Low-Wage Jobs Deterring the Labor Market

The United States of America is facing a problem now that is has never faced before in its history. Since 1776, when the nation was ratified, there has never been a point in time where unemployment is very high while labor shortages are at an all-time high. It's really amazing to think about. Tens of millions of people spoke out against the lock-downs last year due to government closing businesses for Covid-19 protection. Though now that most of those restrictions are lifted in at least over 30 states, a huge portion of those same people have refused to return to work and are living their lives unemployed.

Why is this the case? There are two schools of thought on this, and they tie into each other. The first school of thought is that with state unemployment payments giving an average of around $300 a week, and federal supplemental unemployment payments giving another $300 a week, any American who files for unemployment is entitled, by law, to at least $600 per week in benefits. This is net income. One would have to earn around $1,100 in gross income a week to net $600, once factoring in state and federal taxes, insurance, SSI, etc. So, the first thought is that people are making more by not working.

The second school of thought is that jobs aren't paying enough. Of course, at an average of $9/hour for most jobs, that's less than $400 per week gross, basically $300 per week after being taxed. So the average person working an average job is only making half off of their labor compared to what government gives them freely.

The thought that's prevailing a lot more now is that jobs simply aren't offering a high enough salary for people to actually work there. Whether one wants to say they're spoiled by unemployment or for whatever other reasons, the fact remains that we have a labor shortage and fewer people willing to work.

Politicians and economists are scrambling to find solutions for this issue, including floating mandatory minimum wage hikes, because the current system is entirely unsustainable.

Possible Solutions May Cause Bigger Problems

Everyone has an opinion about the minimum wage and whether it should be raised or exist at all. Some people speak about a "living wage" being a requirement, while others claim that raising wages and forcing companies to pay more money is why the cost of living is so high in the first place. As the two sides bicker, who's actually right? Perhaps neither; perhaps both. The fact of the matter is that we live in an unprecedented economic time in history. Automation and technology and a country whose population grows by the millions every single year. No other nation in the world, at any point in time, has had these issues. So, the reality is that no one knows if their possible solutions will work or merely cause bigger problems.

Raising the minimum wage seems like a great thing, in spirit. Though everyone who's been to a grocery store knows, when they're scanning their own items and bagging their own groceries, that something is different than it used to be. Everyone who has to pump their own gas but remembers that guy who used to do it for them longs for those days to return. However, those days cannot return, as the companies cannot afford to keep these low-end positions open, because people keep demanding the minimum wage be raised.

Those grocery baggers and gas station attendants were typically high-school kids with starter jobs saving a bit of money, or people who are a bit mentally challenged and cannot be hired anywhere else. So while higher wages work out great for a certain percentage, you have millions of people who will now never have any opportunity to work and will subsist off of welfare their entire lives, in all likelihood. So, no, nobody has the solution. Anyone claiming they do is a liar.

The fact of the matter is that we go through trial and error with our economic issues. Some things work, others do not, and ideology has never solved a single problem in this realm. Likely is the case that the best possible thing anyone can do at this point and time is just work. Just help support an economy and keep a business running. It might not be perfect, but we cannot change anything from dreams, hopes and wishes; we must have a practical economy that exists if we're to try practical solutions going forward.