Suddenly America is facing a severe structural labor shortage. We all feel it, whether we’re trying for reservations at a restaurant that has reduced hours, seeking handyman help, or just trying to get somebody to answer the dang phone.
Nurses and teachers are in short supply. Employers report at least two job openings for each job seeker. Beyond personal inconvenience, when workers produce fewer services and goods for dollars to chase, prices go up and inflation results.
You can partly blame it on COVID. Politicians shut down much of the economy, then shoved trillions of dollars in “COVID relief funds” to those forced not to work.
Unfortunately, the spigot was never fully closed, and many Americans found that sleeping in agreed with them. Europe, Canada, and Japan all rebounded while the U.S. was left with about one million fewer workers.
Adding to the problem, the youth anti-work movement continues to grow. Work is for suckers and victims. Social media outlets praise workers for quitting their jobs. Others are lionized for being “quiet quitters,” idlers who do the least work possible while still collecting a paycheck.
The inspiration for the anti-work cult traces back to the Marxist anti-capitalist movement, a long-time foe of the American work tradition. Their thesis is that capitalist employment is exploitive and therefore, not working is virtuous.
It coincidentally turns out that, for many Americans, government policy has significantly disincentivized work. And for these people, working harder is no longer the way to get ahead.
Writing in the Wall Street Journal, Phil Gramm and John Early explain how this effect is commonly underestimated because of the way income is reported by the federal government. The Census Bureau, inexplicably, does not treat most transfer payments as income.
That’s important because government transfer payments to the bottom 20% of households, income-wise, ballooned by 269% between 1967 and 2017 while the middle 20% realized only a 154% increase in their after tax income.
The results were staggering. In 2017, the bottom 20% of households had $6,941 in “income” and only 36% of working age people actually worked. However, after the transfer payments and taxes are included, as they should be, their total income was $48,806.
The second to the bottom quintile had 85% employment and an average total income of $50,492, actually less than a $2,000 difference from the lowest group. The middle quintile was 92% employed and earned $66,453, but after taxes and transfers that shrank to $61,350, merely 26% more than the bottom quintile.
But wait, there’s more. Family units are smaller in the lowest quintile than the others. Per capita, the adjusted net income was actually $33,653 in the lowest quintile, $29,497 in the next lowest, and $32,754 in the middle.
Sorry for all the numbers, but they tell an important story. For 60% of Americans, working much harder and even earning more money produced a negligible net benefit. Means-tested government programs were just as lucrative. It’s not hard to understand why the percentage of working age people in the lowest quintile who were employed fell from 68% in 1967 to 36% in 2017.
Policymakers seem to believe that incentives don’t matter, but they do. People who choose not to work and live off the labor of others earn some understandable resentment, but they’re not acting irrationally under the circumstance. The heart of the problem is their enablers in Big Government who, for their own political purposes, created this perverse system.
It’s often forgotten that in the 1990s, governments established work requirements for many means-tested benefits. “Workfare” was a generational policy success. In spite of hysterical warnings that “children would starve in the streets,” poverty rates dropped as employment increased.
Unfortunately, the advocates for workfare declared victory and moved on. But welfare bureaucrats stayed put, patiently reestablishing their vision of welfare without requirements. So now poverty is supported rather than reduced. And Arizona was among the states that quietly removed the work requirements for Medicaid and other welfare programs.
But government handouts that replace labor don’t work. They erode self-reliance, worker pride, and self-sufficiency. They threaten our shared prosperity. And most of all, they undermine American values.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
Over 700,000 jobs are expected to be created in Arizona in the next decade, according to a new report from the Arizona Office of Economic Opportunity (OEO).
According to the OEO report, Arizona employment is projected to increase from 3,030,216 jobs in 2020 to 3,751,905 jobs in 2030. This translates to growth of 721,689 jobs, or 2.2 percent annualized growth.
Arizona’s job growth rate will beat out—by more than 3 times—the expected overall U.S. growth rate over the same period. U.S. employment is projected to grow by 0.7 percent annually from 2020, compared to 2.2 percent in Arizona.
The largest job gains are anticipated in the Education and Health Services (23,906 jobs annually) and Professional and Business Services sector. The Education and Health Services and Construction sectors are expected to see the fastest job growth rates at 3.2 percent and 2.7 percent annualized growth respectively. The report predicts job growth in all 15 counties and all sectors excluding government.
According to a recent story, Arizona is recovering jobs lost during the pandemic faster than most other states, with the third-fastest jobs recovery in the nation. This comes on top of forecast-beating revenue collections reported by JLBC, another sign of economic strength. In addition, personal income in Arizona rose last year at a rate faster than nearly any state in the country.
