Economy & Business

Psaki Suggests Short-Staffed Businesses ‘Pay More Wages’ to ‘Attract Workers’

White House Press Secretary Jen Psaki holds a press briefing at the White House in Washington, D.C., July 12, 2021. (Leah Millis/Reuters)

During a press briefing Thursday, White House Press Secretary Jen Psaki suggested that businesses struggling with labor shortages, which the Commerce Secretary recently called “acute,” could advertise higher wages to entice prospective employees and fill their vacant positions.

In response to a reporter’s question referring to a severely under-staffed restaurant owner’s plea to President Biden at a CNN town hall Wednesday, Psaki replied, “In some places, it may be that you have to pay more wages in order to attract workers,” echoing the president previous comments that it is a “worker’s market.”

“We have already implemented, and the money has gone out the door, for our restaurant destabilization program, something that was a part of the American Rescue Plan and helped hundreds of restaurants across the country stay open, reopen, and that was assistance that came from the American Rescue Plan that the president signed into law,” the press secretary noted when asked what constructive action the administration is taking to offer relief to battered businesses.

Employers across the country have signaled that they are prepared and willing to hire for job openings but can’t seem to identify candidates to apply for them. Sectors from restaurants to home health aides have confronted rising demand but have not been able to recruit enough human capital to meet it and provide their goods and services.

The commerce secretary recently attributed the worker shortage to a “skills gap.” At the press conference, Psaki did not address the other possible culprit for the labor supply vs. demand disequilibrium: the expansion and extension of unemployment benefits in many states.

Some Republican lawmakers have contended that the generous social safety net passed during the pandemic continues to incentivize many Americans to remain on the government dole rather than re-enter the labor force.

Wages grew at a rapid annual rate of 8.7 percent between March and April, yet businesses still had trouble finding employees.

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