The shrinking US workforce during the Covid pandemic will “cripple” the economic recovery, warned billionaire investor and businessman Barry Sternlicht on Wednesday.
The founder of Starwood Capital Group, which operates hotels as part of its broader portfolio, said the federal government should pay people to go back to work rather than stay home.
“The entire service economy is in a crisis, regardless of whether it is a restaurant, a pizzeria, a laundromat or a small shop. Amazon can raise wages, no problem, “but mom and pop stores can’t, said Sternlicht in CNBC’s” Squawk Box “.”
Sternlicht said sometimes it’s not about the money.
For example, one of its hotels in Brooklyn, New York, is trying to fill 40 positions with its 220 employees.
“It’s not even what we pay for. They are not going to leave their house or whatever they do,” he said, emphasizing that the low participation rate while there are millions of jobs “really hurts the downside of the US -Business.”
The vacancies, which fell to 10.44 million in August, are still historically off the charts. The latest labor ministry survey of job vacancies and labor turnover, released Tuesday, showed the shortage was compounded by the record 4.3 million workers who quit their jobs in August.
The fall in the unemployment rate in September, despite a much weaker than expected hiring, was due to a slight decline in the employment rate. The labor force participation rate, a measure of people at work or actively looking for work, has not declined as business activity has increased with the lifting of closures and restrictions to contain Covid.
The government, which has spent trillions of dollars helping the unemployed and troubled businesses, should focus all further efforts on incentivizing people to return to work, Sternlicht said.
“You should really be paying people a bonus when they get back to work and back into work, outside of federal and state programs,” he said. “Then they tax them because they have a job.”
Sternlicht, who describes himself as socially liberal and financially conservative, said the Biden government was exaggerating “in the wrong direction. All of these aid programs … can make this problem worse and encourage people to stay home. And the country cannot really function without its service people back. “
In 1991, Sternlicht founded Starwood Capital – which became Starwood Hotels, now part of Marriott – as well as other leisure brands. Starwood Capital focuses on global real estate, hotel management and the oil & gas sector and energy infrastructure.