Is there a labor shortage?

Abstract

A panel discusses ongoing and prospective developments in the US labor market. Michael Horrigan points out that job losses in the COVID recession were heavily concentrated among women, minorities, and less-educated workers. In turn, these groups have shown less progress regaining jobs, and many have left the labor force. Horrigan shows that the industry connection between vacancies and wage increases is not at all tight, suggesting that traditional explanations that labor shortages are a matter of wages not clearing the market needs to be modified. Misty Heggeness notes that much of the weakness in women's recent labor force participation has been by working mothers, but that their behavior has not been radically different than in the past. Policies that address the concerns of working mothers could lessen the possibility of swings like those recently seen. Kate Bahn expands to discuss more specific such policies, including paid leave, paid sick leave, more predictable work schedules, greater income support, as well as a revival of unions, as means to not only alleviate hardship, but also to increase labor market efficiency. Michael Strain contends that federal policy greatly enhanced consumer demand, but the income support programs, along with other problems, have restricted supply, leading to some of the distortions observed in the labor market. While he supports some of the policies proposed by other panelists, he is leery about the effects of specific government programs that have been offered.