Over the previous decade, Arizona employment increased by 492,645 jobs, or 1.8 percent annual change, to 3,030,216 jobs in 2020 from 2,537,571 jobs in 2010.
Although Arizona is not yet back to pre-pandemic workforce levels, a recent U.S. Bureau of Labor Statistics report shows the state is headed in the right direction, with more than 21,000 jobs added in July, boosting Arizona to fourth place in percentage of jobs recovered post-COVID19.
That means Arizona has restored all but around 20,000 of the 331,500 jobs lost in the pandemic’s aftermath, giving the state at a recovery rate of 93.7 percent. Only three states -Utah, Idaho, and Montana- have a better percentage of recovery than Arizona as of July.
Yet despite the state’s positive trajectory, many small business owners, economists, and job placement officials remain worried about whether Prop 208’s 3.5 percent income tax surcharge will go into effect or not, and whether legislation aimed at blunting any impact will withstand its own legal challenge.
The surcharge was narrowly approved by voters last November to hit Arizonans earning more than $250,000 (single filing) or $500,000 (joint filing) in an attempt to increase K-12 funding. The tax was designed to be on top of the then-existing income tax of 4.5 percent, but last week the Arizona Supreme Court ordered a Maricopa County judge to determine whether Prop 208 tax revenues will exceed the Education Expenditure Limit set in the Arizona Constitution.
If the answer is yes, then the judge must declare Prop. 208 unconstitutional and enjoin state officials from putting the tax surcharge into operation, the justices ordered.
Gov. Doug Ducey signed legislation in June to change Arizona’s individual income tax structure over the next three years and to blunt the surcharge effect. The legislation also provides small businessowners an alternative to the surcharge. But until the Prop 208 legal issue is resolved, there are worries that Arizona’s recovery will slow due to small business owners reducing spending -such as employee compensation and benefits- to cover any additional tax burden.
Others may choose to abstain from hiring or even decide to cut personnel. And that is a point of concern for those trying to get jobs for all Arizonans who want one.
The same Bureau of Labor Statistics report shows Arizona’s rate of unemployment was 6.6 percent in July, ranking 40th in the nation. That ties with Alaska, Louisiana, and Pennsylvania, while Utah, Idaho, and Montana had unemployment rates at 2.6, 3.0, and 3.6 respectively, among the Top 10 lowest percentages for July.
Arizona’s current unemployment rate, however, is a vast improvement from April 2020, when the state had 14.2 percent of work-eligible adults out of jobs, a historical high. In addition, next month’s end of two Arizona Department of Economic Security (DES) unemployment benefit programs is expected to spur many out-of-work Arizonans back into the workforce.
Those programs -Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation- are scheduled to expire for the workweek ending Sept. 4. Ducey and DES have created a Back to Work program with several features to help Arizonans transition back to work, including childcare vouchers, educational incentives, and even hiring bonuses for eligible individuals.
Multiple business organizations joined together to release “Imports Work for American Workers,” an economic impact study which found that imports support more than 21 million American jobs.
Arizona imported $7.9 billion in goods and merchandise from Mexico in 2017, 38% of Arizona’s $20.6 billion in global imports.
Arizona’s exports were valued at $19.7 billion in 2020, down 20.1% over the year due to the COVID recession. In 2019 exports accounted for 6.7% of the state’s GDP.
The new study focuses on the net impact of imports on U.S. jobs — including statistics on sectors such as retail, apparel, transportation, manufacturing and consumer technology. The study also looks at how imports support jobs in states across the U.S. as well as trade policy initiatives pending before Congress and the administration with the potential to preserve or diminish import-related jobs.
Among the key findings:
Imports support more than 21 million American jobs across the country, including a net positive number in every U.S. state. The 10 states accounting for the largest number of import-related jobs are California, Florida, Georgia, Illinois, New Jersey, New York, Ohio, Pennsylvania, Texas and Virginia.
Imports from key trading partners — including Canada, China, the European Union and Mexico — support a net positive number of U.S. jobs.
Import-related jobs are good jobs that pay competitive wages. Nearly 8 million of the jobs related to importing are held by minorities and 2.5 million jobs are held by workers represented by unions.
The vast majority (96 percent) of companies who import are small or medium-sized businesses.
U.S. trade policies, many now pending before Congress and the administration, have the potential to both support and hurt these jobs.
The American Apparel and Footwear Association, the American Chemistry Council, the Consumer Technology Association, the National Foreign Trade Council, the National Retail Federation, the Retail Industry Leaders Association, the U.S. Chamber of Commerce, the U.S. Fashion Industry Association and the U.S. Global Value Chain Coalition commissioned the study.