Many employers in Massachusetts and across the country are hurting for help. Help wanted signs are canvasing the Cape and Islands, and in Salem, a cash incentive is being offered by the city to anyone who takes a service industry job. The labor loss is being referred to as a “Great Resignation.” Bob Triest, professor of economics at Northeastern University and former vice president and economist at the Federal Reserve Bank, joined Mary Blake on GBH’s Morning Edition to discuss.
Mary Blake: This labor shortage — why is that a bad thing?
Bob Triest: It's a bad thing for businesses struggling to find workers. And I really feel for small businesses that are finding that it's hard to attract workers at the wages that they're used to offering those workers. On the other hand, for workers, it's a very good thing. So now the workers are in demand — businesses are competing for the services. That gives workers the opportunity to hop from one job to another in search of jobs that are a better match for them, or might offer better wages or benefits or working conditions. So, from the workers standpoint, it's actually a very good thing.
Blake: Are you surprised by what has happened here? Do you feel that the “Great Resignation” was something that we should have all seen coming post pandemic?
Triest: I think so to some degree. And that's because we know that there are supply bottlenecks, including supply of workers for jobs. And so, as the labor market tightens due to that, there are a lot of opportunities for workers to job-hop. We see quit rates, as measured by the job openings and labor turnover survey of the Bureau of Labor Statistics, up across the board in different industries, especially high, as one might expect, in industries related to tourism and things like leisure and hospitality. And actually, just before the recession, the dotcom bust quit rates were about where they are now in those industries. So, this is not an unprecedented move at all.
"From the workers standpoint, it's actually a very good thing."-Bob Triest
Blake: There has also been an awful lot of talk with the help from the government and people coming back that people are just looking at these unemployment checks and they're really not bothering to do anything about getting a job or a new job until after the money runs out. Then there's also evidence to say maybe that's not the case.
Triest: Early in the pandemic there's pretty good evidence that that was not the driving force behind unemployment and people leaving the labor force. Those bonuses will run out in September. And so, there'll be some evidence then.
Blake: Will businesses fail? As you said, you feel sorry for these smaller businesses. Some are hanging on by a thread and are looking at — OK, can I afford to pay two dollars more an hour? Is that going to break my business to try to keep people?
Triest: In some cases it probably will, although it's important to remember that the businesses are essentially all in the same boat. They're all facing these cost pressures and wage pressures. So, what will likely happen is that businesses will be raising wages and better conditions to attract workers. That'll put pressure on their costs. They probably will be increasing prices in many cases to maintain profitability. As prices go up that will cause a reduction in the quantity demanded of their services. And their markets may shrink a little bit
Blake: In terms of the “Great Resignation,” do you feel overall that we will be in better shape with the retraining that everybody talks about? Does this, in fact, happen? Are we moving in a different direction in terms of looking at past history?
Triest: A lot of training is working on the job. The job-hopping we're seeing now is providing opportunities for workers to leave one job, start another or receive some training on the job and gain experience perhaps in a new sector. And that is something that economists think would have lasting benefits.
