On How the Government Is Not Helping to Solve Labour Shortages in Health Care and Other Places
A four-decade rise in prices and a labour shortage aren’t COVID-19’s fault. Instead, bad government policies, which were put in place to keep people safe from COVID-19, are to blame.
Instead of protecting people, government policies are doing more harm than good to public health and well-being, restricting the labour supply, and artificially increasing demand for goods and services. This is not what the government wants to happen.
During this pandemic, the United States doesn’t have a labour shortage as there has been before. This is the opposite of what people thought at the start of the epidemic. After the pandemic started, policymakers set up programmes that pay people more money if they don’t work than if they do. Then, 18 months after the pandemic started, they kept those programmes in place even though most businesses were open again.
If there had been no pandemic and no policymakers’ pandemic responses, I think there are between 4 million and 5 million fewer people working now than there would have been if there had not been.
Employers and consumers have had a hard time because there aren’t enough people to work, and the government has spent $6.6 trillion on pandemic-related and deficit-financed spending.
Businesses are having to pay more money to get people to work for them. Nearly half of all businesses raised pay in December, and 32 per cent plan to raise pay in the next three months.
Wages rise when workers become more productive. When employers have to pay more to do the same thing, that means they have to raise prices.
It also takes away from workers’ pay raises because prices go up Employees’ real wages have gone down by 1.7% over the last year, which means their bigger paychecks aren’t buying them as much as they used to.
Another thing that is making it hard for businesses and making their costs go up is when employees leave. Nearly one in three people will be out of work in 2021. That’s 47 million people. Between six and nine months of wages are lost when employers have to find new workers. This costs the customers even more money.
Instead of spending more federal money and making more changes to the labour market, policymakers should take down the barriers they’ve made to get a job.
That includes getting rid of welfare-without-work policies that started paying people more in unemployment benefits than they could earn from working. It also includes a lot more food stamps and ObamaCare benefits for people. As part of the plan, tax burdens that slow down wages and productivity gains like double taxes on investments can also be reduced or eliminated.
Policymakers should also let people do what they want to do instead of trying to force everyone into big unionised workplaces like the PRO Act. If the government wants to make more options for child care, they should let parents use their Head Start money at any provider they choose.