By M.D. Kittle
MADISON — Soaring inflation and a worker shortage crisis — driven by out-of-control government spending and economy-stalling liberal policies — are costing Wisconsin good jobs.
And things are only going to get worse for employers and consumers in the months ahead, industry experts fear.
Scott Manley, executive vice president of Government Relations for Wisconsin Manufacturers & Commerce, tells Empower Wisconsin that WMC has been contacted by several employers who are being forced to “make large investments out of Wisconsin.”
“They can’t find workers in Wisconsin,” he said. “They’re making 50-year investments. They’re saying, ‘How can we make that kind of long-term investment in Wisconsin when we can’t find workers today, let alone 20 or 30 years from now.”
It’s a negative consequence of what Manley calls a “perfect storm” of ills hitting the economy. The price of just about everything is rising with inflation hitting levels not seen in more than a decade. Much of the surge is related to rising labor costs amid a worker shortage crisis, which is putting more pressure on bottlenecked supply chains, which in turn is driving up consumer prices.
“One of my grocers said that forever they’ve had the highest confidence in the supply chain. It was efficient, they tweaked it all the time, it couldn’t be better. Now it’s a skeleton of itself,” said Brandon Scholz, president and CEO of the Wisconsin Grocers Association.
Suppliers can’t find enough product. What product they can move is slowed by a dearth of freight haulers in a trucking industry that bled jobs in the worst of the pandemic. So grocery stores are seeing pallets coming in with 60 percent of their orders — and at higher prices.
Retailers can only hold the line on costs for so long. Ultimately, the consumer gets the higher bill.
Massive federal spending, including extended unemployment benefits that kept jobless Americans at home and out of the workforce, has only exacerbated the problems.
“The result is you’re going to see higher prices,” Scholz said.
Democratic Gov. Tony Evers months ago could have ended the federal pandemic unemployment bonus payments of $300 a week. In July, he vetoed legislation that would have done so, and Assembly Democrats all voted to sustain his veto. The governor insisted the enhanced unemployment benefits had nothing to do with the worker shortage, but a raft of evidence proves otherwise.
The bonus payments expired two weeks ago. Manley said WMC is seeing some initial signs of relief.
“We have had several members reach out to us this week alone saying the number of job applicants is increasing noticeably,” he said. “The jury is still out, but the initial feedback we’re getting right now looks very encouraging.”
The supply chain disruptions are particularly troublesome for contract manufacturers, Manley said. If they don’t meet their contracts, many won’t survive. They’ve got the business, they just can’t find the workers and the raw materials they need — even at rapidly rising prices.
“They’re really frustrated,” Manley said. “They’ll tell you that based on market demand they ought to be running three shifts, 24 hours a day, seven days a week. Because of the supply chain problems and the inability to find workers, they say they’re lucky if they can cobble together two shifts.”
Evers has bragged about the millions of dollars in federally funded COVID relief cash he’s distributed for economic programs. But much of that spending is tied to progressive initiatives and efforts that fail to deal with the real challenges facing businesses today, critics say. Evers also has turned from the kind of quantitatively successful workforce recruitment campaigns that his predecessor, Republican Gov. Scott Walker, employed.
“I think the governor believes he can spend his way out fo this problem. The simple reality is, that’s not the case,” Manley said. “We need more people in our state and we need to do a better job training the people we have . Handing out a bunch of money to local governments and civic organizations isn’t going to get the job done.”