Workers do not want to return to their old jobs – 08/24/2021 – Paul Krugman

The pandemic has turned the professional lives of many Americans upside down. Some of us, usually highly educated white people with relatively well-paying jobs, were able to telecommute. Millions of other workers, especially many low-wage service workers, simply saw their jobs disappear when consumers stopped eating out and traveling.

Now the economy is recovering – a recovery that is expected to continue despite the spread of the delta variant of the coronavirus. But a lot of Americans don’t want to go back to the way things used to be. After 18 months of telecommuting, many people no longer want to deal with the stress of the daily commute between home and work. And at least some of the people who have been forced to accept unemployment have realized how unhappy they are with their low-paying jobs and precarious working conditions, and are reluctant to return to their previous jobs.

To be honest, when companies started complaining about labor shortages, I was skeptical. This kind of grievance always arises when the economy begins to recover from a downturn, and it often just means that job seekers are now a little less desperate. Some of us still remember that seven or eight years ago Very Serious People insisted that we were facing a huge “skills shortage” and that we would never be able to bring unemployment back to the bottom. levels that prevailed before the crisis. (“Spoiler”: that’s exactly what we did.)

At this point, however, it seems clear that something is really going on. The data on open jobs shows that there are many more vacancies than one would normally expect given the current level of unemployment, which remains relatively high.

It is also a notable situation if we consider what is happening in the sector most affected by the pandemic, leisure and hospitality (hotels, restaurants).

Employment in the sector remains well below the level it had before the pandemic; but to bring back the workers, the industry had to offer big wage increases, bringing them to values ​​well above the trend prevailing before the pandemic.

In other words, some workers don’t seem really willing to return to their old jobs unless they are offered a lot more money and / or better working conditions. But why is this happening? And should we see the trend as bad?

The Conservatives insist that this is indeed bad: workers, they claim, refuse to take jobs because government assistance makes unemployment too comfortable for them. But they would always say that, right? Remember, it was the same thing they said after the financial crisis, claiming the unemployed were spoiled – when the real reason the recovery took longer than it should have was the destructive austerity policy imposed by Republicans in Congress.

However, the reasons for concern about the incentive effects of unemployment benefits seem more compelling today than in the past. Aid to the unemployed was much more generous during the pandemic than during the Great Recession; the supplement of $ 300 per week to existing unemployment benefits, approved in December and extended in March, although lower than the $ 600 per week in effect for part of 2020, is sufficient, when combined with regular benefits, to replace most of the normal income. of lower paid workers.

But have unemployment benefits really had a significant negative effect on employment? State-based employment figures released on Friday support findings from previous studies which found a small negative effect.

This time, Republicans have inadvertently provided the data necessary to disprove what they claim. Many conservative-regime states have rushed to cancel extended unemployment benefits before September, when they would expire. If these benefits were a major blocking force on job creation, these states would have seen significantly faster job growth than the Democratic states, which retained the benefits. This does not happen.

But if government benefits weren’t responsible, what explains the reluctance of some workers to return to their old jobs? There may be several factors. Fear of the virus has not gone away and may lead some workers to choose to stay at home. Caring for children is also a problem, as many schools remain closed and childcare services have yet to recover.

I suppose, however – and this is only a hunch, although some of the most well-known experts in the field hold similar views – that, as I stated at the start of this article, the mess of work created by the pandemic was a learning experience. Many people lucky enough to be able to work from home realized how much they hated going home to work every day; some people who worked in the leisure and hospitality industry realized, during their months of enforced inactivity, how much they hated their old job.

And the workers seem willing to pay the price to avoid reverting to what they used to be. This, by the way, may be particularly true for older workers, some of whom have withdrawn from the workforce.

As this is the story behind the recent ‘labor shortage’, what we are seeing is good, not a problem. Perversely, the pandemic may have given many Americans a chance to figure out what really matters to them – and the money that was being paid to do crippling jobs, some of them now realize, was not. not enough.

Translation of Paulo Migliacci

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