Colorado Politics

HUDSON | Workers strategically pivot post pandemic

Miller Hudson

Last week I drove past a Taco Bell displaying a sign that announced, “Start now! We pay $19 an hour. Work today, get paid today!” That doesn’t sound like they are seeking career candidates – more like anyone with a pulse will do. If you can still remember 2019 B.C. (before COVID) there was a labor/management tussle underway called “The Fight for Fifteen,” demanding a statewide $15 dollar-an-hour minimum wage. Supporters successfully persuaded voters to mandate five-years of step-by-step wage hikes in order to reach their $15 dollar goal. The legal minimum now rests at $12.32, while real wages have blown well past $15 per hour.

Just two years ago, employers were grumbling the pillars of Colorado’s economic prosperity would topple should wages be raised to $15 dollars. So much for that theory. It appears a few months idled at home persuaded many of the unemployed they would be foolish to return to work full-time at jobs that left them poor and struggling to pay rent. Why this turn of events surprises anyone, is a mystery. It’s easier to recognize you are being exploited by your bosses after it stops than while you’re trapped in a frantic survival loop. With jobs plentiful and salaries rising, Colorado may owe the federal government upwards of a billion dollars in unemployment trust fund loans, but new claims have shrunk to an all-time low and welfare costs are falling.

It appears the Colorado workplace will never be the same again. Despite grumbling that workers concluded they would rather remain at home and collect unemployment checks, most have actually returned to work – just not to their old jobs. Poverty wages lost their appeal when income inequality widened as the top 3% of earners saw their earnings grow by 70%. The audacity of millennials has prompted complaints that young workers are just too damned entitled. As a recovering Yuppie Boomer myself, I’m sure I’ve heard similar whining before. Instead of Reagan’s welfare queens traveling in Cadillacs, today we resent climate alarmists purchasing Teslas.

Among industrialized nations, the United States leads with nearly 25% of its workforce employed in low-wage service jobs. Considering Colorado’s economic dependence on tourism, it’s likely even larger than that. Hedge fund raids in service industries have made this problem even worse as equity pirates wring every last penny from workers’ paychecks. Can there be anything more disgraceful than the fact that 600,000 American health care workers have no health insurance and a majority of EMTs, who risk ferrying COVID patients to emergency rooms, also receive no medical coverage? In an August survey, 55% of the workforce reported they expected to look for a new job in 2022. Low-wage employers are shocked to learn there may no longer be an endless supply of financially desperate applicants.

As David Dayen points out in the American Prospect, much of this should have been expected. “Research survey(ing) 19 pandemics stretching back to the Black Death, found that real wages consistently went up …something not paralleled in similarly traumatic events like wars. Pandemics are a leveler for inequality,” he notes. Whether employers were feudal Lords in the 1300s, sweatshop operators in the 19th century or Republican legislators today, attempts have repeatedly been made to use the legal system to force workers to return to dead-end jobs. Twenty-five states rolled back enhanced COVID unemployment benefits this year, Colorado thankfully not among these, in the hope this might starve unskilled parents back into the workforce. It didn’t work.

On the positive side, we are witnessing a tsunami of business formations as workers choose to either become self-employed or band together to finance business start-ups. During the first three quarters of 2021, new business filings have been running at more than 5,000 every day. These entrepreneurial workers won’t be returning to the low-wage workforce any time soon, which should help maintain upward pressure on wages. Questioned about what employers should expect in terms of pay, Loren Furman, the incoming President at the Colorado Chamber of Commerce, acknowledged salaries are likely to keep rising through 2024. Despite inflation worries, for the moment wages are running ahead of prices which is good news for everyone.

The emergence of the Omicron variant indicates we will continue to face a fluid public health challenge, bordering on turmoil. Climate change, childcare, infrastructure investment and health system resilience continue to simmer on the back burners of Colorado’s economic engine. As the Legislature returns in January it is becoming clear we are still closer to the end of the beginning than we are to the beginning of the end of the plague years. Providing a living wage for full-time work seems a necessary place to start. Subsidizing low-wage employers through Colorado’s welfare system is about as inefficient and counter-productive a public policy as imaginable.

Miller Hudson is a public affairs consultant and a former Colorado legislator.

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