What's with the worker shortage? Ben Casselman takes a crack at explaining:
Conservatives have blamed generous unemployment benefits for keeping people at home, but evidence from states that ended the payments early suggests that any impact was small. Progressives say companies could find workers if they paid more, but the shortages aren’t limited to low-wage industries.
This is true, and it's very peculiar. It's one thing for McDonalds or Target to have trouble finding workers, but even unionized workplaces with pretty good pay and benefits seem to be having trouble. Onward:
Instead, economists point to a complex, overlapping web of factors, many of which could be slow to reverse.
The health crisis is still making it hard or dangerous for some people to work, while savings built up during the pandemic have made it easier for others to turn down jobs they do not want. Psychology may also play a role: Surveys suggest that the pandemic led many to rethink their priorities, while the glut of open jobs — more than 10 million in August — may be motivating some to hold out for a better offer. The net result is that, arguably for the first time in decades, workers up and down the income ladder have leverage.
I guess. But two-thirds of the country is now vaccinated, and it's higher in some states than others. But do states with high vaccination rates have less of a worker shortage? I've seen no data to suggest that.
As for savings, that's a pretty reasonable suggestion. However, personal savings have largely been used up by now and there's still a worker shortage.
Finally there's all these people who are "rethinking their priorities." I hope Casselman will forgive me for thinking that this is a very upper-class New Yorkian suggestion. The vast, vast majority of ordinary middle-class workers are almost certainly not rethinking anything except the need to put food on the table.
One subcategory of "thinking their priorities," however, could plausibly be women who have decided to stay home and care for their children rather than return to the paid workforce. But that doesn't really pan out either:
Women have dropped out of the workforce at a slightly higher rate than men, but even that small difference is only due to a blip in September. In August the numbers were nearly identical.
So we still have a mystery. But it just might be one with a silver lining. If workers were piling back into the workforce, it's possible that the economy really would be overheating, with dire consequences in the year ahead. Conversely, if they return slowly, the economy might continue on a strong but sustainable growth path. Just possibly, this might be a good mystery, not a bad one.
A lot of service industry workers weren't put on leave; they were fired outright. It's not a matter of "reactivating" the workers on leave. It's getting them to reapply for their old jobs, you know, the ones that fired everyone without ceremony or much notice...
Now, the theory I like is the reliance on automated filters on job readers being set too strict, so you get 200 resumes, filter out 200.
The conspiracy theory is that employers aren't hiring, so they can continue to complain and then force workers to take lower salaries.
I think the 2020 Covid shut down gave people the opportunity to look at how they spent their money. For example, eating out many times a week is incredibly expensive. Going out to movies and concerts is also expensive. The same with partying at bars.
All of these are optional activities and I think partly done out of habit. Not doing them for many many months showed us just how much money we actually spend on them.
The same goes for buying/leasing new cars every couple of years. Again, really expensive, and for what, the new car smell?
Making a decision to cut back or cut out many of these activities allows families to save lots and lots of money. Maybes even enough to allow one parent to stay home. So, they are out of the labor market by choice, a financial choice many didn't realize the could make until the pandemic showed us.
This. And not everybody has forgotten about the Great Recession. There are plenty of places where you don’t need a 6 figure income to maintain a 20-40% savings rate and still enjoy a nice standard of living. In the last decade it’s pretty straightforward how someone who invested and saved at a decent level could have a few years worth of expenses saved.
👍👍👍
At the same time as workers disappeared from certain statistical measures, we also see that new business formation exploded.
Due to data lags it may take another year or so to piece together....but this increase in new businesses is likely a significant missing piece of the puzzle.
