A labor shortage is crippling businesses locally and nationally and growing worse by the month, and, while a host of factors are part of the equation, government benefits that are too generous and last too long are a big part of the problem.
At least that’s the assessment of a range of labor experts and businesspeople as the numbers take hold. And it’s not just threatening businesses but the delivery of consumer goods and services which are critical to the quality of daily life. 
For example, the labor shortage could produce a major gas shortage this summer if trucking companies can’t hire the labor they need to transport fuel. It could also spark food shortages for the same reasons.
As The Lakeland Times reported recently, “Help Wanted” signs in the Northwoods sprouted like weeds as the tourist season approached this spring, with worker shortages in industries ranging from lumber to restaurants to auto shops.
But it’s not just the Northwoods, and things could get worse — a whole lot worse — before they get better. The numbers speak for themselves. For example, as the economy rebounds after pandemic lockdowns, job openings have outstripped job applicants, even though there are millions of available workers.
According to the Bureau of Labor Statistics, the unemployment rate is in the neighborhood of 6%, and 9.7 million Americans say they are actively looking for work. That number is rapidly trending downward, though — it was more than 10 million in January — as job openings trend upward, and, when skill mismatches and seasonal fluctuations are accounted for, there just aren’t enough workers to go around in some critical sectors.
In the restaurant industry, for instance, restaurants added 175,600 jobs in March, the third consecutive monthly employment increase, which lifted restaurant staffing levels to their highest point during the pandemic, according to the National Restaurant Association (NRA). Still, the NRA reported, eating and drinking place employment remained at 1.8 million jobs, or 15%, below pre-pandemic levels. Some 37% of restaurant companies reported having trouble hiring employees in a recent Census Bureau Pulse Survey.
It’s not just restaurants but an epidemic pounding most of America’s Main Streets. In its March report, one of the largest small business associations, the National Federation of Independent Business, reported 42% of owners cited job openings that could not be filled, what it called a record high reading. 
“Owners continue to have difficulty finding qualified workers to fill jobs as they compete with increased unemployment benefits and the pandemic keeping some workers out of the labor force,” the report states. That was true even as a net 28% of owners reported raising compensation.
Skilled trades are taking a hit, too. In March, the human resource firm TrueBlue, Inc., found the number of skilled trade jobs in the U.S. was far outpacing the supply of qualified workers to fill them. Citing an analysis by the skilled trades division of PeopleReady, TrueBlue reported the most in-demand skilled trade jobs were remaining unfilled the longest: roughly a month on average.
“The skilled trades are in dire need of workers right now, with a particularly high demand for apprentice-level and skilled labor positions,” said Jill Quinn, executive leader of PeopleReady Skilled Trades. “These are steady, well-paying jobs that hold a bright future, even in an unpredictable economic climate.”
To cite just a few examples, as of the report in mid-March, job postings for lumber apprentices increased by 24% in the previous month, and jobs were unfilled for an average of 29 days. For roofer apprentices, the postings increased by 50% and went unfilled for 39 days; for carpenter helpers, 12% and 28 days; for construction workers, 17% and 27 days.

Need gas? Got workers?
Again, the threat posed by the lack of workers to meet even pre-pandemic demand is not just jeopardizing small business survival but could severely impact American consumers, and not just those wanting reasonable table service in a restaurant.
As CNN reported, surveys show millions of pent-up people craving to go somewhere could take to the road this summer only to find a nasty surprise: No gas. And it’s not the gas that’s in short supply but the tanker truck drivers needed to get the gas to the pumps.
According to the National Tank Truck Carriers (NTTC), trucking’s driver shortage already exceeded 50,000 drivers, and many more left when the pandemic lockdowns struck. The industry says it was also facing shortages of dispatchers, back office staff, trained mechanics, registered inspectors, and design-certified engineers.
Then the pandemic happened, and, as Ryan Streblow, the executive vice president of the NTTC, told CNN’s Chris Isadore, it metastasized the problem. CNN cited NTTC data that somewhere between 20% to 25% of tank trucks in the fleet were parked heading into this summer compared to only 10% in 2019.

Why the shortages?
The question is, the economy is rebounding, demand is growing in virtually all economic sectors, and jobs are being created, so why are labor shortages even a thing?
Many say government benefits — too many of them overall and too many lasting too long — are disincentivizing work. That is to say, the government is in effect paying people not to work.
More on that later, but first, it’s important to point out there was a growing labor shortage before the pandemic, for varying reasons and some of them industry specific.
