As Delta Variant Concerns Continue, NJ Economy is Slowing Down
Earlier this spring, when the New Jersey vaccine program was in high gear, COVID cases started dropping and people started returning to restaurants and stores.
Then when Delta variant arrived in summer arrived, many people started wearing masks inside again and an increasing number of businesses have been rethinking plans about bringing employees back to the office.
Rutgers University economist James Hughes said pandemic concerns will mean that we won't see the same "vigorous growth we had earlier this year."
“The economy is slowing, it’s still moving forward, but it’s not moving as fast as it did during the first seven months of this year, and that’s not surprising,” Hughes said.
He pointed out even though the unemployment benefits extension ended weeks ago, the labor shortage continues.
“I don’t think there’s going to be a mass return to the workforce for people who are outside of the workforce," he said. "I think this is going to be a long term situation.”
Hughes noted there was a big wave of Baby Boomer retirements when the pandemic began, and many workers are now realizing they don’t have to rush back to the same job immediately because there are a lot of employment opportunities with better salaries and benefits.
“We’re going through a real recalibration of the labor market and we’re not going to return to pre-pandemic normals,” he said.
Hughes noted the positive silver lining of the labor shortage “is workers now have much more power now than they had two years ago. There’s going to be an increase in salaries because that’s what it’s going to take to get people back to work.”
He noted this will probably cause prices to rise a bit “but that’s a small price to pay.”
He also said the labor shortage will almost certainly carry over into the holiday season, which will mean even fewer seasonal workers at retail stores than usual, and that could push even more shoppers online, continuing a trend we’ve been seeing for the past four years.