American Airlines is canceling hundreds of flights this summer, according to a spokesperson from the airline.
Company spokesperson Shannon Gilson said the airline is struggling with staffing as it tries to shoulder the massive increase in demand for travel. But, according to economists, recent claims of labor shortages appear overblown.
"The first few weeks of June have brought unprecedented weather to our largest hubs, heavily impacting our operation and causing delays, canceled flights and disruptions to crew member schedules and our customers' plans," Gilson told CNN.
"That, combined with the labor shortages some of our vendors are contending with and the incredibly quick ramp up of customer demand, has led us to build in additional resilience and certainty to our operation by adjusting a fraction of our scheduled flying through mid-July."
American Airlines is one of many companies complaining of labor shortages as states lift their coronavirus restrictions.
Experts say calling staffing issues a labor shortage fails to tell the whole story.
Instead, Joe Song, senior US economist at Bank of America Corp., told Bloomberg the United States is experiencing a ”job paradox.” Hiring is up, but in certain industries there is a gap in hiring demands and interested workers. This is especially true of the hospitality and leisure industries.
“When we are hearing stories of businesses having to raise wages in order to attract workers back, that’s a good thing,” said White House economic adviser Bharat Ramamurti in a Bloomberg TV interview.
“That is a positive development, especially for lower-income folks in this country.”
Workers in service jobs do appear to be leaving their jobs more frequently. According to the Department of Labor’s April 2021 Job Openings and Labor Turnover summary, workers quitting their jobs increased to a high of 2.7%, and a record 5.6% of restaurant workers left their jobs in April.
However, that does not necessarily translate to a worker shortage. Some workers are merely leaving their industry and looking for a job that offers better pay or conditions.
“The problem is we are not making enough money to make it worth it to go back to these jobs that are difficult and dirty and usually thankless. You’re getting yelled at and disrespected all day. It’s hell,” Sara Wojtala told the Washington Post.
A 31 year-old with two young kids, she also said finding child care has also been a huge issue. She previously worked in retail and wants to work, but not at her old job.
A Pew Research Center survey this year found that Wojtala is far from alone. Of the unemployed, 66 percent had “seriously considered” changing their field of work, a far greater percentage than even during the Great Recession.
The Economic Policy Institute did find signs of short-term labor shortages in the hospitality and leisure sectors. According to the institute’s own analysis though, these shortages are unlikely to spill into the larger economy. A recent report by the economic think tank suggests a continuation of unemployment insurance and other forms of direct assistance.
Instead of cutting benefits, the Economic Policy Institute found increasing wages in the restaurant and leisure industries was a natural way to bring workers back. The government's April jobs report showed employers are doing just that: wages are rising as employers try to attract more workers.
“The rapid wage growth of the past three months is exactly what is supposed to happen when there is a sectoral imbalance between supply and demand,” according to a post on the institute’s Working Economics Blog.
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