Bipartisan JOBS Act, Medicaid work requirements and fewer licensing rules would help ease worker shortage
America is in the midst of the worst worker shortage in recent memory.
Many have heard the stories of employers offering bonuses and higher salaries in a desperate effort to fill openings. Many have experienced delays at restaurants or stores that are short-staffed. Others have had their flights delayed or canceled because there are not enough baggage handlers, TSA agents, pilots, or flight attendants.
Indeed, the scope of this labor shortage is unprecedented. Data from the St. Louis Federal Reserve indicates that 2022 has seen the highest number of job openings on record. Moreover, the labor force participation rate remains a full percentage point below its pre-COVID-19 levels, translating to 3 million fewer workers in the economy today.
This is a problem that deserves our attention. Labor shortages can undermine GDP growth, fuel inflation, and stifle productive innovation and investment. Moreover, a strong and healthy labor force is needed to sustain the Medicare and Social Security benefits on which millions of seniors rely.
Travelers arrive at the Detroit Metropolitan Wayne County Airport (DTX) in Romulus, Michigan, U.S., on Saturday, June 12, 2021. The acting head of the TSA is reportedly warning that 131 of the largest airports in the U.S. will likely face staffing shortages this month, as air travel begins to pick up amid the nation’s Covid-19 recovery. Photographer: Matthew Hatcher/Bloomberg via Getty Images
While there is no silver bullet, there are a handful of steps that Congress, local governments, and this administration can take right now to help bolster the workforce and give our economy a much-needed boost.
First, our country needs to address the growing mismatch between the skills needed to fill openings and the skills jobseekers possess. The skills gap, as this phenomenon has come to be called, is especially prevalent for technical jobs requiring more than a high school diploma but less than a four-year bachelor’s degree — think software programmers, hospital technicians, HVAC specialists, and so on.
These are generally well-paying jobs that offer solid benefits, and the skills they require can be obtained through workforce training programs at local community colleges and technical schools. We should make these programs more accessible to Americans interested in taking advantage of them.
One proposal from Senators Rob Portman, R-OH, and Tim Kaine, D-VA, will do just that. Their bill, The JOBS Act, would allow Pell Grants to be used at technical schools and community colleges, enabling countless Americans to receive the training they need to fill in-demand jobs that help fuel our economy. Congress should pass this legislation without delay.
Second, Medicaid work requirements should be considered for able-bodied adults without dependents. Medicaid was created nearly 60 years ago to provide free or heavily subsidized health care coverage to impoverished women and children, disabled individuals, and seniors in nursing homes who cannot afford the cost of long-term care. In 2010, Obamacare expanded Medicaid eligibility to healthy, working-age adults living at or slightly above the poverty line. Since then, Medicaid enrollment has ballooned to more than 75 million.
With over 10 million unfilled jobs, non-elderly, non-disabled adult Medicaid recipients can be required to work, search for work, or pursue educational opportunities in exchange for their taxpayer-funded benefits. This would help get more than a million Americans into the workforce and on a path toward self-sufficiency.
Third, local and state-level legislative bodies should take a hard look at reducing or eliminating burdensome and unnecessary occupational licensing requirements that don’t genuinely further public safety. Roughly a third of American workers are required to obtain a government license to legally offer goods or services for pay, and individual states control these regulations. While licensing makes sense for doctors and pilots, there seems little reason to force florists, interior designers, cosmetologists, and tour guides to pay hundreds or thousands of dollars and complete extensive educational programs as a prerequisite for work. Indeed, many of these occupational licensing requirements in effect today have become barriers to entry that curtail competition.
America is home to the most productive, innovative, and resourceful workforce in the world. They are the backbone of our economy and the source of our national prosperity. Their work ethic, grit, and ingenuity will continue to propel us forward into the future.
Yet, we mustn’t lose sight of the fact that these men and women are also profoundly impacted by the national labor shortage. Far too many Americans are being forced to work harder and longer to compensate for the lack of labor.
It’s time for leaders to address this national issue head-on by pursuing policies at every level of government to foster opportunity, remove bureaucratic red tape, and bolster America’s workforce.
