Just over a year ago in march of 2020 unemployment in the US spiked to fifteen percent and as a fallout of the Coronavirus forced many businesses to close and many more to take drastic cost-cutting measures to survive the turbulent times that lay ahead. Today, thanks in part to government stimulus and a new acceptance of the status quo in the workplace, the figure has fallen to six percent, which is still higher than the 3.5 percent that was hovering around before the economy shut down. But it is obviously a massive improvement. In fact today, the USA is facing something completely different, in fact, a paradoxical problem. People are no longer struggling places to find to work, but workplaces instead are struggling to find people. Reports of massive labor shortages have compelled some of the nation’s largest employers to offer potential recruits fifty dollars just to show up for a job interview. What’s more, is that those same companies are having to offer higher salaries and career progression opportunities beyond the minimum wage they have typically paid to entry-level employees.
Why is there a Labor Shortage? Why are American Workers Becoming Harder to Find?
Why is it so hard to hire right now in 2021? The aim of every nation is to achieve ‘full employment, which does not necessarily mean that it is a state of zero unemployment, but somewhat near to that. But this responsibility of the federal government is sometimes at odds with another responsibility, which is maintaining low inflation. William Philips first found that there was a relationship between the unemployment rate and inflation. Notably, higher levels of employment, higher levels of inflation but it is not necessarily a strictly linear relationship. However at times, it may so happen that almost everyone who wants a job has a job and when an employer posts an ad for recruitment, nobody applies. In such cases, the employer then has to quote a higher salary or poach people from other workplaces. This is good in a certain sense that it allows the working pool of labor a bit more negotiating power. But even a gradual increase in the levels of income will lead to a gradual increase in the prices of goods and services which would lead to inflation.
Is the Pandemic the Root of all Evils?
The greatest problem of all is, unemployment is still almost twice a problem than what it was before the pandemic. There is an argument coming up from economists around the world today that the measures taken to battle the economic repercussions of the coronavirus were too generous. unemployment insurance combined with supplements of up to three hundred dollars per week compounded by multiple stimulus checks has meant that people are making more money by not working than what they would be making in the industries which are hurting.it is also considered that going to work includes hidden costs like paying for transport to and from the workplace, childcare, eating out more because there is no time to cook at home and other things which makes this decision a logical fiscal sense. This entire process effectively means that the non-accelerating inflation rate of unemployment can shift and does shift all the time.
The Bloomberg Business Weekly mentioned in May 2021 that the world economy had been suddenly running low on everything. It only makes sense that unemployment should be higher and the relentless obsession of governments to drive this figure to be as low as possible is actually driving it beyond where it should be in an actually functioning economy. But this seems to be a system that would render itself a solution in due time.
Conclusion:
As it was seen, millions of people in the pandemic were laid off within a very short time. In those months people had to find alternatives to support themselves. Fast forward to the present times when those businesses are reopening and looking to fill out their staff base all over again, only to find that all the people they let go have looked to other arrangements. So this would be an ideal time to capitalize on this opportunity because it is for the first time in a long time that the employers are fighting over the employees. Studies suggest that employees who stay with their companies for longer than two years get paid fifty percent less than their peers who are happier to hop jobs for a promotion. This process is made easier by being able to leverage the current labor crisis that the US is going through.
