Biden’s vaccine mandate is making America’s most serious economic problem worse

We have exactly one serious economic problem in this country today: not enough Americans are working. President Biden’s vaccine mandate is making the problem worse.

A shortage of labor is disrupting supply chains and boosting inflation, which is eating into middle class paychecks and undermining seniors’ retirement. Rising prices are one reason consumer confidence has dropped over the past three months; if the slump persists, it will ultimately dampen spending.

Another factor hindering our recovery is that there are too few workers. It’s crimping business revenues and small firm optimism. If restaurants and stores can’t hire staff, they miss out on orders and have to shorten their hours. This is happening all over the country.

This is where Biden should be laser focused. Not on spending trillions of dollars on lavish Democratic priorities such as universal pre-kindergarten and expanding Medicare but on helping alleviate the worker shortage and related supply bottlenecks.  

Instead, he is making them worse by directing the Occupational Safety and Health Administration (OSHA) to issue a new temporary emergency standard to mandate COVID-19 vaccination or regular testing for companies with more than 100 employees.

That vaccine mandate is driving people out of the workforce, rather than encouraging them to come back in. This trend is especially concerning as it is benching all-important health care workers.

New York’s largest hospital system, Northwell Health, recently fired two dozen managers because they refused the jab. Thousands more could follow; CBS News reports some “16% of the state’s hospital workers are not fully vaccinated, which means more than 83,000 are at risk of termination.” 

The state is considering calling in the National Guard to replace hospital workers who have been fired. Somehow, that doesn’t seem optimal for patients. In North Carolina, similarly, a hospital system has fired some 175 employees for not taking the shot, in what the Washington Post called “one of the largest-ever mass terminations due to a vaccine mandate.”

Imagine: In the midst of a pandemic, we are losing health care workers.

This is just the beginning. Airline pilots, school teachers, Big Tech workers and employees in many other sectors face being fired unless they get the shots. United Airlines just announced it is set to fire nearly 600 workers who are refusing to be vaccinated.

Companies that are struggling mightily to hire workers, such as Amazon and FedEx, are wary of complying with Biden’s demand, knowing they will have a hard time replacing anyone they let go. While these businesses and others have re-imposed mask mandates, they are not about to further thin their ranks by demanding everyone get the vaccine.

Biden’s vaccine mandates are one reason that our ports, clogged with stacked-up ships waiting to disgorge needed goods, may not be freed up any time soon. There are currently an unprecedented 62 cargo ships awaiting unloading at the Los Angeles and Long Beach, Calif., docks. The back-up, said likely to disrupt $90 billion in trade and possibly cause holiday-season goods shortages, is partly because of the sheer volume of goods being pushed through the supply chains as stores and manufacturers try to dig out from the COVID-related shut-downs. 

But it is also because of a shortage of workers.

Experts fear that Biden’s new mandate will worsen delays at the ports and elsewhere. Jeremy Tancredi, a partner in a consulting firm specializing in supply chain management, told a publication focused on sourcing issues the mandate could have “an undesirable impact” as some unvaccinated workers push back and look for opportunities at companies that are not subject to the same requirements.

Another expert in the field was quoted as saying, “Supply Chains are struggling – high costs, scarce capacity and raw materials, etc. – and the mandate is another constraint to be managed.”

It’s not just firms involved in warehousing and ports that could be further disrupted by the vaccine mandate. Truckers, who already face a serious labor shortage, could also be impacted. The CEO of American Trucking Associations put out a statement saying:

 “ATA, its members and our drivers remain committed to delivering life-saving COVID vaccines, but these proposed requirements—however well-intentioned—threaten to cause further disruptions throughout the supply chain, impeding our nation’s COVID response efforts and putting the brakes on any economic revival.” 

President Biden may think that imposing vaccine mandates will hasten the end of the pandemic. He could be right; certainly the requirement polls well for just that reason. But such requirements are leading to even fewer workers on the job, and that is a problem. Especially when it effects the number of health care workers.

It is not the only White House directive that is keeping people at home, of course.

It has been well documented that the extended unemployment benefits included in the Democrats’ $1.9 trillion American Rescue Plan encouraged folks to stay home. One study reported that “in all 25 states that are continuing the UI bonus, a family of four can currently receive the annual equivalent of more than $82,000 in income—while not working. In 19 states and D.C., the amount is more than $100,000.”   

People are rational. If you can receive the equivalent of our country’s median income while sitting on the sofa, you will probably sit on the sofa.

Those unemployment payments have, thankfully, expired, despite Democrats’ best efforts to keep them rolling. But Biden’s rent moratorium, child tax credits (in the form of generous monthly checks), widespread student loan cancellations and other benefits have also contributed to the “work or no work” calculus. 

These policies may be well intended, but they are not helping alleviate the labor shortage that is hobbling our recovery and complicating supply issues. Biden needs to fix this.   

Biden recently tweeted: “We need to reward work in this country—not just wealth.”

We applaud that notion, and would celebrate a White House that is indeed rewarding, and even encouraging, work. The Biden White House is doing anything but, and it is hurting our recovery.

Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.