During a rally, labor union members and their supporters listen. AP Photo/Bebeto Matthews They will not last': Even advocates fear workers' new gains are fleetingWASHINGTON Wages rise, employers give bonuses for hiring, and more Americans quit their jobs. This has sparked hopes from the White House that workers who were most affected by the pandemic will be empowered.However, even labor advocates believe that this newfound leverage will not last.The country's rapid reopening created an economic environment in which the demand for workers is growing faster than the supply. This gives greater leverage to lower-wage workers, whose assistance is required as Americans return to their restaurants and shops.Economists and worker advocates agree that without structural changes, including legislation to increase workers' bargaining power, the labor market will quickly return to normal. This will allow employers to regain the power it has enjoyed for decades. Wage increases might not be a long-lasting benefit for the next round, so bonuses are likely to go down in flames.Rep. Andy Levin (D.Mich.), who was a labor organizer and is a strong advocate for workers, stated that I believe the gains workers make will fade. They won't last.He said that it was necessary for the system to last.According to President Joe Biden on Friday, he welcomed the idea of employers "competing with one another to attract workers." A decline in labor power could undermine his pledge to raise pay. This has been increased in recent months due to employers scrambling to increase their staff.Biden also stated that workers will have the option to join a union or bargain collectively with their employer. This goal seems impossible in a divided Congress, which is trying to pass multitrillion dollar infrastructure legislation.Skepticism can be attributed to the fact that rising wages, which are the most tangible sign of workers' new power, have been largely concentrated in high-turnover sectors like leisure and hospitality.The average hourly wage for all employees other than supervisory rose by 0.9 percent in the past two months. However, it rose 3.5 percent for those who work in leisure and hospitality. They were the most affected by the pandemic lockdowns. Labor Department data was released Friday. The industry's turnover is almost double that of the average annual rate.Claudia Sahm, an ex-economist at the Federal Reserve, stated that there have been wage increases, but these are one-off increases. These are for industries with a high turnover. You don't have to hire them back at the higher wage and you definitely won't have to raise your wage rate next year.Economists predict that the labor market will stabilize in the fall. This is when all federal job benefits in all 50 states will end. Schools will reopen. Parents who have stayed at home to care for their children should feel less pressure. The long-term unemployed will also have more time to find work and return to the labor market.This is expected to cause a rush to work for millions unemployed Americans, at which point businesses won't be able to compete for employees.Many employers hope to get by for the next few months without having to pay higher labor costs. They also expect that it will be easier to find workers in the fall after schools reopen. Aaron Sojourner worked at the Council of Economic Advisers under the Obama administration.Are workers able to hold onto the gains that they are able create now? Sojourner, a labor economist and associate professor at the University of Minnesota said, "I don't know." There are many ways for employers to recoup value from their workers.Economic data shows that workers are seeing a return to normalcy. According to the Employment Cost Index, wages and salaries in private sector increased by 3 percent in the first quarter. The annualized growth rate was also about the highest since the early 1990s. This data set is from the Bureau of Labor Statistics and controls for occupational and industry differences.According to Gusto data, small businesses are giving raises at the same pace as they do in the December year-end rush. Gusto also reported that the average size of bonuses increased by nearly twofold between early 2019 and early 2021.Workers are empowered to find new jobs, and this goes beyond the pay. In May, the rate at which workers quit their jobs was at an all-time high of 2.7%. This is a sign that employees are seeing increased demand and taking advantage of the opportunity to find new work.Economists and labor advocates argue that the fact that workers are in control now won't be sustainable long-term.Sojourner stated that it is an adjustment. It is not a long-term change."Sahm stated that there may be cause for optimism if policymakers can capitalize on the current climate to pass policies such as a $15 minimum wage. This was a proposal that was rejected by Congress earlier in the year. Although the odds of the bill passing are slim, major companies such as Chipotle have increased their starting wages to $15 to attract workers.Sahm stated that if you wanted to push for this, these policies are popular with workers and have real-world evidence that it is possible. They should seize the moment to build on it and make lasting changes.Biden also asked Congress to approve the Protecting the Right to Organize Act. This legislation would make it easier for workers to form a union, and expand collective bargaining rights to contractors.Since years, the PRO Act, which President Obama included in his comprehensive American Jobs Plan, has been a top priority for both unions and Democratic leadership. The House passed it in March. The labor-backed legislation will not make it to the Senate. It would need 60 votes and some Democrats have refused to support it.Some labor leaders still hope that the current working environment will encourage workers to organize, who have been weakened by the coronavirus pandemic, and are unable to return to work at the same wage and in the same conditions as before the shutdowns. They hope that workers who are not unionized will join forces to keep employers under pressure for the long-term.Workers are talking with their feet by not flooding back to work right now. D. Taylor, president of Unite Here, represents 300,000 workers in frontline industries such as hotel, food service, and other frontline sectors across the U.S. They are saying, "I'm not going to work for poverty anymore."Taylor acknowledged that workers do have some influence on wages, but they are limited in their ability to demand more. They cannot ask for more health care, retirement benefits, or the hours they are assigned each week.Taylor stated that it was a clear call to the labor movement for them to organize. To change the economic power balance in this country, we need to invest a lot of resources in organizing again. It will only get worse unless we do.
