Conference Board proposes policy changes to address worker shortfall
To alleviate the U.S. labor shortage, lawmakers should consider various measures such as tax incentives, increased childcare support and immigration reform, according to a Monday report by nonprofit business group The Conference Board.
The U.S. needs to add about 4.6 million workers annually, the report said, about four times the average rate over the last decade. The pandemic left the economy with 3 million fewer workers as many older people left the workforce, while the longer-term impact of an aging population continues to leave its mark. Certain professions will see growing demand for workers in the coming years, especially home healthcare, manufacturing and homebuilding, according to the report.
“Labor shortages pose a growing risk to US economic growth and competitiveness,” according to a summary of the report. “To respond effectively, policymakers should adopt targeted reforms that remove barriers to labor force participation, increase the supply of workers, and invest in skills development.”
The report proposed more access to the federal earned income tax credit, which subsidizes income for low- and moderate-income families, since research shows the credit helps some people stay in the workforce. Flexible work schedules that were common during the pandemic are also helpful, the report said. Another incentive would be to increase how much money people can retain through the child and dependent care tax credit. The report noted that the average credit in 2020 was $560, while annual childcare costs range from $6,500 to $15,600.
The U.S. government should provide more legal pathways for immigrants who are already here and for those who want to come, especially those in high-demand occupations, the report said.
Another area where reform is needed is occupational licensing, according to the report, which said the amount of training and fees required, coupled with inconsistent standards, make it hard for many people to start businesses.
Recession risks are on pause
The odds that the U.S. and other countries will enter a recession this year are now less than 15%, a survey of corporate leaders found, down from more than 25% in April, research firm Oxford Economics said Monday.
“The large downgrade in growth expectations in the aftermath of April's 'liberation day' tariff announcements has now partially unwound,” the company said in a statement about its latest global risk survey.
The group conducted its survey of 106 businesses between May 28 and June 10, before the recent hostilities between Israel and Iran.
Despite the improved outlook, business leaders’ growth expectations are still below what they were in January. Tariffs continue to be the major concern, the survey found. More than three-quarters of businesses view a global trade war as a very significant risk to the economy over the next two years.
Home goods retailer files for bankruptcy
At Home, a chain that sells furniture and home decor, said Monday that it had filed for Chapter 11 bankruptcy protection and would close 10% of its 260 U.S. stores by the end of September.
The Dallas-based company attributed its problems to pressure from rising tariffs that have contributed to a slowdown in consumer spending. It’s one of a number of retailers that have declared bankruptcy and closed stores recently, including Joann, Forever 21 and Rite Aid.
"At Home is … suffering from the slowdown in consumer demand for home furnishings, which is partly a consequence of low consumer confidence and a sluggish housing market," Neil Saunders, managing director at retail analyst GlobalData, said in an email.
At Home will close stores in 12 states, including eight in California, three in New Jersey, two in Washington, Massachusetts, Virginia, New York and Illinois, and one each in Florida, Minnesota, Wisconsin, Montana and Pennsylvania, according to court documents.
