Analysis: How the Post-Pandemic Labor Crunch is Curbing U.S. Manufacturing



Timothy Aeppel | Reuters

A foundry in Indiana couldn’t ship $1.6 million worth of metal parts to customers last month because it didn’t have enough workers to make them, while a Massachusetts plastics factory has outsourced nearly a quarter of its business to subcontractors to keep up with orders it otherwise couldn’t fill.

Welcome to the great post-pandemic labor crunch.

As economic growth revved up in recent months, employers rushed to pull back workers shed during the COVID-19 crisis. But it hasn’t been easy. The Labor Department’s latest jobs report showed decreases in manufacturing, retail, and courier services employment in April, sparking a heated and increasingly politicized debate over whether generous unemployment benefits were keeping workers on the sidelines.

The enhanced benefits, which include a $300 weekly supplement, pay more than most minimum wage jobs. They were extended to early September as part of the Biden administration’s $1.9 trillion pandemic relief package approved in March. So far, more than 20 Republican-led states have moved to end the extra payments ahead of schedule citing local labor bottlenecks.

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