UI benefits affected the industry, then try to show how and how much.


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