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Facing the Post-Pandemic Challenges of Labor

As Labor Day 2021 rolls up on us, it’s an appropriate time to discuss the labor challenges facing businesses in the post-COVID-19 era. The Labor Day holiday historically pays tribute to the contributions and achievements of American workers and is traditionally observed on the first Monday each September. Created during the contentious and often violent labor movement at the end of the nineteenth century, Labor Day was designated a legal holiday by the U.S. Congress on June 28, 1894.

The health of American labor has been frequently affected by domestic and international economic factors for centuries. Frequent recessions and the historic Great Depression have scarred many generations of workers, and advances in technology have spawned significant shifts in the type of jobs needed in recent decades. It is certainly true to say that the pandemic of 2020 and the resurgence of a number of variants in 2021 has had the greatest impact on the labor markets since the Great Depression of the 1930s. As the economy began its comeback in early 2021, many erroneously believed that workers would return to the office and factory just as they left it a year earlier; just throw the switch back to the on-position, right? Predictions that a strong and steady surge of hiring would follow a wave of COVID-19 vaccinations have turned out to be overly optimistic. “It’s probably going to be a bumpy ride from here till September,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics.

Most employers will attest to the “bumpy ride”, but finding available jobs to fill is remarkably not the problem. Job growth in 2021 is on the rise by an average of 540,000 new opportunities for workers every month. Today, there are more than eight million job openings and 9.3 million people unemployed. Demand for employees by companies across the spectrum of industry and commerce is outperforming the availability of qualified talent. “I think we were all expecting that as things reopened, there would be a release of energy that would be very powerful,” said Carl R. Tannenbaum, the chief economist for Northern Trust. “But I also think we underestimated just how strong that would be. Industry after industry is finding themselves not completely prepared for what people want to do.”

The pandemic accelerated the need for technical skills as employers sent workers home and embraced remote working through digital meeting apps and other remote working technologies. As time progresses and employers attempt to retrieve workers from home offices and garages, many are providing retraining and offering continued reeducation opportunities to prepare existing employees for a new, post-pandemic normality in the workplace. A recent Deloitte study found that more than half of corporate leaders believe that “half of their workers will need to be reskilled over the next three years.”

Many of the nation’s largest employers had previously planned on returning employees to the pre-pandemic campus by this Labor Day, but are now hesitating and delaying the migration due to the virility and frequency of a COVID-19 variant. Google CEO Sundar Pichai has announced that even though “we are welcoming back tens of thousands of Googlers on a voluntary basis,” the company is extending its voluntary return to work policy until at least January 10th, 2022.

The irony of too many jobs and too few available workers is causing more than a little consternation among businesses and managers, particularly small- to mid-size businesses. After the easing of restrictive rules, which limited restaurants, hospitality and brick and mortar retailers to a percentage of full capacities, many restaurants and merchants looked forward to a time of recovery and healing only to realize a shortage of available staff to meet consumer demand for service. The result offers little in the way of recovery. Having to turn customers away because you lack the employees necessary to fill the demand goes against the very nature of every business professional and threatens the continued survival of thousands of small businesses across America.

Currently employed workers are realizing opportunities to negotiate increased compensation and benefits from companies who are interested in maintaining a stable workforce, particularly for those skilled jobs most in demand. It is clearly a marketplace that favors the worker’s interests. Complicating the situation, many of the unemployed are receiving significant federal and state pandemic-induced subsidies to the usual out-of-work compensation benefits. While some labor experts are playing down the lucrative benefits as a cause for the shortage of qualified workers, the additional benefits are a clear disincentive for many qualified job candidates to reenter the workforce.

Moving forward to a new economy and a return to normalcy will continue to require diligent efforts to seek solutions to the myriad of implications brought on by COVID-19. Perhaps the most appropriate message this Labor Day: It’s time to get back to work America!