Economics professor explains national workforce shortages and supply chain problems felt by college – The Lafayette



Labor shortages and disrupted supply chains have been a stark reality since the onset of the COVID-19 pandemic, with repercussions felt by institutions across the country. Collège Lafayette is no exception.

The consequences of the labor shortage affect daily services, especially in catering and guard areas. According to the vice president of finance and administration, Roger Demareski, there are 46 open positions in the restaurant business that the college is struggling to fill.

“We are not immune to the labor shortage. Even in administrative or other staff positions, you just don’t see the same volume of applicants, ”Demareski said. “We have positions that have no candidate. “

The country faces both a labor shortage and a high unemployment rate. This may lead some to wonder why the unemployed do not fill these open jobs. However, according to economics professor Rexford Ahene, the issue is much more complex.

“Basically when Covid started we locked the economy down and production stopped. There were no purchases in progress other than essential services, ”Ahene said.

To survive, many companies have had to lay off workers, sell assets and suspend investments. This has led many people to retire early, according to Ahene.

“Many low-skilled workers and small businesses received unemployment benefits as well as stimulus benefit checks that continued for almost a year,” Ahene said.

The second reason for the shortage is that during the pandemic there has been a shift in the amount of low-skilled labor to relatively lucrative work.

“Low-skilled workers decided to take computer training and short courses that will put them in a better position, which in turn caused labor shortages in minimum wage jobs,” said Ahene.

The main root of these problems goes back much further, according to Ahene. With the economy transforming from manufacturing to services and many workers lacking the skills needed for the digital economy, structural unemployment has increased.

“Many of these people have retired or left the workforce because of a mismatch between available jobs and people looking for work,” Ahene explained.

When asked what Lafayette can do to deal with the labor shortage, Demareski offered two possible solutions: salary adjustments and promoting the benefits of working at Lafayette.

“We looked at some of the salary adjustments and made the ones we needed, but we don’t want to be in an arms race where we increase spending and pass it on to tuition. increases, ”Demareski said.

Demareski added that Lafayette’s lowest-paid dining room workers earn $ 13 an hour and other rates have been significantly increased. According to Demareski, in some cases small signing bonuses were offered. He also said the administration is trying to come up with a benefit structure that makes people want to come and work at Lafayette.

“I realize that we need to continue to look at what the salaries are on the campus as a whole, and therefore salaries for students, faculty and staff. And we might be happy to move on, making sure to review our salaries in the spring and try to make some adjustments, ”said President Nicole Hurd.

Ahene came up with another solution he called “learning by doing”.

“Employers will need to employ people who do not meet basic requirements and then give them on-the-job training so that they can qualify for jobs that are currently vacant,” Ahene said. “Either you have to pay more or you have to have training incentives. This will attract people who need this training to develop a professional skill. “

However, the labor shortage is only one side of the coin. With the shock of the pandemic and the resulting rapid economic recovery, aggregate production capacity shrank while aggregate demand increased, causing supply chain disruptions.

Demareski said supply chain issues are being felt in areas related to facilities and construction.

“The time needed to order material and its arrival have almost quadrupled. Costs have increased by nearly five hundred percent in some areas, ”Demareski said.

Many of the college’s new construction projects are postponed due to these shortages.

“This trend is certainly not sustainable and is causing delays in recent college projects, such as Rinek Rope Works and the renovation of Kunkel Hall,” Demareski said. “The schedule for these reconstruction projects is as follows: the car parks will start in December and open in June. Kunkle will debut in June and will be on the right track. Rinek could be delayed for a few months.

According to Ahene, shortages of raw materials are driving production costs up.

“There is too much money chasing a small inventory of goods in the market,” Ahene said. “Manufacturers want to respond and meet this demand, but they lack the capacity to meet the necessary production levels.

There are also disruptions in the transport of goods. There is no adequate transportation to meet the sudden surge in demand, many transportation workers have retired, and the United States has faced serious infrastructure challenges.

Although Ahene does not anticipate a solution to supply chain issues for at least six months, he is confident that production and delivery capacity will be adjusted and logistical constraints will be resolved.

As for what the Lafayette administration should do, Ahene thinks that “in a structure like this, we must look for local solutions”.

“Most goods can be produced locally, probably less efficiently, but at a scale that meets local market demand and also offers employment and skills development opportunities,” Ahene said. “It may cost a bit more, but be more predictable and reliable. “



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