Pitchfork Economics with Nick Hanauer
What labor shortage? (with Heidi Shierholz)
Sep 5, 2023
EPI President, Heidi Shierholz, discusses the wage shortage disguised as a labor shortage. Raising wages in industries like restaurants proves effective. The negative consequences of reducing unemployment benefits are explored. Potential lasting changes to the labor market and the impact of unemployment insurance on labor shortages are examined.
30:41
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Quick takeaways
- The so-called 'labor shortage' is actually a wage shortage, and the solution is to pay people more.
- Raising wages in the leisure and hospitality sector has been effective in attracting workers and is necessary for fair compensation.
Deep dives
Labor shortage narrative is exaggerated
The podcast episode discusses the common narrative of a labor shortage and challenges its validity. While employers often complain about not being able to find workers, the episode argues that the current labor shortage claims are exaggerated. The data show that labor shortages are limited to isolated sectors, with the most affected being leisure and hospitality. This is evidenced by the accelerating wage growth in the sector. The episode emphasizes that the wage growth is necessary to attract workers and is not unreasonably high. Overall, the episode debunks the notion that unemployment benefits are the primary cause of the labor shortage.
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