The COVID-Induced Worker Shortage: Will it Create Necessary Social Change?

Kayla Goodman-Weinbaum, Contributing Writer

When the COVID-19 pandemic began in March of 2020, the immediate fear of many workers was the prospect of becoming unemployed as a result of widespread shutdowns. In April 2020 alone, 20.5 million Americans lost their jobs. However, just a year and a half later, the script has flipped. In  August 2021 alone, a record 4.3 million people quit their jobs. That’s 2.9% of the entire workforce, up from 2.7% in July. For reference, that’s 242,000 more people who left their jobs within just one month. 

But why are so many people willing to quit their jobs? Surely they need to continue working to support themselves, right?

Correct. However, what has changed since March 2020 is that there is now a global worker shortage. This means that workers have more leverage than ever in seeking–and receiving– higher paying jobs and better working conditions. Or, as RSM chief economist, Joe Bruselas, put it, “the American worker is now confident that he or she has the bargaining power and can obtain a reasonable wage — and have influence over the shape of working conditions.”

In the short run, this phenomenon will continue to pose complications to the economy, contributing to rising prices, product shortages, and shipping delays. Will it be worth it in the long run? I believe that it will be.

This labor shortage could create positive, widespread change in the American workforce. With their newfound leverage, more workers could find themselves earning livable wages and having greater overall satisfaction in their careers. 

Amazon, a company infamous for the poor working conditions in its warehouses, has enacted some of the most dramatic changes amidst the labor shortage. Ahead of the holiday season, Amazon plans to hire 150,000 seasonal workers, offering an average hourly wage of $18 per hour and sign-on bonuses of up to $3000. In comparison, the federal minimum wage is just $7.25 per hour

The labor shortage is also linked to other crises, which, if the labor shortage becomes more dire, have the potential to be mitigated alongside it. 

As the country has cracked down on immigration, the employment shortage has only been exacerbated in areas that typically rely on immigrant labor. Bentonville, Arkansas’s rapid economic growth can be attributed to El Salvadorian, Mexican, and Indian immigrants who work in poultry production, trucking, construction and computer programming. The recent immigration decline has posed immense labor shortage problems in those industries. Chief policy officer for the U.S. Chamber of Commerce, Neil Bradley, explained that “for a whole host of communities all across the United States, immigration will determine whether the local economy will continue to grow for those moving there and the residents who have called that place home for decades.”

The immigration crisis, labor shortage and the current housing crisis across the country are all inextricably linked. Many job openings are in metropolitan areas, and many workers simply cannot afford the cost of housing in those regions. A comparison between San Francisco, California and Columbus, Ohio demonstrates the positive implications of affordable housing and how lack of affordable housing stunts job growth. In San Francisco, there is an abundance of available jobs, but workers cannot afford to live within commuting distance of them. In Columbus, however, affordable housing can be found within a reasonable distance of transit-accessible job hubs.

While it can be difficult to be optimistic amid the COVID-19 pandemic and increasing levels of social inequality, perhaps the current labor shortage will be a wake-up call to the government and businesses that supporting their workers and investing in affordable housing and immigration reform initiatives is in their own best interest.