Is there a wage and benefits shortage in California?
Some economists are starting to say there is not a labor shortage, but a shortage of good jobs. Sylvia Allegretto, a UC Berkeley labor economist, said what the nation is really experiencing is a wage and benefits shortage.  The U.S. Labor Department is reporting its highest number of advertised job openings in 20 years of data. But, businesses across the nation are reporting large numbers of potential workers turning them down. While enhanced unemployment benefits have been blamed for workers not taking jobs, many workers laid off during the pandemic say they dont want to go back to low-wage work with no benefits. Austin Neudecker, Weave Growth  YES: The unemployment rate is high compared to the past eight years, yet declining. The remarkably quick recovery seems to be slowing down. When workers are questioned, the rationale seems to make sense: why go back to a role where I felt undervalued if I can receive a substantial subsidy while I seek a better role. Unsurprisingly, the industries at the top of the list are leisure and hospitality, which rely on sub-minimum wage workers dependent on tips. We must end the arcane practice of tip-dependent employment. James Hamilton, UC San Diego  YES: Were seeing a strong labor market now in which employers can find it hard to find qualified workers. Thats a situation in which both wages and benefits tend to get bid up, though businesses are often reluctant to recognize that thats where the situation is heading. I expect that many workers will be offered higher wages and better benefits by the end of the year. Chris Van Gorder, Scripps Health  NO: There are clearly excellent jobs available in California with top wages and benefits, coupled with some of the richest state-government mandated benefits (e.g. leave benefits) paid for by employers. This is much more complex than just a wage and benefits shortage. There are myriad reasons people may not be coming back to work, including lingering health concerns, transportation and child care challenges, and enhanced unemployment benefits and rent relief initiatives that reduce the urgency of finding a job. Norm Miller, University of San Diego  Advertisement  YES: This is not a new problem, nor is it that simple. We have had a structural mismatch of skills versus jobs. We crank out communication and social media majors when we need engineers and machine learning programmers. Add to this, workers retrospectively evaluating whether they wish to work at the office and other work policies, and it is no wonder we have so many openings that no one wants to or has the skills to fill. Jamie Moraga, IntelliSolutions  NO: There isnt a shortage of good jobs in California. Its difficult to recruit and retain qualified salaried workers for high paying jobs. Some workers can now be more selective as more companies around the country can recruit locally by offering remote work opportunities, which can put local or small businesses at a disadvantage. Worker shortage can also be attributed to additional federal and state unemployment benefits, continued health care concerns, population decline, and child care/elder care needs. Some workers have also taken the opportunity during the pandemic to make career and lifestyle changes, retirement decisions, or decided to move out of state. David Ely, San Diego State University  Advertisement  NO: Employment fell by 22 million jobs at the onset of the pandemic. The labor market will need several years to fully adjust to such a huge disruption; thus, short-term imbalances in some sectors have to be expected. Transitory factors, including health concerns, child care needs, and supplemental unemployment insurance payments are likely contributing to the slow return of workers. There have been recent meaningful increases in employment, including in the leisure and hospitality sector. Ray Major, SANDAG  NO: The unprecedented stimulus payments from the state and federal government give employees the option to be pickier about the type of jobs they will accept, and subsidies have made it difficult to fill lower paying jobs. Of course, everyone wants a higher paying job with benefits, and its easy to hold out as long as the stimulus payments continue. Once the subsidies stop, these jobs will be filled. Reginald Jones, Jacobs Center for Neighborhood Innovation  Advertisement  YES: There is a wage and benefits shortage. Its not the only issue. The unemployment subsidy disincentivized workers returning. However, before the pandemic good paying sectors  construction, manufacturing, and tech  reported a skilled worker shortage. Education and training are deficient. On the 2019 Nations Report Card, only 22 percent of high school seniors were proficient in science and 24 percent in math. Couple this with a shrinking labor force, and skilled labor supply may be more the concern. Lynn Reaser, Point Loma Nazarene University  NO: Companies now face problems filling jobs across a wide range of pay levels, extending from dishwashers to software engineers. The demand surge from restaurants and entertainment venues has encountered a more muted response from potential employees. Child care, government assistance, the transition to other occupations, and return to home countries have all limited the candidate pool. Businesses are raising wages and offering hiring bonuses, but ultimately compensation needs to be justified by employee skill levels and productivity. Kelly Cunningham, San Diego Institute for Economic Research  Advertisement  YES: More of an incentive shortage, particularly as lower wage jobs do not pay as much with generous supplemental unemployment compensation adding $300 a week on top of state unemployment benefits. Given the additional costs of commuting and child care, and ongoing rent moratorium, incentives for returning to lower wage jobs are not compelling to many. Labor shortages will likely dissipate once unemployment benefits expire, but better paying jobs will probably already be filled by that time. Phil Blair, Manpower  NO: For job seekers that have prepared themselves for the jobs of the future, acknowledging the importance of technology and change there are thousands of high paying jobs and great benefits available to them. These job seekers have worked hard to educate and train themselves, and continue to learn the newest in demand skills. They are willing to move their career among different companies and different industries. Job seekers who are complacent in their skill sets and are not flexible in learning new skills will continue to struggle with the thousands of others like themselves who are lining up for the same old dead end jobs. Yes it is uncomfortable learning new skills and changing careers. But each employee needs to make it happen for themselves and for their families. Gary London, London Moeder Advisors  Advertisement  YES: This is not a labor shortage. It is a wage shortage, and will be solved over time through higher salaries, better education and, in San Diego, expedited daily border crossing for Mexicans working in the much impacted hospitality sector. Note also that higher income professions have fared far better. Economic recovery and labor participation is tethered to high, non-age restricted vaccination rates, which will put children back in school and enable child care. Alan Gin, University of San Diego  YES: California is not alone in having a shortage of good jobs. The loss of manufacturing jobs since the late 1990s has eliminated a lot of high paying jobs with benefits, and technology has eliminated more in other sectors. The income distribution in California and elsewhere is increasingly barbell/pear shaped, with some people in the high paying tech and finance sectors and many in lower paying service industries. Californias higher minimum wage helps those at the bottom but is offset by the states higher living costs. Bob Rauch, R.A. Rauch & Associates  Advertisement  NO: There isnt a wage and benefit shortage as those who want a career can climb the ladder and advance to significant earnings at their own pace. Those who prefer a job with health, dental and vision benefits can get one. We have a shortage of willing workers due to unemployment bonuses. This was proven by states eliminating the foolish bonus. Additionally, we need more work visas to balance supply and demand. Email me at phillip.molnar@sduniontribune.com. Follow me on Twitter: @PhillipMolnar