The pandemic has left Americans wanting higher wages and increased benefits, National Urban League CEO Marc Morial told CNBC on Friday.

“I feel there is a shortage of well-paying jobs because this labor shortage is at the bottom of the economic ladder,” Morial said on “Power Lunch”.

Meanwhile, the former New Orleans mayor said the situation left employers with two choices. “I think smart employers will be faced with either ‘I pay more wages’ or ‘I can’t keep up with customer demand’.

Seventy percent of the jobs that had been lost during Covid have returned, Morial said, reassuring that the labor market is recovering at a faster rate now than after the Great Recession.

The Labor Department reported Friday that the payroll rose by 850,000 in June, beating a Dow Jones estimate of 706,000. Wages rose 0.3% last month and 3.6% more than ‘a year ago, in line with expectations.

“We have to follow the evidence and the evidence shows that in states, for example, which have removed improved unemployment benefits, job searches are not faster,” Morial said.

Other leaders believe there is more to the labor shortage than wages.

Denny’s CEO John Miller told CNBC on Thursday that the restaurant chain was struggling to fill vacancies due to people’s reluctance to return to work – not a barrier to recruiting.

Suzanne Clark, chief executive officer of the United States Chamber of Commerce, also told CNBC on Thursday that a lack of skilled labor, pandemic-induced government unemployment benefits and lack of access to Child care services and restrictions on work visas for employees have contributed to a nationwide labor shortage.

Morial believes workers, especially women with childcare responsibilities, may have concerns about the risk of catching Covid-19. Concern is heightened especially in states with low immunization rates, where some may wait for better paying jobs or an opportunity to work from home.

He noted that the fall season will be a notable transition period as children return to school and more parents return to the workforce.

Those looking for alternatives to lower-paying jobs without regular pay increases are also showing an interest in self-employment and small-scale entrepreneurship, Morial said.

“One thing that is so clear when I look around the nation is that people are strained with higher rents because there is a housing shortage, stretched because of child care services and of the cost of that, and all of these things create a new post-pandemic reality, ”Morial says.

Post-pandemic reality “demands that employers, others and policymakers understand that there is ‘BC’, before Covid, and there is ‘AC’, post-Covid, and that is AC,” a he declared.