What happens when millions decide to shrug? (ducks…)
Once again, we are having inflation for reasons that are not "overheating": (1) supply (e.g. computer chip) shortages and supply-chain problems; and (2) people spending a lot. These things have arisen because of the pandemic, not because the economy is in an out-of-control boom (it is nowhere close to such a thing). Despite claims that the stimulus money has run out, factor (2) shows that it hasn't done so yet. But it won't last forever unless new stimulus is passed. Part of the supply-chain and other inflationary pressures are due to lack of labor, such as truck drivers to get the containers out of the ports. Obviously if more workers in such areas come back on the job that will help alleviate price pressure from lack of supply. Labor force participation (FRED: CIVPART) has come down considerably since around 2000 but that has not resulted in major increases in wages.
At this point higher wages are not really a factor in inflation - the money is still from the stimulus. There are many other factors and political and economic events that might influence inflation, but framing it in terms of "overheating" is not even an oversimplification, it is wrong.
At this point higher wages are not really a factor in inflation...framing it in terms of "overheating" is not even an oversimplification, it is wrong.
True. Wages are going up, BUT...
1. Wage growth is still slower than inflation.
2. Wage growth is not keeping up with productivity growth either.
https://www.nytimes.com/2021/10/15/opinion/inflation-workers-productivity.html
The winner in this (sort of) post-pandemic economy has been employers, not workers. Businesses are welcome to raise pay more if they have a real "worker shortage." They can do that and still be ahead.
A lot of the talk about inflation and overheating and the mystery of worker shortages is excuse-making by the management class for why it won't pay more.
The real mystery is italics without tags. Where did that come from?
For me its always OE
Operator Error
Though having less workers may be a good thing on some sectors, having less people being productive is a net negative to the overall economy in the long term. Everything else is piffle.
The 'if we can't (or wont) measure it, it doesn't exist' approach to the economy, productivity and well being leaves much to be desired.
*fewer
I think there's a combination of things that has driven this
First the stock market has propelled many people's 401K's and investment portfolio's higher than they expected. This affect things 2 different ways
- 1 the MOST obvious. People have enough $ to retire early. Are investment portfolio's past of savings? that is a key question
- 2 there have been almost 400K applications for business licenses nationwide since the pandemic hit. That is a drop in the bucket but if my #1 reason is right that would add to people starting at home businesses.. So that engineer who is 60 has his company shut down or lay him off looks at his portfolio and realized he can open his own engineering consulting firm. Work when he wants, where he wants. Takes advantage of tax breaks along the way until he hits 62 or 65 if his business is successful.
But again, as pointed out in previous postings. JP Morgan had estimated that the workforce aged between 64 and 71 would have had upwards of 13M people in it PRIOR to the pandemic. Those people MAY have retired but we don't know it yet because Social Security works on the federal fiscal year which runs from Oct 1 through Sept 30 the following year. This means that from last sept of 2020, through native CV, through Alpha and Beta variants and Delta anyone who retired early has not been tallied as yet. We just don't know that number yet, but I suspect its enormous.
And a 5.9% increase to Soc Sec may KEEP people on the sideline, next year
They retired. For men, that is absolutely the case.
It's still an available affordable child care issue. Compounded by the fact that a child can be required to stay at home for a week or two if potentially exposed to covid. Maybe after Grandma gets a booster, things will get closer to normal???
The latest Covid wave still has to fully run its course.
There does seem to be some artifacts in reporting numbers. The CDC number for PA vaccinated is >75%, and you see that on CovidActNow. But, if you look at the county data, the best one is Montour at 71% (and only 18K population)--and that value is consistent between CovidActNow and the PA dashboard.
hmmm....
It's running it's course.
********COVID NEWS****************
https://www.businessinsider.com/delta-variant-covid-ay42-under-investigation-uk-2021-10
England has their hands full
...............Scientists worldwide are closely tracking a descendant of the highly infectious Delta variant that's spreading in the UK.
England's public-health authority said in a report on Friday that it was monitoring a subtype of the Delta variant called AY.4.2, which had infected more people recently.
