Hoosier economists explain reasons behind labor shortage

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INDIANAPOLIS — By now, you’ve likely noticed the impact of the current labor shortage leaving all of us to wonder where the workers went. Hoosier economists say the virus caused long-term impacts on the country’s workforce and recovery will be a slow process.

Michael Hicks, a Ball State Economist, said deaths and sickness from COVID-19 takes a toll on staffing.

“We have seen here in Indiana, 15,000 deaths,” Hicks said. “Most of those are not of working age folks, but some of them are. There are people with long COVID. We don’t know how many thousands or tens of thousands of those are, but that will affect some.”

Hoosier economists said the uncertainty of the pandemic is stalling parents’ return to work.

“It might take them a longer time to figure out what kind of childcare they would need to get,” Timothy Bond, Associate Professors of Economics at Purdue University, said. “It might take a longer time in a two-parent household for each of the parents to come to an agreement for how childcare’s going to be provided.”

Some workers don’t feel safe going back to work in their pre-pandemic environments, and some have found new jobs.

“The local restaurant, the local retail operation are not going to see those workers come back if they’re working at home or as a student instead of working at a restaurant or a bar, that may be a far better option for them,” Hicks said.

Economists say the workforce shortage will likely continue for at least several months.

“All I want to say is I hope people can just be patient while everybody’s going through this, not just particular to our restaurant but with anybody who’s working in the service industry,” Snyder said.

Economists we spoke with say the notion people are not coming back to work because of unemployment benefits is not consistent with what experts have studied.

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