Despite $9 trillion in fiscal and monetary stimulus from the federal government, America has an employment problem.
The Labor Department estimates that 10.4 million jobs remained unfilled in August, the most recent month for which figures are available, including 1.5 million in health care and social services. That same month, a record-high 4.3 million people quit their jobs.
The government reported that 3.1 million fewer people were working or seeking work last month than in February 2020, before the COVID-19 pandemic began.
While September saw employment increases in retail, hospitality, construction, and some other industries, employment in the health care sector continues to drop.
Hospital employment declined by 165,000 between February and May 2020. A year and a half later, with hospitals still facing pandemic-related strains, the sector has recovered fewer than half of those lost workers.
Nursing homes haven’t begun to reverse their staff losses, having shed 410,000 employees, or more than 12% of the industry workforce between February 2020 and September 2021.
The good news is that President Joe Biden has a plan.
The bad news is that his plan could result in the loss of millions of additional workers.
Start with vaccine mandates. The president announced in August that he planned to impose a vaccine mandate on nursing home staffs. Nursing homes lost nearly 38,000 staffers in September alone, among the steepest one-month drops since the pandemic began.
The Washington Post reported late last month that vaccine mandates imposed by hospitals have led many unvaccinated workers to leave or be terminated, exacerbating a shortage in skilled nursing and bedside care.
The potential employment effect of vaccine mandates is not confined to the health care sector. Other professions where vaccine requirements are common also reported job losses. In August alone, 25,000 state and local education workers quit their jobs. And the latest employment report shows that the education sector shed nearly 19,000 jobs in September, when most schools in the country had reopened.
There were 173,000 fewer school employees in September 2021 than in February 2020.
While that doesn’t prove that vaccine mandates are causing shortages of health and education workers, such mandates unarguably do nothing to alleviate them. When labor supply is tight, government policies should encourage people to return to work, not induce them to leave their jobs.
Biden is nevertheless doubling down on vaccine mandates. Last month, he directed the Occupational Safety and Health Administration to mandate that companies with at least 100 employees require their workers to be vaccinated or submit to weekly COVID-19 tests.
The agency sent the “emergency temporary standard” to the White House for review on Oct. 8, so its release could be imminent. The early indications are that such a mandate could be disruptive, creating confusion for employers and workers alike.
It also will impose a burden on the Occupational Safety and Health Administration. Legal challenges aside, it almost certainly lacks statutory authority to enforce such a mandate, and such enforcement could prove daunting.
The agency has a little more than 800 inspectors, while more than 164,000 firms employ at least 100 workers each.
“It would take 160 years for OSHA to get into every workplace just once,” Debbie Berkowitz, a former senior policy adviser at the agency, told NBC News. “It’s an understaffed, underresourced agency to begin with.”
It will rely on employer goodwill, Berkowitz said. Still, many companies remain perplexed about how to go about policing their workers’ health care, now that Washington has conscripted them as enforcement agents.
Lex Taylor, a Mississippi businessman who runs a group of Mississippi companies that make heavy industrial equipment such as forklifts and generators, told NBC that only 30% of his 1,300 employees are vaccinated, despite his company’s efforts to entice them with free vacation days.
Taylor said he can’t fire unvaccinated workers. “Logic dictates that’s irresponsible. That’s crazy,” he said.
But he also said he didn’t know how he could devise, implement, and finance a weekly testing program for hundreds of employees that would pass muster with federal bureaucrats.
The president’s forthcoming vaccine mandates aim to increase immunization rates. Vaccines are the most effective weapon against COVID-19, and vaccine rates are rising, albeit more slowly than government officials would like.
As of Oct. 12, the Centers for Disease Control and Prevention estimates that nearly two-thirds of Americans and more than 95% of seniors had received at least one dose. Driving those numbers higher is an important policy objective, but it’s not the only one.
With labor shortages, supply disruptions, and a depleted supply of medical personnel during a national public health emergency, the administration must weigh the benefits of resorting to coercion to marginally increase the number of vaccinated workers against the risk of driving more employees from their jobs.
Instead, the administration is inviting more of those adverse consequences by pushing its “Build Back Better” plan. The partisan $3.5 trillion bill, approved last month by the House Budget Committee, advances numerous job-killing policies.
University of Chicago economist Casey Mulligan found that the measure’s combination of work disincentives, labor market competition limits, employer mandates, and higher consumer prices for telecommunications, energy, and other products will reduce full-time employment by about 7 million jobs.
“The Build Back Better bill would implement the single largest, permanent increase in work disincentives since the income tax came into its own during World War II,” Mulligan said.
The U.S. faces a daunting array of economic challenges—inflation, supply disruptions, and worker shortages among them. Some of those are the direct result of the pandemic. Others are the result of the often frantic and poorly conceived government responses to it.
Extended lockdowns, school closures, and other restrictions created an economic shock. The government responded to that shock with an untested array of monetary and fiscal interventions that were enormous in scope and whose unintended consequences are only now becoming evident.
Labor shortages are among those consequences. The Biden administration should work to eliminate those shortages, not worsen them.
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