From fast-food restaurants to manufacturing companies, employers across the country are struggling to fill positions once vacated due to the COVID-19 related shutdown. 

Return-to-work hiring slowed sharply in August, and the labor force is still 2.9 million members fewer than it was in February 2020. Despite the fact that a record high of 10.9-million jobs remain unfilled, according to the Bureau of Labor Statistics, 8.4 million work-aged people are unemployed.

While mainstream opinions tend to focus on how the labor shortage is impacting the economy as an entity, speaking in terms of GDP and market projections, experts on Catholic economic thought are expressing their concerns about the employment crisis in terms of its impact on human persons.

“Human flourishing requires participation in the communities you live in,” said Charles Clark, senior fellow at St. John University’s Vincentian Center for Church and Society and professor of economics. While not the only form of communal involvement or labor, Clark says “paid work is an important part of participating in our society.”

Catholic social teaching scholar Michael Naughton agrees, describing work as “a deeply human reality.” He adds that work allows people to exercise their God-given gifts in order to “contribute to the good of society and become the persons we were created to be.” 

 

“Institutional Poverty”

Naughton, who directs the Center for Catholic Studies at the University of St. Thomas, says that beyond the negative impact the labor shortage is having on organizations’ productivity — which is affecting everything from the global supply chain to significant drops in profit — it is also fostering a form of “institutional poverty.” Not engaging in the workforce cuts off a significant source of belonging and participation for many, especially those who don’t have strong ties to other institutions, like family or church.

In this sense, the pandemic-induced labor shortage is exacerbating what was already a steady trend of declining institutional participation — especially among men. 

In his 2016 book Men Without Work, Catholic political economist Nicholas Eberstadt described the already dwindling rates of male participation in the workforce as “America’s invisible crisis.” Relatedly, in a September article entitled “A Generation of Men Give Up on College,” The Wall Street Journal reports men currently lag behind women in college enrollment at record levels.

Naughton points to one especially disturbing outcome at least partially connected to the decline in institutional participation: rising levels of suicide, especially among middle-aged men. 

“We are social by nature — institutional animals — and when we break away from our nature and our institutions, we pay a significant price,” said Naughton, who sees the current labor crisis as both a product and a contributor to the wider cultural problem of declining participation. 

 

Role of Subsidies

A number of factors are contributing to the labor shortage, from pandemic-related worries about personal health to rising costs of daycare.

But some also wonder whether government subsidies meant to aid those who went unemployed during the pandemic were overextended, suppressing participation in the workforce beyond the height of COVID-19 shutdowns. 

Extra federal unemployment relief, initiated by President Donald Trump through the CARES Act and extended by President Joe Biden, came in the form of $300 weekly checks (reduced from an initial $600). This extra relief ended on Labor Day, after totaling $800 billion in aid to those without work.

Naughton believes that the government played “an important role” during the worst of the pandemic when it stepped in to assist both workers and organizations.

“But like all well-meaning programs, there are always unintended consequences,” he says, arguing that ongoing government assistance in the context of wider “institutional impoverishment” has contributed to government dependency and reduced incentives to work.

“Companies that had to furlough employers often had a hard time getting them back, in part because the unemployment assistance was equal or more than what they were getting paid by the business,” said Naughton, who sits on the board of several businesses and nonprofits.

However, other Catholic economic experts don’t believe COVID-19 related unemployment relief has contributed to the labor shortage. Clark at St. John’s, for instance, points to the fact that states that discontinued the extra federal assistance early have not seen a corresponding boost in their labor force.

Clark says this is consistent with “Basic Income” experiments, which demonstrate that providing people with a baseline of financial support does not reduce participation in the labor market — except for married women with children, “which might be beneficial, as they have something just as important to do.”

“I think when all the research is done on this period, we will see more evidence that cash benefits do not detract from workers’ [participation],” said Clark, adding that the government’s expansion of unemployment benefits in terms of amount and qualification was “the right call.”

 

Pushback Against System

Workers may be disincentivized to go back to work, but some data suggests this might be less a product of government assistance, and more deeply connected to dissatisfaction with labor market realities, including stagnant wages and long hours. 

A report from The Washington Post said the United States wasn’t experiencing a labor shortage so much as “a great reassessment of work.” An editorial in The Hill, was even more emphatic, arguing that American workers are on a “protracted general strike.”

“Millions are refusing to go back into low-wage, no-benefits jobs that require they abandon dignity and rights at the workplace door,” wrote Lane Windham, the associate director of Georgetown’s Kalmanovitz Initiative for Labor and the Working Poor. Possible indications of this trend are a surge in minimum salary expectations and significant willingness to change careers for better work-life balance.

Naughton and Clark both agree that longstanding injustices in the workplace and economy have contributed to the labor shortage. Naughton says the relationships between corporate profits and wage increases “have been out of whack for a long time,” while Clark says that a re-evaluation of the relationship between labor and business is “long overdue.”

“A pandemic will cause a lot of people to rethink their priorities,” he said of some workers’ hesitancy to go back to work. He added that some economic commentators, in their unwillingness to address wage stagnation, “sound like the 17th -century Mercantilists who emphasized the need to keep workers poor so that they are motivated to work hard.”

Clark also adds that the labor shortage may indicate a need to focus more on matching workers to suitable jobs instead of simply treating them like raw material to be used to fill a gap, and says an expansion in community college enrollment could be beneficial.

Naughton says, however, that the labor shortage — and its underlying causes — is not an “either/or situation.” He stresses the need to take all factors into account, including work conditions and wages, the role of government benefits, and the wider cultural situation.

On this last note, he worries about a “work ethic problem,” especially among younger Americans. 

“So when a pandemic comes along, and they find ways to opt out of the work world, they do.”

Economists and business owners will be waiting to see how labor numbers change in the coming months, especially with 7.5 million Americans no longer receiving COVID-related unemployment aid from the federal government. 

But for now, “Help Wanted” signs remain in storefront windows across the nation — indicating a labor shortage, yes, but a social and cultural deficit as well.