Powell meets a changing economy: fewer workers, higher prices



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WASHINGTON (AP) – Restaurant and hotel owners are struggling to fill jobs. Delays in the supply chain drive up prices for small businesses. Unemployed Americans unable to find work even with record high job vacancies.

These and other disruptions to the U.S. economy – the aftermath of the viral pandemic that erupted 18 months ago – appear likely to last, a group of nonprofit business owners and executives said on Friday. to Federal Reserve Chairman Jerome Powell.

The business challenges, outlined during a “Fed Listens” virtual panel discussion, highlight the ways the COVID-19 epidemic and its delta variant continue to transform the U.S. economy. Some event attendees said their business plans are still evolving. Others have complained of sluggish sales and fluctuating fortunes after the pandemic eased this summer, then escalated over the past two months.

“We are living in truly unique times,” said Powell at the end of the discussion. “I have never seen these kinds of supply chain problems, I have never seen an economy that combines drastic labor shortages with a lot of unemployed. … So it’s an economy that is changing very quickly. It’s going to be quite different from the one (before).

The Fed chairman asked Cheetie Kumar, a restaurant owner in Raleigh, North Carolina, why she was having such a hard time finding workers. Powell’s question goes to the heart of the Fed’s mandate to maximize employment, as many people who worked before the pandemic have lost their jobs and are no longer looking for them. When – or if – these people resume their job search will help determine when the Fed can conclude that the economy has reached the peak of jobs.

Kumar told Powell that many of his former employees have decided to quit the restaurant industry for good.

“I think a lot of people wanted to change their lives, and we lost a lot of people in different industries,” she said. “I think half of our people have decided to go back to school.”

Kumar said her restaurant now pays a minimum of $ 18 an hour, and she added that higher wages are likely a long-term change for the restaurant industry..

“We can’t get by and pay people $ 13 an hour and expect them to stay with us for years and years,” Kumar said. “It just won’t happen.”

Loren Nalewanski, vice president of Marriott Select Brands, said his company was losing out to similar challenges as many former employees, especially housekeepers, left for other jobs that recently raised wages. Even the recent cut to a federal unemployment supplement of $ 300 per week, he said, has not led to an increase in the number of job seekers.

“People have left the industry and unfortunately they are finding other things to do,” Nalewanski said. “Other industries that may not have paid that much … are (now) paying a lot more.”

Jill Rizika, president of Towards Employment, a non-profit workforce development organization in Cleveland, said she sees the stark disconnect every day between companies posting millions of job vacancies. and those struggling to find work and escape poverty. About 60% of the people her organization helps find jobs have criminal records, she said, and 65% have only high school diplomas. Many parents, especially mothers, are still unable to return to full-time work.

“They tried to work but because of the epidemics, the children are being sent home from daycare or school, which makes their schedules unmanageable,” said Rizika. “Where the digital divide comes in: a young mother tried remote working but didn’t have enough broadband to make it work.

Small businesses are also grappling with rising costs, with little relief in sight, some participants said. The Fed has accelerated its plans to begin to withdraw from its low interest rate policies, in part because of fears of rising inflation.

Larry Andrews, chairman of Massachusetts Growth Capital, a state agency that supports small businesses, said that during a recent tour of the state, a cafe owner told him that the price of a case of eggs had skyrocketed since the pandemic. Another restaurant owner said a jug of cooking oil went from $ 17 to $ 50 – “if you can get it.”

“The speed and intensity of this slowdown – and the speed of the recovery in many areas – is unprecedented in modern times,” said Powell in prepared remarks at the start of the event. “The business plans have been reworked, the outlook has been revised and the future continues to be tainted with uncertainties.

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