In the construction industry, for example, industry leaders traced much of the depletion of the work force to a decline in apprenticeship programs, with less than 1% of the total manufacturing work force getting formal advanced training in the form of apprenticeships.
In addition, many schools eliminated shop class, which experts say was a pipeline to the skilled trades. That aligned perfectly with increasingly negative attitudes millennials have toward skilled trades work, and the result was a sharp drop in the available labor pool even before the pandemic.
More broadly, retiring baby boomers — of which there are many, with 10,000 boomers reaching the age of 65 every day — are not being replaced with enough younger people because the boomer population numbers were so high.
Early last year, the Conference Board, a member-driven nonpartisan think tank founded in 1916, released a pre-pandemic report which touched on six factors the board thought was responsible for what it called a growing labor shortage more critical and different than previous labor shortages.
For one thing, they, too, observed working-age population growth was slowing to a halt.
“The massive retirement of the large baby boomer generation is bringing growth in the working-age population to a halt — a trend that will continue through 2030,” the report states. “This is the main reason why this era of shortages is so different. Never before have such a large number of retirements and almost zero growth in the working-age population happened.”
Then, too, the working-age population of non-college graduates was shrinking, and labor force participation was increasing but not by enough.
“But the improvement has not been remotely fast enough to prevent the labor market from tightening and has been somewhat disappointing, especially for men, and especially compared to other advanced economies in the last decade,” the report stated.
In addition, the report cited a large increase in disability rates.
Finally, the report stated, compared with earlier decades, young men without a college degree are less likely to be in the labor force — “because they are much more likely to be single, living with their parents, and have less of a need to earn income” — while there was a large drop in labor force participation of 16-24 year olds, significantly reducing the supply of workers in occupations that typically hire young and less-educated workers.

It’s raining dollar bills
All that said, many experts believe the shower of government benefits which rained down from Washington in the aftermath of economic closures last year took a bad situation and has turned it into a crisis.
The beef is not so much with temporary relief for workers thrown out of work through no fault of their own, or with forgiven loans to help small businesses survive, but with what these experts say were benefits poorly targeted and too generous to begin with, and now, under the Biden administration, seem poised to last far longer than needed, some of them forever.
Expanded unemployment benefits are Exhibit A. At the beginning of the pandemic, when government-mandated lockdowns shut down the economy, Congress and then President Donald Trump approved additional unemployment benefits of $600 a week, on top of the states’ maximums. In Wisconsin, the maximum was $370 a week, which the federal benefit boosted to $970 a week.
The $600 federal benefit expired last July, but in December $300 in additional federal unemployment aid was approved, allowing the unemployed to collect up to $670 in benefits.
The bottom line is, many workers were making more with unemployment under the COVID-19 unemployment aid than they were at work — a disincentive to work. As The Times reported last month, economists at the University of Chicago used government data from 2019 to estimate two-thirds of unemployed workers who could receive benefits were eligible for payments greater than they made at work.
Then along came President Joe Biden and signed the American Rescue Plan, which extends expanded federal unemployment aid all the way into September. Those eligible will receive federal benefit payments of $300 per week in addition to state payments through Sept. 6; plus, the first $10,200 of unemployment benefits received in 2020 will be exempt from tax for households making $150,000 or less.
But there’s more, a whole array of what many believe to be disincentives to work — new stimulus checks of $1,400 per person in addition to the $600 passed in December, which was on top of the initial round of stimulus checks of $1,200 to every eligible American. 
There is also an expanded child tax credit. Previously, the amount was $2,000, but the credit has increased to $3,000 per child, or $3,600 for a child under six. It also allows 17-year-old children to qualify for the first time. The credit will be paid in monthly installments beginning in July.
Then there’s rent relief. The federal government is doling out $46 billion, which is making its way to 8.8 million people, per data from the Americans Consumer Financial Protection Bureau, while a federal eviction moratorium is scheduled to last through the end of June. The Urban Institute estimates that renters owe a total accumulated back rent of between $13.2 billion and $52.6 billion, so the federal checks will likely wipe out most if not all of that debt.
Utility relief is on the way, too. More than $21 million in federal funding will be used to assist in paying overdue utility bills in Wisconsin, Gov. Tony Evers said last week. The money will help more than 36,000 utility customers pay their overdue utility bills.
“We’re working every day to ensure families, our state, and our economy can bounce back from this pandemic, and part of that is making sure households across the state can keep their lights on and their utilities running,” Evers said.

