Labor Shortages Continue as Bigger Paychecks Fail to Lure People Back to Work

The so-called “great resignation” is continuing to compound an already tight labor market as people reconsider career paths following the unprecedented worldwide impact and economic fallout of the COVID-19 pandemic.

Amazon Chief Financial Officer Brian Olsavsky told Financial Times that for the “foreseeable future,” its problems meeting demand have more to do with labor, something that is “new and not welcome.”

Norfolk Southern’s Chief Operating Officer Cynthia Sanborn said retention is another issue, with attrition escalating in the past two quarters of 2021.

See also: Retailers Lean on Employees to Do More Amid Labor Shortage

Employers started tackling the issue by upping wages, with Costco, for example, now offering a minimum hourly wage of $17, and Starbucks, McDonald’s and others following suit.

Despite higher wages, McDonald’s CEO Chris Kempczinski said the company is still short-handed and had to reduce late-night hours at many locations.

“I think it is going to continue to be a difficult environment for the next several quarters,” Kempczinski said.

The world’s largest restaurant chain by revenue, McDonald’s passed the cost of higher wages onto consumers, just as Kimberly-Clark, Kleenex and other major brands did. McDonald’s anticipates prices in 2021 will be 6% higher than last year.

Read more: Higher Wages Not Top Reason Workers Take Jobs

Shortages in the workforce are piling on to existing problems retailers are facing, like manufacturing and transportation delays. Inflation in commodities like steel have also added to the increase of consumer prices.

The National Retail Federation issued a statement last week that vaccine mandates could make the labor shortages even worse, calling it a “politicized debate” that could negatively affect the holiday shopping season.

Some companies tapped automation to deal with the lack of workers. Waste Management Chief Operating Officer John Morris said the move is a “de-risking mechanism” because the job market now is different and some positions “don’t attract the interest they previously did.”