Francois Balloux, the director at the University College London Genetics Institute, tweeted on Saturday that data about AY.4.2 suggested it could be 10% more transmissible than the most common Delta variant in the UK, called AY.4...............Dr. Jeffrey Barrett, a medical genomics group leader at the Wellcome Trust Sanger Institute, tweeted on Tuesday that AY.4.2 was the only Delta descendant that was steadily increasing, which suggested a "consistent advantage" over Delta. ....................The virus that causes COVID-19 gets about two new mutations per month, and there are now 56 Delta descendants, showed Scripps Research's Outbreak.info, which includes data from the Centers for Disease Control and Prevention. Before AY.4.2, PHE tended to group Delta and its descendants together..........
{snip}
To show you how slow the news travels at times
Newsweek is already reporting 8 cases in 5 states here in the U,S,
But in the UK they don't sequence every positive test.
"As of September 27, 6% of UK sequenced tests were AY.4.2"
The key of course is how many tests get sequenced. They are terribly unsure
But given the waning immunity, and those that got vaccinated FIRST were those with compromised immune systems already and you can see why this is going to remain such a problem.
In MN we have 75% of our eligible population vaccinated with at least one dose and the coronavirus continue to throw up 3k+ new cases a day. Damn right it is scary to go out there
Cases don't matter. It's actual active sickness, which is barely a blip. At some point retards like you will get it. Hospitalization is moving below the 2020 summer top.
Faucci said early in the pandemic.
The MORE people that have it the more mutations can occur. We (HE) got spoiled by the low transmission of Native CV, Alpha and Beta. Our cases started to drop just as the vaccines started rolling.
But STILL - the anti vaxxers and natural immunity folks clung to the notion that getting it and getting over it was the BEST course of action. Sorry that was wrong. We wanted herd immunity against Native CV which didn't work against delta. now we have a 60th mutation *******just of the Delta variant alone********** that is reportedly 10% MORE transmissable! And the age group of those affected are now the younger group - from school age to peak working age.
https://www.wpxi.com/news/trending/natural-immunity-vs-vaccination-which-fights-off-covid-19-best/TMEDXOW2DBFNJA2C3ZGPVFC5AM/
Some Snips
............According to the study, a combination of natural immunity with two doses of the mRNA vaccine is likely to produce a strong immune response and may last longer than vaccination alone...............However, researchers know that some have developed COVID-19 more than once, leading scientists to wonder how long natural immunity from the virus lasts.
According to some researchers, if a person is unvaccinated, reinfection from the virus could happen as soon as three months after contracting the virus. Additionally, scientists do not know how severe or lasting the illness must be to create enough immunity to fight off the virus if the body sees it again........“Reinfection isn’t really the critical problem for COVID-19. Instead, the *****most important point is severity of infection******. If previous infection protects from serious disease developing, it becomes less important to the individual if they get infected a second time,” Dr. Alexander Edwards, associate professor in biomedical technology at the University of Reading in the United Kingdom told Medical News Today.
“However,” he continued, “for COVID-19,********** we still don’t know if previous infection will fully protect from severe disease and death for everyone.”************
{Snip}
I GET IT. Some people just WANT to believe Trumpublicans were right about something. They want desperately to cling to the notion that we don't have to do anything. Just get the disease. Natural immunity will protect you.
While people die almost a MILLION American deaths - some of which could have been prevented.
EVERYONE Should get vaccinated whether or not they've had covid previously. There's now too much info out there to deny it. Vaccines work and we can measure their effectiveness. Getting the disease works too but even that protection is wearing off.
But right now the majority of the research indicates that a combination of both natural and vaccine immunity is the BEST course of action. I hope every employer starts a vaccine mandate.
Why?
Because think about it. Delta has undergone 60 mutations alone. WE hae other variants out there including Mu, which interrupts the long term "memory" (for lack of a better word) that the body uses to fight off new variants.
We've had 60 mutations of Delta since July.
Get the shot. Get it as often as you can until this disease stops spreading as rapidly as it CURRENTLY is.