No need to work
The question is, is all the relief necessary, that is to ask, are the checks incentivizing people not to work because the government is paying their bills?
The anecdotal evidence suggests there’s at least a strong partial link between the two.
Jim Grundy, the owner and CEO of Sisu Energy LLC, a transportation optimization company in Texas whose biggest customers are in the oil and gas industry, says expanded unemployment benefits have definitely played a role.
For starters, Grundy has been offering pay of $12,000 a week and says he still can’t find enough drivers. He says subsidizing employment via expanded benefits hurts businesses because, in some cases, the benefits were substantially higher or at least comparable to what the workers were making.
“And that situation is still evident today,” Grundy told The Lakeland Times this week. “At Sisu Energy, we tried calling potential candidates that had applied prior to the benefits, and 95% of them preferred to stay on unemployment versus coming to work or even interviewing. That’s not the concept of unemployment, and the amount of benefit very much enabled that kind of behavior. … It definitely didn’t help businesses. It enabled some folks to be incredibly lazy and not come to work.”
Bill Dunkelberg, the chief economist for the NFIB, also pointed to generous unemployment benefits as part of the reason for the worker shortage.
“Main Street is doing better as state and local restrictions are eased, but finding qualified labor is a critical issue for small businesses nationwide,” Dunkelberg said. “Small business owners are competing with the pandemic and increased unemployment benefits that are keeping some workers out of the labor force. However, owners remain determined to hire workers and grow their business.”
Beyond the first-hand observations, there is broad data that backs up the proposition. First, there is research by Ioana Marinescu, an assistant professor at the University of Pennsylvania School of Social Policy & Practice, and colleagues that showed that during the pandemic, at least during the time of the study, from March to July 2020 (during the time that workers began receiving $600 in additional federal unemployment benefits), a 10% increase in unemployment benefits caused a 3.6% decline in applications at the local labor market level.
To be sure, Marinescu argues, the higher unemployment benefits did not hinder U.S. labor market recovery at the start of the pandemic because, she wrote, while benefits caused a decrease in job applications, they did not affect job creation. 
“First, applications-per-vacancy were higher during the COVID-19 crisis than before,” the report stated, observing job vacancies decreased by 64% during the crisis, while job applications decreased by 21%.
In other words, the more generous benefits did cause a drop in people looking for work, it’s just the number of jobs available fell faster than the number of job seekers. 
But the situation is different now — expanded benefits which serve as disincentives are still in place while the economy, and jobs, roar back to life. As of March 21, online job openings were 45% higher than they were pre-pandemic, according to an analysis by the job site ZipRecruiter. At the same time, labor force participation was flatlining at about 61.5%, down from 63.5% just before the pandemic.
That’s a prescription for a worker shortage.
Notably, the sag in the labor force participation rate began in March 2020, just about the time expanded unemployment benefits were put in place, and critics of expanded benefits argue that they won’t recover until the benefits end.
Recently Daniel Zhao, a senior economist and data scientist at Glassdoor, picked up on the point. 
“An unusual trend has sprouted up in the labor market in the last few weeks: Google Trends data shows job search activity has dropped dramatically since March 1, falling -15% and settling at -10% now,” Zhao wrote on Twitter on April 7. “Why is labor supply dropping even as vaccine distribution accelerates?”
Zhao offered three reasons that might be the case — surging COVID-19 cases were driving another pullback in economic activity, an hypothesis he deemed unlikely; furloughed workers were driving search activity before and aggregate search intensity is dropping as they’re rehired, which he called speculative; and more generous unemployment benefits were reducing job search intensity, which he called a “strong hypothesis.”
One reason it is strong is that, by March, it was known the Biden administration would extend unemployment benefits for almost six more months. In addition, in February the administration released a new rule allowing people to turn down job offers out of fear for their safety and still qualify for benefits.
The fear among many business leaders is the Biden administration is moving with such benefits to create, as The Wall Street Journal put it last week, a cradle-to-grave government. On the heels of the $1.9 trillion COVID-19 relief bill is the $2 trillion infrastructure bill and, more important to this analysis, the $1.8 trillion American Families Plan.
The latter plan reshapes the American landscape. A permanent new preschool entitlement, free community college, permanently expanded ObamaCare subsidies for affluent families, a new paid family leave entitlement — all of these are the contours of a vast web of disincentives to work that are already taking shape, and already having an obvious impact.
Richard Moore is the author of the forthcoming “Storyfinding: From the Journey to the Story” and can be reached at richardmoorebooks.com.