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Biden's labor secretary says workers won the labor shortage in March — and the future of the labor shortage depends on whether companies adapt

Apr 2, 2022, 18:14 IST
Business Insider
Labor Secretary Marty Walsh outside the West Wing of the White House on May 7, 2021 in Washington, DC.Alex Wong/Getty Images
  • In March, workers saw another pay bump, with hourly wages rising by 13 cents.
  • Labor Secretary Marty Walsh said workers are using their leverage in the labor shortage to get better pay.
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In March, workers got paid more — and the country added 430,000 jobs.

That came even as over 4 million workers quit in February, the ninth month in a row of a near-record number of workers throwing in the towel. That huge number of quits was outpaced by the number of hires businesses made, suggesting that workers aren't just leaving the workforce; instead, they're moving into higher-paying roles, as businesses raise wages to try and lure in new hires.

"I think the workplace is adjusting," Secretary of Labor Marty Walsh told Insider, adding: "People are using their ability, their leverage right now to move into better paying jobs. I mean, that's the bottom line."

Employers seem to be learning the value of raising wages, benefits, or both to try and bring in new workers amid a hot labor market. March saw hourly wages raise by 13 cents from the month before, according to the Bureau of Labor Statistics' monthly employment data release. That means workers have gotten a 5.6% increase in the past year.

"Quite honestly, I think companies in some places are gonna be reevaluating the work-life balance, flexible schedules, the way that they're paying people," Walsh said. "I think that there's a lot of options out there for people right now to go out and search the market. I think that that's a good thing for workers."

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Some of America's lowest-paid workers have seen a big pay bump. Wages in leisure and hospitality rose by 1.2% in March from February, and have grown by over $2 in just one year.

But Walsh identifies that workers want more than just higher wages: They also want to work more on their own terms.

Companies are "learning to create an atmosphere post-pandemic on what the workplace will look like," Walsh said, as companies are sensitive to workers "if they need flexibility in their scheduling," or "what their pay is at."

"I think a lot of companies are going to adapt as time moves on," Walsh said. The Department of Labor is looking at what the "future of work" looks like, he said.

When asked if the number of workers quitting will remain high, Walsh said that it "really depends on the companies."

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But Walsh said that there is one group that hasn't been as touched by workers leaving en masse for higher wages: Organized workplaces. According to the Bureau of Labor Statistics, nonunion workers' median weekly earnings are just 83% what their unionized peers make — meaning workers represented by a union already make more. Promoting union organizing and collective bargaining has emerged as a priority for the Biden administration.

"That's the one area that we haven't seen a lot of resignations in and a lot of job jumping in — in organized labor," Walsh said, "partly due to collective bargaining and contracts and benefits and things like that."

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