The U.S. Chamber Discusses Initiatives to Address the Deepening Labor Shortage and Oppose the PRO Act

By Tim O’Connor

This year has seen a record number of job openings, including a high of 10.9 million open positions at the end of July. At the same time, more workers than ever are quitting their jobs, including 4.4 million in September. And to make things worse, Congress is considering bills like the PRO Act that would substantially disrupt labor relations for the entire country. For distributors eager to return to pre-pandemic levels or even expand to meet the surge in operator demand, the labor shortage coupled with uncertainty about the impact of potential labor policies creates a hurdle in hiring.

Getting People Back to Work

When the pandemic hit in spring 2020, businesses across the country were forced to lay off employees to survive. In a single month, March to April, the unemployment rate jumped from 4.4 percent to 14.8 percent. More than 22 million people lost their jobs during those months and many have still not returned to the workforce even as the availability of jobs returned. The record numbers of open positions are slowing the
economic recovery, says
Curtis Dubay, senior economist for the U.S. Chamber of Commerce. “Businesses need workers to make their products or provide their services,” he says. “They cannot do that fully without workers and right now many businesses are employing far fewer workers than they would like.”

The Impact of Unemployment Benefits

The first major bill passed by Congress to address the fallout from the pandemic, the CARES Act, established an additional $600 weekly unemployment benefit on top of the usual benefits individuals received. That amount was later extended but lowered to $300 by the American Rescue Plan. However, as the economy recovered and vaccines became available, the extra benefit became a disincentive for some workers to return to the labor force. In May, the U.S. Chamber called for an end to the benefit and several states opted out of it in hopes of spurring job growth. The expanded unemployment benefits expired on Sept. 6 and there was hope businesses would see a sudden surge of job applicants, but Dubay says that has not yet been realized. “We lost 183,000 workers from the labor force in September and only added 100,000 in October,” he explains. “Built-up savings and remaining issues with the virus are keeping people from returning as quickly as many thought they would.”

Some would-be workers have lingering fears of getting sick from COVID-19 or are experiencing child and dependent care issues, Dubay says. Others chose early retirement or remote work.

Although the expiration of the extra unemployment benefit hasn’t had an immediate impact on bringing workers back, businesses are not eager to see the weekly subsidy reinstated. The $1.7 trillion Build Back Better framework creates new government benefits that Dubay says would likely suppress labor participation, such as provisions that increase transfer payments without requiring recipients to work. “The entire Build Back Better bill is flawed and should be scrapped altogether,” Dubay adds.

Fighting the PRO Act

One of the most anti-business bills to reach Capitol Hill in recent memory is the Protecting the Right to Organize (PRO) Act. The bill would rewrite the country’s labor laws in favor of unionization and implement policies that were previously rejected by the courts and a bipartisan Congress. According to the National Association of Wholesaler-Distributors, the bill would “undermine worker rights, drag employers into unrelated labor disputes, disrupt the economy and force individual Americans to pay union dues regardless of their wishes.”

The PRO Act passed the House on a 225-206 vote last March but it stalled in the Senate as priorities shifted to the bipartisan infrastructure plan and the Build Back Better bill. Many elements of the PRO Act were included in an earlier version of the Build Back Better framework but were removed during negotiations between progressive and moderate Democrats. Still, one provision remains in the scaled-back version of the reconciliation bill that President Joe Biden revealed at the end of October: the implementation of an up to $50,000 penalty for any employer who commits an unfair labor practice on the first offense, and up to $100,000 for any additional penalty within five years.

Although the full PRO Act appears stalled, for now, the U.S. Chamber continues to work against its passage. The Chamber published a survey in July that showed widespread skepticism among voters for the bill. Seventy percent said they were concerned about the PRO Act abolishing state right-to-work protections while 57 percent believed workers should not be forced to join a union as a condition of employment.

“The PRO Act would make it harder to hire workers in the long term, especially as independent contractors,” Dubay says. “It would not help in the short term but its impact would be more in later years.”

Enhancing Job Training

Rather than forcing employees to join a union against their desire, the U.S. Chamber believes policymakers should focus on breaking down barriers to employment. One major obstacle is finding candidates who have the necessary skills to perform a job, especially when the position requires technical skills.

“Industries that share similar needs in terms of in-demand skills benefit from policies that incentivize or support joint efforts to develop and implement training programs,” says Cheryl Oldham, vice president of education policy for the U.S. Chamber and senior vice president of education and workforce for the U.S. Chamber of Commerce Foundation.

“Employers are often in the best position to signal their needs as it relates to technical skills,” she continues. “Tax policies – such as employer tax credits – could help incentivize employers to increase the amount of training provided to their employees, while collectively building a stronger American workforce.”

Although the federal government provides job training through the Workforce Innovation and Opportunity Act, Oldham says the program’s reach is limited by a lack of focus on funds being directed toward actual training. As a result, these programs often serve only a fraction of the workforce that could benefit from a skills upgrade. “To the extent individuals end up in jobs after completing training, such employment is often unrelated to the training they received,” she says, “reflecting a mismatch of training and the skills demanded in the workforce.”

The U.S. Chamber is working to address that talent development gap through its America Work Initiative. Launched in June 2021, America Works is a national effort to mobilize industry and government to swiftly address America’s worker shortage through employer-led solutions. The initiative offers several programs and resources to employers, including the Talent Pipeline Management curriculum and the T3 Innovation Network to match the right people to the right jobs. The Talent Finance Program can also help employers learn how to finance education and training.