Although there has been consistent recovery in the rate of unemployment since the onset of Covid-19, labor participation has not experienced the same success. In fact, there has been a significant decline with workers in low-wage jobs experiencing a huge drop in employment. And a recent report shows that while low-wage workers have had faster wage growth during the past year, wages are still hugely unequal. The accelerated trend of work automation and digitization in certain industries has also contributed to the issue.

Which Industries This Affects

Virtually all industries that rely on manual labor—restaurants, hospitality, staffing, trucking, and retail—have experienced significant labor shortage issues, many resulting from workers being increasingly unwilling to accept relatively low-wages jobs that expose them to the general public. The availability of extended unemployment benefits and other public assistance has made filling these jobs especially difficult.

Many businesses in these industries have successfully leveraged the Paycheck Protection Program (PPP) and Employee Retention Tax Credit (ERTC) to deal with the economic losses stemming from Covid-19. The PPP provided small businesses with funds to pay up to eight weeks of payroll...

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