Business

Fed official says he’s not buying the “big resignation” — and says employers “always say there’s a labor shortage to avoid paying higher wages.”

Minneapolis Federal Reserve Chairman Neel Kashkari said he is not “really” buying “the big resignation” — the term given to Americans who have quit their jobs in droves during the pandemic.

Instead, people are more likely to leave certain careers for better opportunities in others, Kashkari said during a conversation Friday at the University of Minnesota’s Carlson School of Management. Long-distance workers, for example, might have local driver jobs that keep them closer to their families, while childcare workers might consider less stressful, higher-paying retail jobs.

“There is a brain drain… from the toughest jobs to more attractive jobs,” Kashkari said. “We all have to adjust to that, because we need long-distance drivers; As much as Silicon Valley says they will all be out of work soon, it will be longer than they think. And we need nannies. So we’re going to have to make all the adjustments and that probably means adjustments in wages.”

Opening the presentation, Kashkari also said that companies “always say there is a labor shortage because they don’t want to pay higher wages.” (Of course, the tight labor market has led to this forced higher wages although Inflation is eating away at those gains.)

Kashkari is not the first to theorize that workers are looking for greener pastures rather than fleeing the workforce altogether. In fact, for the nearly 57 million Americans who stopped working between January 2021 and February 2022, nearly 89 million people were hired, according to government data. Some experts have said that the so-called “Great Resignation” is more of a “Big renegotiation” or “Great reshuffle.”

Career paths that have long been known for low wages — jobs in public school education, nursing homes, or day care centers, for example — have come with greater health risks and stress during the COVID-19 pandemic, potentially leading some workers to be re-evaluated became. Labor shortages also allowed those employed in these fields to weigh the potential downsides of their current job and be a bit more selective in the future, often resulting in better pay. A survey of 5,000 employees by tax consultancy Grant Thornton found that four out of 10 people who changed jobs received a raise of 10% or more.

But labor shortages in some of the country’s toughest industries could have far-reaching consequences. Think of nursing and residential facilities that have lost hundreds of thousands of workers since the pandemic began. according to government information. Last year, during a four-week period ending in mid-October, nearly a third of America’s nursing homes reported shortages of nurses or aides, according to a report AARP Analysis, which can lead to poorer outcomes for residents. Many nursing homes have therefore also limited new admissions Kaiser Health News.

https://www.marketwatch.com/story/fed-official-doesnt-really-buy-the-great-resignation-suggests-businesses-play-up-worker-shortages-to-avoid-paying-higher-wages-11652117795?rss=1&siteid=rss Fed official says he’s not buying the “big resignation” — and says employers “always say there’s a labor shortage to avoid paying higher wages.”

Brian Lowry

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