Labor shortage in NJ will drive up consumer costs


Gov. Phil Murphy suggests that New Jersey’s continuing labor shortage is a good thing. Long a supporter of raising the minimum wage to $ 15 an hour, Murphy believes the pandemic will make it faster and could raise wages even more. With the federal unemployment benefit enhancement of $ 300 per week, workers earning less than $ 15 an hour earn more by staying home before returning to work. The disparity has hit the hotel industry particularly hard. Some shore-based businesses say they’ve increased their starting wages to as much as $ 16 an hour and still can’t hire enough workers.

Murphy, however, dismissed claims that increasing unemployment benefits would be a disincentive to work. As he prepared to march in a Memorial Day parade in Bergenfield on Monday, the governor said lingering fears of COVID-19 have left many workers “scared” to return to work. He also blamed the lack of child care centers and school concerns for the shortage of workers. Yet at the same time, Murphy suggested that the labor shortage is a good thing with free market forces and the demand for workers forcing companies to raise wages, “It may be that (business owners) will have to pay them more. “

Governor Murphy also realizes that consumers will be forced to pay more as businesses pass on their increased labor costs to customers, and is not worried. “I think that’s probably a way for people to get around this problem,” he said. “And I guess to be honest they’ll probably pass that on, so the burger will cost 50 cents or 75 cents more, whatever it is.”

At a recent town hall meeting hosted by the New Jersey Business and Industry Association, several business leaders said unemployed workers said they would return to work if they could be paid in cash so they could continue to receive benefits. Almost half of all states have already canceled the additional federal unemployment benefit of $ 300 per week or are planning to phase it out. Arizona, Montana, New Hampshire, and Oklahoma offer return-to-work incentives. Murphy has rejected talks about cutting federal benefits and refused to apply the rule that unemployed people certify that they are actively looking for work.

Michele Siekerka, CEO of NJBIA, said people who genuinely cannot return to work should benefit from the unemployment insurance safety net, but those who are able to return to the labor market work, unemployment should no longer be an option. “There are too many examples of people unfortunately taking advantage of the system and we need accountability,” she said. “We need a balanced system right now that helps the employer while protecting the employees who need it.”

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