“Many, many people are realizing that the way things were prepandemic were not sustainable and not benefiting them,” Rachel Eager, 25, who previously worked at an after-school program in New York, told my colleague Ben Casselman.
Eager is now looking for a new job, but she is not in a rush. “My financial situation is OK, and I think that is 99 percent of the reason that I can be choosy about my job prospects,” she said. So far, she has not been willing to take another job with low pay, no benefits and little flexibility.
Her attitude is telling. The U.S. does not have a pure labor shortage so much as it has a shortage of workers willing to accept the working conditions that today’s economy often demands.
Paul Krugman, the Nobel Prize-winning economist and Times Opinion columnist, has described the trend as “the revolt of the American worker.” Betsey Stevenson, a University of Michigan professor, calls it the “take this job and shove it” economy.
There are also labor shortages in some other countries, probably related to their own large pandemic stimulus programs. But the situation seems to be most intense in the U.S.
A turning point?
The big uncertainty is what happens next.
One possibility is that we have entered a new era of tight labor markets. With more Americans choosing not to work — including aging baby boomers — companies would then need to increase pay and improve working conditions to attract employees. Some are already doing so, Ben Casselman notes: Hourly wages in the leisure-and-hospitality sector, for example, have surged this year.
In this scenario, the pandemic would represent a turning point. Almost a half-century of a low-wage economy would end, and incomes would grow more rapidly, as they did from the 1940s until the early ’70s.