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Higher wages needed to entice employees back to work

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PANDE ECON 2

LA CROSSE, Wis. (WXOW) - One way to get employers back to work is to increase their pay.

UW-La Crosse Associate Professor of Economics Adam Hoffer said economists deemed 2021 as "the year of the resignation".

He explained that society took a hard look at work and home-life balance during the COVID-19 pandemic and some chose to leave their industries. This paired with a more global economic shift before the pandemic and then when everything shut down it took an unpredictable toll on everyone.

The current crisis is the shortage in supplies. When people see empty shelves, extra-long waiting periods for online purchases and "we're hiring" signs everywhere it's because the barriers put up to incentivize people to stay home are lasting longer than intended.

A short-term solution is to increase people's pay.

"As companies continue to raise their wages, that's going to encourage more workers that enter the workforce and certainly fill some of these vacant positions.," Hoffer said. "But of course with every change comes more and more changes down the line right? Higher wages are more likely to translate into higher prices right? And then higher prices of course affect both supply and demand."

He said the biggest learning lesson from the pandemic is that the economy is too complicated to find a single quick-fix solution. The next step is to see how it fares once COVID-19 emergency unemployment funds stop on September 4.

The unemployment funding efforts were public policy methods pushed by Democratic leaders who worked to encourage people to stay home.

Now they hope people get vaccinated, back to business and support local stores that suffered.

"I think with that federal money that's coming come in and there's more that the governor is doing every other week it feels like we're going to make it through," (D) Wisconsin's 95th District Representative Jill Billings said. "But I encourage people to come out and patronize our small businesses. They've got great products and they're good families in our community who run these businesses.

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Marcus Aarsvold

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