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“The unemployed must be treated as a potential to be realized, not as a problem to be solved. “
David Lammy, British legislator
Hello Aval,
What is happening?
COVID?
Extent of unemployment?
Laziness?
The “big retirement?
Or something else?
We’re all seeing the fallout – something we’ve just never seen before: Businesses struggle to find help.
From restaurants to manufacturing to trucking, signs are everywhere, literally: Help Wanted.
In fact, companies have become so desperate that they have lowered their hiring standards and increased their signing bonuses.
And that’s on top of unprecedented starting salaries for what were previously entry-level jobs filled by high school students looking for that first paycheck.
The ramifications of the problem can be found in the closed dining room of our neighborhood McDonald’s, as well as in the long drive-thru queues – and longer waits for food.
The simple truth is that there are not enough workers on the inside to meet the demand on the outside.
So what is going on?
Unfortunately, what we think we know is anecdotal; of course there are surveys and one-on-one interviews, but for the most part we just don’t know.
For example, in a recently released survey, the Michigan Restaurant and Lodging Association reported that 87% of Michigan operators say they don’t have enough employees to meet existing demand.
As a result, eight in ten cut their hours or closed part of the day.
The same survey also indicated that 81% of hotels have limited rooms due to a lack of staff to clean them.
Unsurprisingly, understaffing has led 49% of owners to report that their restaurants are less profitable today than they were three months ago.
And 43% said their restaurant’s business conditions were worse than three months ago.
But why the shortage?
Well, some business owners – from all industries – are complaining that the shortage of applicants could be attributed to the improved state and federal unemployment insurance that many workers benefited from when they were made redundant last year.
The problem is, for the most part, those benefits have ended, so it can’t be that anymore.
And sure, high school kids always want money in their pockets, so I guess they’re always looking for work.
(Our local Kroger is full of young people who stock shelves, herd carts, take care of bottle returns, and usually do the job.)
Oh, and don’t forget the elderly (like me) who often wanted to either top up their Social Security checks or just needed to do something outside the home.
They don’t register either.
So, is it COVID?
Certainly, some workers are nervous about returning to work; I know of an international company whose employees have been working from home since last year.
And this company is monitoring things – state by state – to see when (and if) their employees can return to the office.
Of course, a byproduct of this has been a temporary drop in the occupancy rate of office buildings which many fear could result in permanent downsizing of offices in Detroit and across the country.
Why?
Because these companies have learned that their employees can be just as productive without going to the office every day.
I think the decisive moment will come once we’re on the other end of this pandemic – possibly next spring, experts say – when offices could reopen.
But don’t do it.
Yet this is only a sidebar to the central story of worker shortages.
According to a summer survey conducted by Indeed, there are a number of reasons people cite for not looking for work.
Yes, unemployment insurance and COVID fears are reasons, but also the need to care for children who are still out of school, to have the financial cushion not to work – and to have a working spouse.
Of course, all of these reasons are good if someone says so, but I suspect the big two are COVID and are taking care of the kids.
In fact, ask any working mom why she hasn’t returned to work and she’ll just say she couldn’t: COVID for all of their children.
Yes, there are those who can afford not to work, but these people have always been there, so this is nothing new.
And have a working spouse?
Well, who hasn’t in the past four decades? My wife and I worked our entire lives until we retired.
Which, of course, now puts us in that category of financial cushion: We’ve saved for retirement, so we don’t have to work.
But I always do consultancy at the same time, which brings me to another unique change in our society: the growth of the “gig economy”.
Musicians have known this term throughout their careers: performance professions that constantly change from one place to another, from week to week or even from day to day.
But now gig work is defined by freelance graphic designers, freelance copywriters, handymen and even delivery specialists – through services like Grubhub and DoorDash.
(One of our grandsons makes money by delivering food when he’s not on time for his regular job.)
And then, of course, there’s the underground economy that’s been around forever: People are paid illegally – often for full-time work, minus benefits.
In the short term, such work can be relatively lucrative, but in the long term, the lack of benefits – and especially the inability to save for retirement in a qualified plan, such as a 401 (k) – could have consequences. disastrous for an entire generation.
I have already written about the lack of workers and the simplistic critique of the problem: In June there were 10.1 million job vacancies and 9.5 million unemployed.
This means that there should be more than enough applicants to fill these positions.
Except.
Except that the jobs, requirements, skills and career paths of these openings just don’t automatically match those who are unemployed.
In short: what if there were 10.1 million waitress jobs?
These 9.5. millions of unemployed women are teachers.
Yes, you just can’t match one set of numbers (demand) with the other (supply).
In fact, a report I read explained the disconnect this way: “… the daunting logistics of matching millions of jobless people with millions of openings.” “
So where does that leave us?
Frankly, I don’t know – and I would like to know what you think is the problem.
And the solution.
If you are a business owner looking for workers drop me a line.
If you are unemployed (or even underemployed) and not actively looking for a job (or a new job), drop me a line.
Unfortunately, we have time to figure this out: according to Moody’s Analytics economist Dante DeAntonio: “Labor shortages will start to diminish… this fall, but it will not be an immediate solution. It could well take place over two, three years.
At that point, let’s hope COVID is in our rearview mirror, schools are back in business – and businesses in general are finally able to fill the gap in their workforce.
Otherwise?
Then we’ll have bad times ahead.
Craig Farrand is a former editor of The News-Herald newspapers. He can be contacted at [email protected].
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