President Joe Biden’s recent vaccine mandate risks handicapping supply chains, shuttering hospitals, driving inflation higher, and leading to yet more empty grocery shelves.
Biden on Sept. 9 announced new mandates to force Americans wary of the COVID-19 vaccine to get their jab, threatening that his “patience is wearing thin”—thin enough that he’s willing to threaten millions of Americans’ ability to feed their families.
He’s also ready to pull essential workers off the critical supply chains that feed and care for American families.
Biden ordered that federal workers and contractors must get vaccinated, with no option to test out, which could cover 4 million Americans. He also mandated that all health care workers must be vaccinated, again without the option to test out, which could affect 17 million health care workers, of whom between 36% and 45% remain unvaccinated today.
The most controversial part of Biden’s mandate is instructing the Occupational Safety and Health Administration to issue an emergency rule requiring employers with more than 100 employees to mandate their workers to get vaccinated or get tested weekly. That could affect some 80 million private sector workers. It would be the first time OSHA has ever mandated a vaccination, and it’s intended to signal to companies that the days are numbered for vaccine choice. This White House is “done with persuasion,” as Reuters put it.
Beyond the callousness of threatening millions of Americans’ ability to feed their family because Biden doesn’t like their health choices, this mandate could affect all Americans by worsening critical labor shortages that are already driving higher prices, breaking supply chains, and leading to shortages on grocery shelves.
If Biden’s mandate forces just 10% of targeted workers to quit, that could mean millions more unfilled positions.
Companies are already desperate to find workers. One New York hospital announced it would stop delivering babies as workers quit over the hospital’s vaccine mandate. A Texas hospital faces closing down altogether as it expects 25% of its employees could quit over a vaccine mandate.
Beyond health care, the National Guard is being deployed to drive school buses in Massachusetts amid a critical shortage of drivers. Amazon is paying $3,000 signing bonuses for warehouse workers, and police departments are paying $15,000. Even fast food restaurants are forced to offer signing bonuses, from $500 at McDonald’s to $1,200 at family-owned restaurants, yet in some places, 9 out of 10 restaurants remain understaffed.
According to the U.S. Chamber of Commerce, more than 90% of local chambers say labor shortages are holding them back, while more than 90% of association economists say businesses are struggling to find workers.
Employers cited labor shortages as a serious problem more than twice as often as COVID-19 itself, while just 1% reported having no trouble finding workers.
Labor shortages aren’t just a business problem; they are breaking supply chains. They were already limping along on baling wire and duct tape before the mandate.
Several weeks ago, The Wall Street Journal detailed shortages at grocery shelves across the country, with grocery chain executives now saying the shortages are as bad as those in the spring of 2020, when hoarding wiped shelves clean.
But this time, it isn’t hoarding; it’s shortages of labor and raw materials. One supermarket chain, for example, regularly receives only 40% of what it orders, down from “well over 90%” pre-pandemic.
Grocery executives already expect shortages to continue into 2022.
Meanwhile, prices are sharply increasing for products in shortage. One Indianapolis pizzeria faced a 60% jump in pepperoni prices in just five weeks.
It’s even grimmer in manufacturing. Many final products use dozens or even hundreds of suppliers for raw materials or services, and a labor shortage at any one supplier can knock the entire chain out.
One survey profiled a Utah hot tub manufacturer who uses up to 60,000 components, many essential to the product so any one can stop the entire chain. Indeed, in the grocery industry, there is already a critical shortage of basic inputs such as resins and aluminum for packaging, meaning the food itself cannot be shipped.
Supply-chain executives lament near-term labor prospects, with one reporting “[p]eople cannot get the labor back, whether that’s working in the warehouse or somebody with a commercial driver’s license.” Meanwhile, the shortages are getting worse: Orders and backlogs continue growing, with some providers now booking out into 2022, citing shortages of parts and manpower.
These growing shortages are driving inflation. Last month, the Bureau of Labor Statistics reported the biggest one-month jump in the prices of staples, such as eggs, bread, and milk since 1974, now rising at an annualized 8.7% rate (0.7% month-over-month).
The rise in meat prices was nearly twice that rate, approaching 20% annualized. Wholesale inflation, meanwhile, rose 8.3% from a year ago, the highest rate since 2010 and following a record rise the previous month.
Inflation expectations are now becoming entrenched among the public: On Sept. 13, the New York Federal Reserve released its survey showing American households expect inflation will continue at 5.2% for this year—a record high for the series—and will remain elevated for at least the next three years.
Indeed, inflation is now the top economic concern among voters across party lines, far outpacing concerns about jobs, inequality, or the national debt.
Federal Reserve Chairman Jerome Powell had warned back in June that labor shortages could drive inflation, saying, “Bottlenecks, hiring difficulties, and other constraints could continue to limit how quickly supply can adjust, raising the possibility that inflation could turn out to be higher and more persistent than we expect.”
Alas, here we are, and now, Biden is threatening to make it worse.
Beyond the appalling spectacle of forcing life-or-death choices on Americans against their will, this administration risks derailing what is becoming a fragile and inflationary recovery.
Biden’s mandate could break supply chains, send prices soaring, and further clear grocery shelves.
By all means, encourage vaccination through education and transparency, but, considering that 93% of vulnerable Americans have already voluntarily received at least one dose, this vaccine mandate is unnecessary as well as economically irresponsible.
Biden should return to his promise to unite Americans, not divide us with reckless threats.
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