Powell meets a changing economy: fewer workers, higher prices
WASHINGTON (AP) – Restaurant and hotel owners are struggling to fill jobs. Delays in the supply chain drive up prices for small businesses. Unemployed Americans unable to find work even with record high job vacancies.
These and other disruptions to the U.S. economy – consequences of the viral pandemic that erupted 18 months ago – appear likely to last, a group of business owners and leaders of goal-oriented organizations said on Friday. nonprofit to Federal Reserve Chairman Jerome Powell.
The business challenges, outlined during a “Fed Listens” virtual panel discussion, highlight the ways the COVID-19 epidemic and its delta variant continue to transform the U.S. economy. Some event attendees said their business plans are still evolving. Others have complained of sluggish sales and fluctuating fortunes after the pandemic eased this summer, then escalated over the past two months.
“We are living in truly unique times,” said Powell at the end of the discussion. “I’ve never seen these kinds of supply chain issues, I’ve never seen an economy that combines drastic labor shortages with a lot of unemployed … So it’s an economy that evolving very quickly, it will be very different from the one (before).
The Fed chairman asked Cheetie Kumar, a restaurant owner in Raleigh, North Carolina, why she was having such a hard time finding workers. Powell’s question goes to the heart of the Fed’s mandate to maximize employment, as many people who worked before the pandemic have lost their jobs and are no longer looking for them. When – or if – these people resume their job search will help determine when the Fed can conclude that the economy has reached the peak of jobs.
Kumar told Powell that many of his former employees have decided to quit the restaurant industry for good.
“I think a lot of people wanted to change their lives, and we lost a lot of people in different industries,” she said. “I think half of our people have decided to go back to school.”
Kumar said her restaurant now pays a minimum of $ 18 an hour, and she added that higher wages are likely a long-term change for the restaurant industry.
“We can’t get by and pay people $ 13 an hour and expect them to stay with us for years and years,” Kumar said. “It just won’t happen.”
Loren Nalewanski, vice president of Marriott Select Brands, said his company is losing housekeepers to other jobs that have recently increased wages. Even the recent cut to a federal unemployment supplement of $ 300 per week, he said, has not led to an increase in the number of job seekers.
“People have left the industry and unfortunately they are finding other things to do,” Nalewanski said. “Other industries that may not have paid that much … are (now) paying a lot more.”
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