Faucci was right, Trump was wrong, Jared was wrong, DeSantis was wrong, and by God that idiot Navarro was wrong
Mutations get weaker. Follow the evolution of OC43 in the 1889-99 period. Fauci also downplayed it as a low grade pandemic before Moderna vaccine came out. Get the shot. Your still going to have outbreaks until it runs its course. Natural immunity has benefits like the vaccine. That is science.
My household makes almost exactly the household median salary in the US. We are still pretty far from “middle class”, but certainly not worried about putting “food on the table”. My guess is we could easily cut back an absurd amount of money spent on non necessary items and activities.
My guess is only the poorest section of people has to seriously worry about “putting food on the table” and paying bills. What percentile do you think unnecessary spending starts to really take hold? It’s probably the bottom quintile max. Which would leave 80% of homes able to see some kind of serious drop in income and still not have to worry about affording food. I’m 100% sure it’s not just “rich New Yorkers” or whatever Mr. Porsche and American flag seems to think that are reconsidering working shit jobs for shit money just to spend it on dumb unnecessary garbage.
I think it's a combination of retirement and women leaving the workforce. We saw some of this in the mid-late 2010's.
KD: If workers were piling back into the workforce, it's possible that the economy really would be overheating, with dire consequences in the year ahead.
It doesn't work like that. If workers were "piling back into the workforce", they would have more money to buy more stuff, but they would also be producing more stuff to buy. And businesses wouldn't be hiring, i.e. accepting those pilers-in, unless they had reason to believe they could sell that stuff. Unless some disturbance occurred, supply and demand would continue in rough balance, and there would be no reason for 'overheating'.
There are no stories of genuine suffering due to lack of employment. Everyone who wants a job has a job. Everyone with half decent skills and abilities has made the move to a better job (or is in the process of doing do). And lots of upper middle class folks in their late 50s and 60s have retired.
This is what full employment looks like. Why are we complaining?
Justin, we basically agree. I fleshed out the reasons why many people have left the job market. Adding in those who are in their late 50's and 60's adds to the rest of the story.
So, no, there are not lots of people sitting at home waiting for the perfect job. They simply don't plan on re-entering the job market, at least at this time.
Where I work, there were lots of folks who retired. I'm now among the oldest of my peer group. One guy is retiring in November and the other guy is about my age. Then there are 30 or so people in their 20's. It's been a fascinating purge of the older folks. Among certain upper middle class professionals, retiring in your late 50's is a thing now.
And I wonder about this too:
HONG KONG, Oct 20 (Reuters) - Bitcoin hovered below record levels on Wednesday, the day after the first U.S. bitcoin futures-based exchange-traded fund (ETF) began trading, a development that market participants say is likely to drive investment into the digital asset.
There are gamblers out there who play in this stuff. Are day traders back?
THIS is the reason for imposing a tax on financial transactions.
Even a minimal tax would slow down day trading
**************MORE UK COVID NEWS**********
https://www.cnbc.com/2021/10/20/uk-doctors-call-for-return-of-covid-restrictions-new-mutation-watched.html
{snip}
Officials at the NHS Confederation, which represents organizations across the U.K. healthcare sector, issued a statement calling on the government “to introduce measures, such as mandatory face coverings in crowded and enclosed spaces, without delay to keep people well and avoid the NHS from becoming overwhelmed this winter.”
They warned that the National Health Service “is seeing worrying increases in coronavirus cases in its hospitals and the community at a time when it is preparing for a busy winter period, its staff are close to burnout, and it is being expected to recover many of its services that were disrupted by the pandemic.”
The U.K. is currently recording between 40,000 and 50,000 new Covid cases a day and the number of hospitalizations and deaths is steadily rising, although at a much lower pace than earlier in the pandemic thanks to Covid vaccines, which greatly reduce the risk of severe infection, hospitalization and death.
{snip}
Now, we all know this already. We knew that the more people that have the disease (serious case or not) the more likely the spread and MORE IMPORTANTLY the better the chances of a new mutation.
