Billionaire investor and businessman Barry Sternlicht (Barry Sternlicht) warned on Wednesday that the contraction of the US workforce during the Covid pandemic would “weak” the economic recovery.
The founder of Starwood Capital Group, which operates hotels as part of his broader portfolio, said the federal government should pay people back to work instead of keeping them at home.
“The entire service economy is in crisis, whether it’s restaurants, pizzerias, laundromats, or small shops. Amazon can raise wages, no problem,” but mom-and-pop stores can’t, Sternlicht said in CNBC’s “Squawk Box.”
Sternlicht says that sometimes it has nothing to do with money.
For example, he is trying to fill 40 jobs for his 220 employees in a hotel in Brooklyn, New York.
“It’s not even the money we paid. They won’t leave their house or anything they are doing,” he said, emphasizing the low labor participation rate, although there are millions of job openings, “really hurt the United States economy.”
Job vacancies fell to 10.44 million in August, but they are still high in history. The latest job vacancy and labor mobility survey released by the Department of Labor on Tuesday showed that a record 4.3 million workers resigned in August exacerbated the shortage.
Although the number of employed people was much lower than expected, the decline in the unemployment rate in September was due to a small drop in the labor force participation rate. The labor force participation rate is a measure of people who work or are actively looking for work, but with the lifting of the closure and restrictions on Covid mitigation measures, which led to a surge in business activities, the labor force participation rate has not rebounded.
Sternlicht said the government has spent trillions of dollars to help the unemployed and troubled businesses, and it should make further efforts to motivate people to return to work.
“They should actually pay people bonuses to get them back to work, return to the labor market, and get out of federal programs and state programs,” he said. “Then they taxed because they have jobs.”
Sternlicht, who calls himself a social liberal and fiscal conservative, said that the Biden administration “goes too far in the wrong direction. All these support programs…may exacerbate the problem and encourage people to stay.” At home. And this country can’t really operate without its service staff coming back.”
In 1991, Sternlicht founded Starwood Capital — it created the Starwood Hotel, which is now part of Marriott — and other leisure brands. Starwood Capital focuses on global real estate, hotel management and the oil and gas industries and energy infrastructure.