Industries continue to face labor shortages; When will economy bounce back?

KNWA

FAYETTEVILLE, Ark. (KNWA/KFTA) – The pandemic continues to impact the economy. One major concern surrounds a shortage of workers. The shortage is causing disruptions in production and supply chains across the region.

Local Economist, Jeff Cooperstein says there is still a lot of uncertainty when it comes to the economy, and it is hard to tell when the labor market will be back in full swing.

He says there are several reasons people are not rejoining the workforce; fear of getting sick, being more selective, childcare issues to name a few. He adds unemployment benefits also gave some families extra cushion to delay getting back to work.

“Some people got new credentials and are back in schools. Some people took the pandemic to reflect on their lives and what they are doing,” said Cooperstein.

Another issue is pay and several industries are significantly increasing wages to attract workers.

“People who are getting paid $15 dollars an hour instead of 11… they are going to take most of that money and it will be circulated back into the economy. They are going to spend and that is going to help drive other economic growth,” said Cooperstein.

On another note, Cooperstein says some industries will find ways to be productive without the extra hands. That could mean investing in more technology, tablets and computers to fill the gaps.

Migrant workers could also be a solution to the shortage. Now, Arkansas is home to countless immigrants and refugees. Many make a home here, contribute to their communities, work and have a positive impact on the economy.

Cooperstein says the number of refugees that come to the U.S. every year isn’t statistically significant enough to really impact the labor force.

He says, more importantly, it’s about taking a look at the immigration policies in the U.S, with respect to the labor market.

“Are we going to have worker programs where we actively encourage foreign workers into the United States to help in industries where we have worker shortages. Is that going to be a short-term policy or a long-term policy,” said Cooperstein.

He adds that the birth rate versus the death rate is also pretty tight in the U.S. Cooperstein says a growing population is also important to the labor force and immigrants can help in that department as well.

In general, Cooperstein says that most of the labor shortage is pandemic related. He says the better the country, as a whole, is able to deal with the pandemic the quicker we can expect the economy to recover.

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