The knuckle draggers that believed in natural immunity were wrong
The vaccine proponents were wrong
This is an ONGOING issue and the new Delta variants are showing signs of increasing hospitalizations and serious cases
Another portion of the article
{snip}
Noting that hospitalizations and death rates were much lower than in previous peaks of the pandemic, he added that “we are learning, I think, to live with the virus.”..................this is absolutely correct as far as what we know about COVID right now. Immunity does work on the known variants - but further in the article..................“Because delta has now been the dominant mutant in several regions for some six months and not been displaced by any other variants, the hope has been that delta perhaps represented [the] peak mutation performance achievable by the virus. AY.4 may be starting to raise doubts about this assertion,” he warned.
Duh.
We can go back in time to look at various other respiratory diseases to get ideas on how they work and spread.
But we are talking a living thing here. It changes, it morphs into something else from time to time. Historical references are great but we are saddled with the knowledge of THAT day (say spanish flu of WWI), along with recordkeeping details of that day. Even today everyone KNOWS we are under counting cases, and deaths because of the bizarre health system we have here.
By the time we see the nest big variant with increased transmission we may be faced with the fact that our assertions that viruses cannot get any stronger through mutation, may be wrong.
Delta spread to the US from the UK from what I have read.
No one should be considering dropping masking or vaccinations.
The problems with COVID are two fold
1 - due to the number of deaths we are faced with isolation, and quarantine when people gets diagnosed with it. From a workplace perspective a minor case of CV is just as bad a serious one because the employee is MISSING
2 - Due to our globalization and intertwining of economic activity when a country like China initiates a zero tolerance for COVID they then shut down manufacturing and shipping which we all know is wreaking havoc with our economy. Now when they re-open they ship a boatload of stuff and we can't off load it and transport it fast enough because of our anti-inventory, just in time manufacturing thought process in the last few decades
THIS is why mandates are needed.
Employers need them to keep employees on the job.
Health care providers both private and government sector need them to keep THEM on the job protecting others
The problem with herd immunity is that it is anti business.
If I were running say, Smithfield packing with 3500 employees elbos to elbow you would be required to be vaccinated and given a booster after 4 months. AFter that, I would base further shots on available knowledge of how long the booster is effective. The Israeli's are on shot #4.
Or you get fired. IT's a simple as that. I provide 3500 jobs and cannot worry that 35 of them might be exempted and therefore be a source of a problem - You done; know which variant they may or may not be carrying.
Sorry about that, but its true
This reminds me of traffic here in Atlanta. Traffic on our freeways always runs at 100% capacity. But if there is a major accident anywhere blocking lanes, the entire traffic system shuts down.
For the last 40 years the pressure on employees has been turned up bit by bit: layoffs after layoffs with more and more work put on the shoulders of those that remain, automating and hence frustrating customer complaints leaving only poorly paid service employees to take the brunt, plus 2 percent raises (3 if you're an incredible employee). It got to the point where employees were at 100% capacity for what they could stand.
Then came covid. So, all you were doing but now you may be in danger, you get threats from customers when you try to enforce mask ordinances, you are home dealing with kids while working and it is now more than you can stand. The thought of going back to what you were barely enduring in good times but with this going on seems impossible. And the system shuts down.
I think a significant reason why businesses are having a hard time finding workers (and job seekers are having a hard time finding jobs) has everything to do with the automated processes associated with looking for work. HR has gotten to the point where they've automated the search process, using "standard" terms they prioritize but which many (most?) job seekers do not know and therefore don't use. Well qualified job seekers are constantly passed over by a search process that cannot do anything more than scan a resume.
How do I know? I have nearly 30 years of management experience and an MBA, and yet consistently receive automated e-mail rejections even for jobs that I've done (or are doing right now). This doesn't happen if an HR professional is reviewing this information. Multiply that experience by 10 or 100 or 1000 as a job seeker continues running into barriers and it's not hard to understand why job seekers quit looking, and certainly easy to see why a company isn't finding the right people (or really anyone).
Yes, COVID is an issue but not like it was last year. I really think the process of finding an employee is ground zero for this.