The news lately is that businesses just can’t find people to fill the jobs they’re offering. But it’s not a sign that people don’t want to work, it’s a sign that something is wrong with the American economy. Businesses have become addicted to a low-wage economy—one that contributes daily to increasing inequality and malaise among families.
There’s an easy way to solve the problem: Pay more.
Wages today are historically low. They have been growing slowly for decades for every income group other than the affluent. As a share of gross domestic product, worker compensation is lower than at any point in the second half of the 20th century. Two main causes are corporate consolidation and shrinking labor unions, which together have given employers more workplace power and employees less.
Corporate profits, on the other hand, have been rising rapidly and now make up a larger share of GDP than in previous decades. As a result, most companies can afford to respond to a growing economy by raising wages and continuing to make profits, albeit perhaps not the unusually generous profits they have been enjoying.
One more reality check: small businesses who say that if they have to pay people a living wage to work for them, they would have to close? Unfortunately, theirs is not a viable business model.