JCTF Insight: What’s going on -“Help Wanted” by Jonathan Drapkin, Hudson Valley Pattern for Progress
Your eye, word of mouth, newspaper stories tell us there is not a sector that is not looking for employees. I just came back from Cape Cod, Massachusetts and if the business was open, 50% were looking to hire. This weekend’s New York Times and Wall Street Journal (always good to read them both)and just about every other media outlet ran stories on the national job numbers for April not being as robust as hoped for and that everyone is looking for help.
But the question is why?
8.2 million jobs have been lost since the beginning of the Pandemic. The unemployment rate ticked up to 6.1% with more people returning to the workforce but not finding a job. Millions of jobs available and millions unemployed. Huh?
The most often explanation offered is that the additional unemployment benefits have led to mainly low end wage earners not returning to work. The argument seems simple enough. If you earn let’s say $600 a week for being on your feet but earn at least that much by staying at home and collecting at the same or more….. Why return to work?
Human nature suggests that for some this indeed is the explanation. But remember technically if you are receiving unemployment insurance and have the ability to return to your old job or have been offered a new one, it is illegal to continue to collect benefits. (Remember that in many states this requirement was waived during the height of the Pandemic). But let’s assume there are not enough labor department employees to follow up on every person receiving benefits and there are people gaming the system.
The problem is that this explanation is too simplistic. And come September when the extra benefits are scheduled to run out, this argument goes away. In fact, I have been suggesting to employers that they might suggest that if you want to ensure that you have a job to come back to you may want to return to work before the mad scramble for employment occurs (assuming this argument is indeed the majority of why employers cannot find workers.
For the Hudson Valley, we are starting the surge of visitors and larger employers are looking for hundreds of workers and of course, smaller employers are equally stressed.
The changing nature of work and the workforce itself means that if you put the economy in a coma and then tried to revive it, there are many things that are at work at the same time. Here is a partial list of just of the dynamics that are occurring within the new workforce.
Warehouse distribution jobs increased. They pay more per hour. So there has been a shift of where a worker is returning to work.
The workforce participation rate has dropped dramatically. It has ticked up slightly in the last two months. But for the following reasons (and this list is not exhaustive) people are not returning to their job.
Burnt out from past 14 months and cannot go back
Had enough years in and decided to retire.
Over 2.0 million women have not returned to work. While many function as the primary child care giver some cannot return as their school age kids are not fully back in school
There is no job to return to. Automation is increasing. So in the past 14 months many sectors have found a technological solution to hiring back all their employees (including restaurant workers – many restaurants have moved to bar codes to order food)
The mismatch in skills. This existed before the pandemic and has only gotten worse. The ability to retrain and upskill workers has only gotten more difficult.
Certain sectors rely heavily on allowing temporary work visas (The Cape is a good example). So are summer camps. Covid is at its all-time high for the number of cases around the world. The issuance of these visas has been significantly impacted.
Supply chain issues (e.g. lumber and chips) has slowed certain sectors need for employees. Demand for car sales is up but cars use lots of chips. During the Pandemic car purchases slowed. The makers of chips diverted sales to other technology-based commodities such as I-phones.
The inability to resolve an immigration policy has slowed the ability to fill low-end wage jobs.
The shuffle between people who had part time gigs moving to full time positions or no position.
The shortage in supply of workers should be pushing wages up. Not so much. Why? Watch this one as competition for workers increases.
The State of Montana has chosen to forego the extra federal unemployment benefits for the residents but instead is paying a bonus to have workers return to work now.
From the workers point of view, returning to work is returning to a job that does not pay a wage that covers your expenses. Something is better than nothing. Depends on the worker.
The lack of housing. Think Montgomery. Add Amazon and Medline where wages pay $15-$18/hr. where is the housing to support that income?
What is a job now? In some cases with remote work, 9-5 is no longer the norm. The issue is that workers will now focus on tasks but get them done in a way that creates a better work/life balance. So some employers are now competing with “Do you have a remote work option? What is it? Could be a benefit in some cases.
Remember pre-pandemic most sectors had trouble finding new workers. Now there are still some that can’t find workers in a particular field.
The most expensive part of work for the employer is labor. Pressure to both contain wages and benefits and the number of workers. This is at odds with the needs of the worker to have a livable wage.
There are plenty of employers that simply do not know yet to what extent they should re-open. And in turn still some employees that are comfortable (legitimately) with returning to work. Is it safe?
Child care. In the HV we know the number of available slots varies by county. But complicating this one is are sending your child to safe location.
The WSJ has many metrics to support or oppose these concerns. Depends on your point of view. For instance, average wages have ticked up. The average number of hours in the work week have increased.
The point….the next time someone says, “It’s the extra unemployment benefits that is keeping me from finding the workers I need” you should agree that it is true in but it is far more complicated than that. We are not coming back to the way things were pre-pandemic. Many things changed in the workforce and the economy. The need for the JCTF to create the regional workforce has never been greater. We are returning from a once in a 100- year occurrence. Fixing this does not happen in a year.