All over America “help wanted” signs proliferate. Radio and television ads promise big bonuses, satisfying benefits, and career advancement. There are fewer takers than anyone expected. Is this simply anther pandemic supply dislocation, or is there something deeper going on within the American labor force?
As of last week, there were 9.2 million unfilled U.S. job openings, according to the U.S. Bureau of Labor Statistics, while the number of unemployed stood at 9.5 million. And contrary to the hysterical claims of Republican politicians, enhanced Federal unemployment benefits are not the cause of this imbalance.
A month ago, I wrote a column advising company managements that the fastest way to beef up their employment numbers was to simply increase wages. Rather than do that, many corporate managements are playing the “bonus” game. Raising an employee’s salary is a long-term cost, while paying a bonus is a one-time hit to the bottom line.
But employees have long since figured out that a bonus is not worth that much in the grand scheme of things. At best, it may help out by paying down a credit card bill for a month or two, but after that, it’s back to the same old which-bill-to-pay status. If you are a full-time, minimum wage worker, the truth is that you cannot afford to pay the monthly rent anywhere in the United States, so go stuff that bonus.
But the problem goes deeper than bonuses. There is a mismatch today between the skills and salary that employers are looking for, and those the work force has to offer. Openings are high in sectors such as retail, leisure, and hospitality, which are traditionally low-paying jobs. Those looking for work may be coming from different, higher paid employment in areas like the airlines.
Demographics are also playing a part in this great mismatch. As the country responded to the pandemic by shutting down offices, workers did what they could from their home. The work-from-home trend sparked an exodus from urban to rural areas, especially to the southwest. That created a boom in job demand in areas where workers were not that plentiful.
These relocated workers have discovered the benefits of rural (and cheaper) living at the very time that the big cities are opening back up and desperately seeking workers. In the cities, employees are quitting jobs that offer the same old status quo of the same pay, round-trip commutes, crowded office locations, and little flexibility in when and how long to work.
All of the above reasons have resulted in a grass roots rethink of American working conditions, in my opinion. After 30-plus years of declining working conditions, static pay, and higher living costs, the pandemic has shaken American workers to the core. It was the proverbial straw that finally broke their backs.
Loyal workers were discharged by the millions in the face of the pandemic. That is pretty scary considering that most U.S. health insurance coverage is dependent on continued employment. Those in essential sectors (think healthcare, meat processing, supermarkets) were expected to show up for work, while facing enormous health dangers (without protection, in many cases). Working conditions, both at home and in the office or factory floor, were difficult at best and few companies were offering extra compensation for workers’ added efforts.
On the plus side, the pandemic brought home that maybe “the job” was not the most important thing in life. Many workers evaluated the health risks they brought home every night to their families and opted out. For me, although I loved my work in the asset management business (an essential service), I loved my life even more, which was why I retired.
Over the last 18 months, workers have had time to reflect. Many workers discovered that they could still function (even prosper) at work when hours and location were flexible. Today, they can actually search out their best options, choose where they want to work and negotiate a better wage. For some, taking a few thousand dollars less a year in order to work from home, or in a better location, is an option they believe they can afford. I say good for them. It has been a long time coming.