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America is in the midst of the worst labor shortage in recent history.
Many have heard the stories of employers offering bonuses and higher salaries in a desperate attempt to fill vacancies. Many have experienced delays at restaurants or stores with staff shortages. Others have had their flights delayed or canceled because there are not enough baggage handlers, TSA agents, pilots or flight attendants.
The magnitude of this labor shortage is indeed unprecedented. Data from the St. Louis Federal Reserve indicates the highest number of job openings on record in 2022. In addition, the employment rate remains a full percentage point below pre-COVID-19 levels, which translates into 3 million fewer employees in the current economy.
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This is a problem that deserves our attention. A labor shortage can undermine GDP growth, fuel inflation and stifle productive innovation and investment. In addition, a strong and healthy workforce is needed to sustain the Medicare and Social Security benefits that millions of seniors depend on.
While there is no panacea, there are a handful of steps Congress, local governments, and this administration can take now to boost workforces and give our economy a much-needed boost.
First, our country needs to address the growing mismatch between the skills needed to fill vacancies and those available to job seekers. The skills gap, as this phenomenon has come to be known, is especially prevalent in engineering jobs that require 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 high-paying jobs that offer solid benefits, and the skills they require can be acquired through staff training programs at local community colleges and technical schools. We need to make these programs more accessible to Americans who want to use them.
A 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 in technical schools and community colleges, providing countless Americans with 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 founded nearly 60 years ago to provide free or heavily subsidized health care to impoverished women and children, the disabled, 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 enrollments have risen to more than 75 million.
With more than 10 million unfilled jobs, non-elderly, non-disabled adult Medicaid recipients can be required to work, seek employment or pursue educational opportunities in exchange for their taxpayer-funded benefits. This would help put more than a million Americans into employment and on the road to self-sufficiency.
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Third, local and state legislatures should look closely at reducing or eliminating cumbersome and unnecessary professional licensing requirements that do not really promote public safety. About one-third of U.S. workers must be licensed by the government to legally provide goods or services for a fee, and individual states monitor these rules. While licensing makes sense for doctors and pilots, there seems little reason to force florists, interior designers, estheticians, and tour guides to pay hundreds or thousands of dollars and attend comprehensive educational programs as a prerequisite for employment. Indeed, many of these professional licensing requirements in place today have become barriers to entry that restrict 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 into the future.
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However, we must not lose sight of the fact that these men and women are also severely affected by the national labor shortage. Far too many Americans are forced to work harder and longer to make up for the labor shortage.
It is time for leaders to tackle this national problem head-on by implementing policies at every level of government to create opportunity, remove red tape and strengthen the American workforce.
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