Can Incentives Resolve the Post-Pandemic Labor Crisis?

The United States is going through something in the post-pandemic economy that has surprised the smartest men and women in academia, corporate boardrooms, and governments: a labor crisis. At the height of the COVID-19 public health disaster, millions of Americans were left without employment, forced to rely on the public dime to keep food on the table, the lights on, and Robinhood trading accounts funded. The job market has yet to normalize: 6 million fewer jobs, 4.3 million Americans quit their jobs in August, and a record number of job openings. Desperate employers might need to install monetary and non-monetary incentives to attract workers, whether the government or private enterprise.

Florida, Indiana Competing for the Unvaccinated

Florida Governor Ron DeSantis (R) recently announced that he plans to sign legislation that gives $5,000 bonuses to out-of-state law enforcement who choose not to be vaccinated and move to the Sunshine State. In an interview with Fox News, the governor, who has been rumored to be a 2024 presidential candidate, confirmed that the state is looking to hire officers from outside Florida to fill police departments.

"In the next legislative session, I'm going to hopefully sign legislation that gives a $5,000 bonus to any out-of-state law enforcement that relocates in Florida," he told Fox News. "NYPD, Minneapolis, Seattle, if you're not being treated well, we'll treat you better here: you fill important needs for us, and we'll compensate you as a result."

Indiana has been making a similar push, inviting Chicago police officers to work for the state. Senator Mike Braun (R-IN) recently tweeted that he was "ready to help connect Chicago police officers to an Indiana police department that is hiring now and doesn't have a vaccine mandate."

This is completely different from the policies being enacted in other jurisdictions. For example, New York City is terminating all city workers who have not received at least one dose by Nov. 1. At the state level, a considerable percentage of health care and education workers are poised to lose their jobs. Meanwhile, Chicago is mandating unvaccinated public servants to undergo COVID testing twice a week.

It could be some time before the data come in to see if Florida's incentives work. Still, is the same thing happening in the private sector?

Will Corporate America Ignore Mandates?

As Liberty Nation reported, Southwest Airlines and Delta Airlines will not be sending pink slips to their unvaccinated employees. Instead, the former will allow these workers to continue earning a living while following mask and social-distancing rules, while the latter called the president's mandates "divisive." It could also be because the airline industry is already facing a worker shortage.

Ahead of the holiday shopping season, business groups are requesting President Joe Biden to delay his COVID-19 vaccine mandate until after Christmas. They contend that this move could worsen labor shortages and intensify the supply chain crisis. Office of Management and Budget (OMB) officials have held dozens of meetings with labor unions, industry lobbyists, and private individuals involved in a diverse array of fields, including trucking, dentistry, real estate, and recruitment.

“Now placing vaccination mandates on employers, which in turn force employees to be vaccinated, will create a workforce crisis for our industry and the communities, families and businesses we serve,” Chris Spear, president and CEO of the American Trucking Associations, wrote in an Oct. 21 letter to the OMB.

Evan Armstrong, a lobbyist at the Retail Industry Leaders Association, told CNBC that retailers are worried that vaccine mandates could initiate a wave of resignations that would negatively affect staffing problems that are already tight. "It has been a hectic holiday season already, as you know, with supply chain struggles. This is a difficult policy to implement. It would be even more difficult during the holiday season."

But Corporate America might be stuck between a rock and a hard place. While corporations are trying to do what is best for business, a new study found that they could have a lot to lose if they prioritize freedom over mandates. A new Morning Consult poll found that most Americans endorse the corporate vaccine mandate, with about one-third saying they would think about boycotting companies that ignore the rule. At the same time, a September KFF survey revealed that 30% of unvaccinated workers noted they would leave their positions instead of complying with a vaccine or testing mandate.

Could Incentives Be the Solution?

Be it a new type of brain drain or fear of being short-staffed during a reopening economy, companies are desperate to retain staff. Moreover, many businesses do not want to lose employees since it is expensive to hire and train new ones. Society for Human Resource Management (SHRM) data suggest it costs employers an average of $4,000 and 42 days to fill an open position. But they will also face fines for not adhering to the directives of the administration. This is why a growing number of companies are utilizing incentives to push workers to get the jab.

Liberty Nation reported in September that many well-known brands, including Whirlpool, Alaska Airlines, Devon Energy, Kroger, and Bolthouse Farms, offered as much as $500 bonuses to full-time hourly workers for receiving coronavirus vaccines. While the ideas behind incentives (or nudges) are divisive in the field of economics, the adage of "incentives matter" rings true. Or, as the duo authors of Superfreakonomics – Stephen J. Dubner and Steven Levitt – write, "People aren’t 'good' or 'bad.' People are people, and they respond to incentives."

~ Read more from Andrew Moran.