In the last week, at least 18 states led by Republican governors have moved to terminate the enhanced federal unemployment benefits, which include an additional $300 per week, in President Biden’s $1.9 trillion coronavirus relief package in an effort to address the “labor shortage” and help businesses struggling to hire workers. While the evidence suggesting there is a true labor shortage is scant and mostly anecdotal – and the evidence that increased unemployment benefits are the cause even more so – the rhetoric from many small business owners, blaming the federal government for their supposed inability to find workers, has nonetheless exerted a powerful pull on Republican leaders who are eager to return unemployment benefits to their prior levels. Others, however, have suggested that the true problems are much deeper, and there are a growing number of articles arguing that the pandemic – and, indeed, the enhanced unemployment benefits – have, rather than created a labor shortage, occasioned a reassessment of work in America and provided low-wage, service-sector workers an opportunity to reflect on the working and living conditions offered by their employment. There is a growing body of research – beyond anecdotal – indicating that a substantial portion of unemployed workers have considered changing their field of work in the last year – particularly those working in restaurants or grocery stores. Moreover, many frontline workers remain concerned about the health and safety of themselves and their families and are struggling to make arrangements for their children while schools are closed.
Service workers, it seems, are leveraging the qualified bargaining power offered to them by the pandemic – and the lifeline offered by federal unemployment benefits – to demand better pay and working conditions. For that reason, many progressive writers and politicians have suggested that, rather than lament the apparent labor shortage and blame government benefits – which, despite their welcome increase, remain relatively meager – businesses should raise their wages if they want to attract more workers. Indeed, some powerful corporations, including Amazon, McDonald’s, and Walmart, have done so recently, raising their starting pay or offering bonuses to attract more workers, efforts that have, in many instances, borne fruit: Klavon’s Ice Cream Parlor in Pittsburgh, for example, raised its starting wage from $7.25 to $15 an hour, and the change, according to its general manager, was “instant, overnight,” and the shop received “thousands of applications.”
In other news, on Thursday, a new study released by the Economic Policy Institute argues that a decline in worker bargaining power, resulting from, according to the paper, “intentional policy decisions,” such as a tolerance for high unemployment, eagerness for international trade agreements, assault on labor unions, and creation of new legal work arrangements, have “generated wage suppression.” Worker productivity and pay rose together, in proportion, for decades, but wage growth stagnated more than 40 years ago, while productivity continued to grow, and the latter now rises six times faster than the former. These policy decisions, the authors argue, have decreased workers’ bargaining power relative to their employers and functioned to keep their wages low. The study is a marked rejection of much traditional economic thinking on the subject, which tends to blame technological advancement and globalization as factors that have led inevitably and inexorably to wage stagnation. It concludes by suggesting that the policy decisions which have created the trend can be reversed and that President Biden’s American Rescue Plan may be a useful first step.
Outside of Washington, as more than a dozen states and many large retailers, following the CDC’s updated recommendations, have relaxed or eliminated mask requirements, the presidents of two major teachers unions – the National Education Association and the American Federation of Teachers – have each called for a reopening of schools and a return to full in-person learning in the fall, pointing to the efficacy and widespread availability of vaccines as the crucial factor to a safe and prudent reopening. If local unions follow their lead, it could be a major step towards children returning to school and life returning to “normal” – or at least something resembling normal.
Finally, as hundreds of protests decrying the ongoing assault on Palestinians in Gaza occurred in cities throughout the country this weekend, some are calling for labor unions and leaders to stand firmly against the violence. The general secretary of the International Trade Union Confederation, for example, which is the largest labor alliance in the world, released a statement last week condemning the violence and the “unjust and illegal occupation” of Palestinian lands by Israel. American labor leaders, in contrast, have generally – with noteworthy exceptions – been supportive of Israel and critical of BDS, although there is also a notable history of locals speaking out and standing against the exploitation and violence directed at Palestinians. In any event, the issue remains live, and there are, to be sure, differing opinions on the subject.