Don't Want A Worker Shortage? Stop Paying Starvation Wages!

The media hype over a supposedly widespread worker shortage gas been rife lately, and of course being blamed on a supposedly over-generous social safety net, particularly the expanded unemployment benefits put in place during the pandemic and still continuing to this day.  That supposedly makes it pay more to stay on the dole than to go back to work.  But the "absent referent" here, the biggest elephant in the room, is that wages are currently still too low.  If the federal minimum wage had kept up productivity gains since 1968, it would be about $22/hour today, similar to the current de facto minimum wage in most of the Nordic countries.  Given how the worker shortage is primarily concentrated in the lowest-paying jobs, the solution is very simple:  if employers want employees so desperately, then stop paying starvation wages, and pay the workers at LEAST what the market says they are really worth, and of course enough to, you know, LIVE on.  Problem solved.  Next.

In the meantime, as for the idea of unemployment benefits being too generous, if a true labor shortage were really a widespread problem, all they would need to do is take the extra $300/week bonus and instead repurpose that money as a wage subsidy to low-wage workers.  The latter bonus could be a sort of "reverse payroll tax" that automatically tops up one's paychecks directly.  Otherwise, leave the current benefits as is, albeit perhaps reinstating the work search requirements after some time, and require furloughed workers who are called back to their jobs to return to work after a reasonable amount of time.

It is worth noting that an actual Universal Basic Income (UBI) contains no such perverse incentives (unlike over-generous unemployment benefits), since one can still receive it regardless rather than have to give it up upon returning to work.  But it can still effectively increase the bargaining power of workers, increasing the de facto minimum wage.