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Where have all the Workers Gone?

| Jun 9, 2021 | The SoapBox |

Time for another mini-rant.  A client of mine has been out of work through most of the pandemic and has struggled to get government assistance, as the rules for getting and maintaining unemployment were constantly shifting.  She has a good work history as both a FOH and BOH employee in food service with some management experience.  He previous employer had promised to rehire her when he was able to reopen his restaurants, but decided to only reopen one and to staff it with family and other staff with more tenure (she had been a shift manager at the other restaurant, but the staff at the “original” location had been there for decades).

She has been actively seeking a new job at an entry level, but was not getting any offers — mainly because the competition was very stiff — there were lots of applicants with equal or better qualifications applying for wait staff positions.  This week, she was hired by another restaurant, getting the job in part because she knew the BOH manager.  She was excited to have a job and be back at work — not despondent at “losing her unemployment.”

The belief that unemployment and lack of adequate staff in service jobs is all about “lazy Americans who don’t want to work” is belied by the numbers. The unemployment problem in the US is not lack of jobs — 9,000,000 new job openings in May — or lack of workers — 6,100,000 new hires in May — but of the mismatch between available jobs and workforce location and skills.

The jobs are mostly in areas where employment is already back to “statistical full employment” and, thus, the available pool of potential employees consists of those “marginally attached to the workforce.”  These are are not all “shiftless lay-abouts on unemployment” but students, single parents, stay-at-home moms, older people transitioning to retirement, people who have no access to transportation, people caring for a family member, and others who cannot commit long-term to a “regular” job.  Meanwhile the workers who want full-time employment are in areas, like my client, that have an excess of people seeking jobs, often with skill sets that exceed the requirements of the jobs available.

Before COVID, the ratio of available jobs to available workforce was approaching 3 to 1 and the actively employed workforce was at an all time high. Both the Obama and Trump administrations tried to find strategies to “entice” people to enter the workforce, including campaigns to encourage those over 68 to “take advantage” of the new rules that allowed them to earn unlimited wages or income without a reduction in Social Security — a law that was enacted at the behest of business interests, not workers.  Other programs actually encouraged younger people to “skip college” and start earning now (actually, given the crushing debt that can be incurred through student loans, probably not bad advice, but that was not the motive of the campaigns).

So why are there so few workers in the “active labor force”?  The main reason is that we baby-boomers (I am in the last half-decade of that category) are now retiring in record numbers — as many as 400,000 per month — a trend that started before the COVID Pandemic, but which has increased significantly during the last 18 months as many workers found that they could “make it” on their retirement or simply decided that going back to the 9-5 was not that enticing.  The groups that are in their prime working years — the baby-busters of Gen X and the Millennials — have the highest rates of employment and, thus, have no real elasticity to add to the workforce.  Meanwhile, Gen Zers are still completing their educations, starting families, or are already in the labor force.

The US is not alone in this dearth of workers — in fact, in comparison to most other developed countries, the US is much better off.  One of the reasons that we have a higher workforce participation rate in the US is the lack of government programs for the unemployed — most specifically the lack of universal healthcare and guaranteed housing.

This is also not a new problem.  While many remember the “feminist revolution” as a courter-culture movement of the 1960s and 70s, it was in fact very popular with business interests, who saw in educated middle class “stay at home” mothers a new potential pool of workers (albeit, below a glass ceiling).  The trend in delaying marriage among young women and the concept that it was possible to “have it all” with a career and a family, was likewise a real feminist trope, but also a cynical move by business to attract and retain a workforce that was cheap in comparison to the traditional pool of male workers.  The gender pay-gap is not just about gender — it’s about keeping the bottom line healthy.

This is why many business interests, which are otherwise supportive of conservative policies, oppose immigration restrictions.  As the pool of cheap(er) native employees has shrunk and women have begun to make strides into upper management, business needs a new source of low-cost labor to keep profits rising.

The simple fact is that, like any complex national or international issue, reducing the US’s unemployment problem to a sound-bite is not helpful to finding a solution.  In fact, it is counter-productive to doing so when the sound-bite is accept as “unquestionably true and the only cause” of the problem.