From factories, hotels, the corner pub, to Wall Street’s big money funds and Silicon Valley tech giants, the message being read in America is clear: workers are needed, and they are needed now. Our main business partner faces a impasse; there are more job openings today than at any time in history, yet more than 10 million Americans are unemployed. If the imbalance between labor supply and demand persists, the shortage of workers could unleash an inflationary spiral, paralyze the country’s large entrepreneurship and infrastructure projects and, as a consequence, put an end to hopes of post-2020 economic recovery, including also those of Mexico.
This unprecedented phenomenon is mainly explained by three factors. First, a revaluation of the current work model. Contrary to the opinion of some media, studies suggest that the delivery of individual fiscal stimuli and the payment of unemployment insurance during the pandemic are not the main cause behind the lack of workers. For example, a BTIG report indicates that, only in three states of the union, federal and state unemployment insurance exceeded the average salary in the same and, at the country level, only 3% of the beneficiaries of these received enough of the unemployment so as not to need to return to work. If they have not already been canceled, most of these benefits have an expiration date of September 6 and, however, it is very unlikely that this will resolve the mismatch between supply and demand.
Follow us on Google News to keep you always informed
The reality is that salaries stagnant for years, declining purchasing power, long hours with demanding clients, prohibitive costs for child care and health concerns stemming from the pandemic, among others, have decreased the importance of employment in the priority list of people. When deep down what is being rethought is the work model in its entirety, the current strategy of temporary increases in wages or new bonuses for hiring is hardly going to convince the Kansas meat packers, Maine crabbers, or the waiters from DC to return to work in the midst of a pandemic. On this point, a Pew Research Center survey found that 66% of the unemployed had “seriously considered” changing their field of work, a much higher percentage than that experienced during the Great Recession of the 1930s.
In short, what America’s workers are demanding are better working conditions, greater guarantees, and more flexibility. Faced with this new dilemma, the unemployed now have a much more valuable hand in the poker of labor negotiations vis-à-vis potential employers.
Follow the information about business and current affairs in Forbes Mexico
Second, structural changes and creative destruction in the economy. The pandemic forced companies and workers to adapt to a partially remote and automated economy to reduce infections. An economic restructuring process that was expected to take place within 20 to 30 years occurred in less than six months and millions of workers did not have the knowledge or technical skills to adjust to the dynamics of the new labor market. Reflecting changes in domestic demand, technology and logistics companies grew exponentially while the service sector and manufacturing faced large losses and massive layoffs. In other words, in addition to exposing the weaknesses in our regional supply chains, the pandemic also exposed skill gaps and between sectors of the economy.
The pandemic unleashed important migratory changes from the large cities of the country outwards. A Seattle yoga instructor or barista who left the city last year is now struggling to find jobs that fit her profile in less virus-exposed but more remote parts of the country. According to a study by The Economist, the disparity in job growth in the most dynamic areas of the economy and in companies struggling to survive is double that of before the pandemic.
Third and perhaps the most relevant factor for Mexico is the closing of borders. The United States is a country built and sustained by migrants. In this sense, borders closed to migration have a very high cost for the country. The economy of tourism, health, food, agriculture and research centers require hundreds of thousands of foreign workers and specialists. The same can be said for the retail sector where, according to data from the Border Trade Alliance, border closures are linked to a 40% decrease in retail trade in US border cities.
Follow the business information in our specialized section
The Biden administration was right to eliminate suspensions to the J-1 student visa program and raise the quota for H-2B visas for temporary workers, but much more is needed to fill the vacancies that sustain our economy. neighbor to the north. The development of systems to share information on job vacancies in both countries, the expansion of categories of workers that coincide with the immediate labor needs of the United States in the “NAFTA visas” within the new T-MEC, the joint development of technical certifications, the formalization of alliances with labor associations in both countries, and the elimination of lotteries for work visas are achievable objectives if decision makers on both sides of the Rio Grande want to solve this problem and at the same time prepare future generations of North American workers. .
One of the solutions to this dilemma is found in Tokyo. As if it were an Olympic relay race, Mexico has both the potential and a unique opportunity to help solve the United States’ job cramp, take the baton, and promote a common vision of a dynamic and competitive regional economy vis-à-vis other trading blocs. . As the United States undergoes major changes in its labor market, the government and private initiative in Mexico must seize the moment and take leadership to help resolve the United States’ labor imbalance, particularly in the service sector, agriculture, construction and transportation. . Only the right time and the right policies will tell if Mexico is capable of winning the global relay race for North America.
Subscribe to Forbes Mexico
Contact:
Diego Marroquin Bitar, Fellow at the US-Mexico Foundation MPP from Georgetown University *
Enrique Perret, Director of the US-Mexico Foundation *
The opinions expressed are solely the responsibility of their authors and are completely independent of the position and editorial line of Forbes Mexico.