Billionaire investor and entrepreneur Barry Sternlicht warned on Wednesday that the reduction in U.S. labor during the Kovid pandemic would “disrupt” the economic recovery.
The founder of Starwood Capital Group, which manages hotels as part of its broader portfolio, said the federal government should pay people to get back to work, not to stay at home.
“The whole service economy is in crisis, it’s a restaurant, a pizzeria, a washing machine, a small shop. Amazon can raise wages, no problem,” Sternlixt told Squawk. The box. “
Sternlixt says sometimes it’s not about the money.
As an example, one of his Brooklyn hotels in New York is trying to fill 40 employees with 220 people.
“It’s not something we pay for. They don’t leave their homes or the jobs they do,” he said, noting the low workforce and the fact that even though millions of jobs have been created, “it really hurts the internal organs. conveys. ” The U.S. economy. “
Vacancies, which fell 10.44 million in August, are historically off schedule. A Department of Labor survey released on Tuesday on job vacancies and turnover showed that a record 4.3 million workers were laid off in August.
The decline in the unemployment rate in September was much weaker than expected, but the labor force participation rate declined. Labor activity, which is a measure of people working or actively looking for work, has not declined, as business activity has increased with the closure of the Covid mitigation and the removal of restrictions.
The government, which has spent trillions of dollars to help the unemployed and businesses, should focus its next efforts on encouraging people to return to work, Sternlixt said.
“They actually have to pay people bonuses for federal programs and state programs because they’re back to work and back to the workforce,” he said. “Then they pay taxes for having a job.”
Sternlicht, who describes himself as a social liberal and financial conservative, said the Biden administration is “overdoing it in the wrong direction. All of these aid programs … can exacerbate the problem and encourage people to stay home.” . And the country can’t really work “without serving the people”.