LUBBOCK, Texas — As the new 2022-year approaches, local experts reflect on hardships businesses have faced in the 2021 year.
Dr. Michael Noel, an economics professor at Texas Tech, said at the beginning of the pandemic, there was a massive collapse in demand due to more people staying at home due to the pandemic.
However, Noel said things shifted in 2021, as Lubbock and the United States started to emerge out of the pandemic and going back out.
“Demand is ramping right up, but supply can’t keep up. There are shortages in all sorts of things,” said Noel. “The reason for this is very simple–bad response to the pandemic. That’s the reason. That’s the only reason.”
Shortages across the United States have included lumber, Styrofoam, microchips and others, but Noel said the biggest one is a shortage of labor.
“It’s hard to find people. The unemployment rate is now what it was before the pandemic,” said Noel, “The problem is there’s very, very many fewer people in the job market in the in the labor force.”
Noel said extended unemployment benefits and fear of COVID have prompted fewer people to get back to work, so much that some have exited the workforce completely through retirement.”
“Why would you just wait to go back for six months or one year when you’re older, and it could be more dangerous? said Noel. “You just retire early, and you’re done.”
Noel said eventually the loss of workers due to retirement will replenish but that it will take several years to replace that group.
Kyle Jacobson, vice president of government relations at Lubbock Chamber of Commerce, said employee shortages have caused applicants to demand higher pay.
“We have seen discrepancies in wages offered by businesses and expectations of workers,” said Jacobson, “I think businesses that we’ve spoken to definitely tried to kind of meet that demand and increase wages to the extent that they can. But sometimes there’s still a gap in expectations there.”
Jacobson despite numerous challenges, Lubbock has done better comparatively to Texas and the U.S.
“I think we’re doing better in our economic recovery locally than statewide and nationally,” said Jacobson. “Locally, we’ve actually got 3000 people added to our local workforce versus February 2020 [and] Lubbock has added 1000 jobs since February 2020.”
Jacobson said surveys done by the National Federation of Independent Business show most businesses anticipate incurring higher prices in products and expect to raise their prices as well.
“Nearly half of businesses, 48 percent are still reporting that they’re having difficulty hiring for open positions,” said Jacobson,” so I don’t think that this is the kind of thing that will be an immediate fix. This could still be another six to 12 months.”
Noel said the best way to help the economy get back on track would be for people to get vaccinated and to continue following COVID safety protocols.
Noel said the United States was one of the hardest first-world countries hit by the virus by far, and it’s one of the reasons why it’s taking the U.S. the longest to recover.
“I’m hoping now that everyone’s made their point about whether or not whose choice it is to get vaccinated. We will do here in this country what is not controversial at all in any other country,” which is get the vaccine, said Noel, “[Let’s] quash the virus and go back to the lives that we want.”