President Biden speaks to reporters on July 8

In a CNN Town Hall, President Joe Biden was asked about the labor shortage plaguing restaurants.
Biden said that restaurants and tourism will be in a “bind” for a little while, but higher wages could help.
Biden backs a $15 minimum wage, but the measure doesn’t have full party support.

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In a CNN Town Hall, President Joe Biden weighed in on the labor squeeze currently hitting restaurants and other low-wage sectors.

John Lanni, an Ohio restaurant group owner, said that his industry continues to struggle finding workers: “How do you and the Biden administration plan to incentivize those that haven’t returned to work yet? Hiring is our top priority right now,” he asked the president.

In response, Biden said that the restaurant and tourism businesses are going to be in “a bind for a little while.” Biden said that a “lot of” workers who had been working service jobs are taking advantage of new opportunities and higher wages as job openings surge.

Biden also suggested that something else could be contributing to current shortages: Low wages.

Some of those jobs might be offering “$7, $8 an hour, plus tips,” he said, but workers could be making upwards of $15 an hour in other positions (he noted that Lanni’s workers could be making $15 or more). Currently, the federal minimum wage is still at $7.25, and the tipped minimum wage is $2.13 an hour.

But Biden’s remarks do speak to one of the drivers of the current labor squeeze: Workers simply want to get paid more.

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In June, leisure and hospitality wages surged even higher, a 7.1% increase from the year prior. But even those wages are not much higher than pre-pandemic levels, according to Heidi Shierholz, a former Obama administration economist and current director of policy at the Economic Policy Institute. Those wages still remain lower than other industries.

As Insider previously reported, the so-called Great Resignation is driven in part by workers switching into other jobs, or recognizing a wider net of opportunity. They might not even be switching into much “better” jobs, but simply ones with more consistent hours and wages.

Shierholz previously told Insider that one simple situation for addressing the labor shortage could be simply raising the minimum wage, a policy proposal that the president backs, but some Democrats have shot down. Indeed, The Washington Post’s Eli Rosenberg reported that businesses boosting wages to $15 an hour were able to lure in workers and keep morale up – but turnover down.

“And, lastly, if you make less than 15 bucks an hour working 40 hours a week, you’re living below the poverty level,” Biden said in the town hall. “You’re living below the poverty level.”

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Source:: Business Insider


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