Krull: The economic changes have just begun

A new pizza place opened near my home in Indianapolis.

A banner draped across the front of the business says the place is hiring. The wages are $16 per hour plus tips.

Another restaurant not far from it bears a similar sign. It promises $17 per hour. This eatery doesn’t mention tips, but it pledges to pay a signing bonus to anyone who comes on board.

At the same time, we read reports that record numbers of Americans have left their jobs in recent months. Many of them are leaving low-wage service jobs, such as the ones the restaurant and hospitality industry provides.

Welcome to the new economy.

There are many politicians — particularly conservative ones — who have been moaning about this supposedly newly discovered labor shortage. They complain that it is the result of pandemic relief payments that, they say, paid people not to work. They also say that Americans are now lazy, self-indulgent and reluctant to work.

They’re wrong on every count.

Their observations just demonstrate, once again, that most politicians don’t pay close attention to what’s really going on and that they would prefer to waste their time — and ours — with silly fights.

Economists have been warning that a labor shortage is coming for at least a decade. There are several causes. Declining birth rates over the past couple generations mean there are fewer people available. This was compounded by the Great Recession of 2008 and 2009.

As a result, economists have said that, by the year 2030, there will be a labor shortage as great as 25 percent.

That means the changes we’re seeing now will become even more dramatic.

Businesses, communities, states and countries will be prodded by these changed circumstances to make themselves more attractive to workers. That’s why the savvier nations around the globe are talking not about building walls to keep people out but revising their immigration policies to make it easier for talented people to relocate and labor within their borders.

Here in this country, states with leadership that looked ahead to this emerging reality didn’t waste time and resources on, for example, silly and perhaps self-destructive battles over things like right-to-work legislation and campaigns to encourage skilled LGBTQ citizens not to consider Indiana a good place to make a home.

But the alterations in the ways we live and function will go beyond traditional politics.

We’re seeing that already.

The relative scarcity of labor means, of course, that wages will go up. That will lead to similar rises in prices, especially for those goods and services that are the most labor-intensive.

But it also will tilt the balance of power between labor and capital at least a little bit back in labor’s direction. Part of the reason so many workers have quit working at restaurants and hotels is that they are confident in this new economy that they can find jobs elsewhere — often ones that pay better.

Those laborers who aren’t leaving their jobs are organizing to demand better pay and better conditions in the ones they already have. We have begun to see strikes pop up around the country.

The companies and states that assume hardline positions with the unions run a great risk. It isn’t just that those businesses will face unrest and disruptions in the short term. It’s also that they send a signal to potential future workers that they have no interest in working with or even listening to their employees.

In a labor market that’s tight now and only going to grow tighter, that’s not just foolish. It’s borderline suicidal.

But that’s the new reality.

Whether businesses like it or not — whether politicians like it or not — we’re going to have to stop refighting and refighting battles from the 1930s, ’40s and ’50s and focus on finding new ways to work together.

Because paying $16 per hour plus tips to make and deliver pizzas is just the beginning.

John Krull is director of Franklin College’s Pulliam School of Journalism and publisher of TheStatehouseFile.com, a news website powered by Franklin College journalism students. Send comments to [email protected]