Part of it is that the pandemic reduced their demand for extra pocket money by curtailing some of their pocket-money activities. The same is probably true for adult employees, with vacation travel, live sports events, etc, being cancelled.
Isn’t that a short-term kind of thing though?
That’s what I’m trying to tease out; how much is short-term reactions to pandemic conditions, how much is structural changes in the job market, and how much is just shifting of people/jobs in the existing job market?
Some of it may become long-term simply by resetting people’s habits – for instance, I suspect that movie theaters will have a hard time getting the number of butts in seats back to pre-pandemic levels because some of the people forced to settle for home viewing (and who might have upgraded their home viewing arrangements) may decide that the bigger screen isn’t worth paying theater prices for tickets and snacks, putting up with yahoos talking and lighting up phone screens, etc.
Hilarious. This is the exact same scenario that’s used in every Intro to Microeconomics class when they discuss comparative advantage and absolute advantage. The scientists should spend their time doing scientist stuff and not be spending time doing routine clerical work, even if they’re quite skilled in it.
In families with both parents working, kids in school, child care, and the usual hectic life that involves, some things had to change when the pandemic hit and the kids stayed at home. Child care became almost unavailable and someone had to stay at home, usually the lowest paid partner.
Child care can be a huge expense and so many people left to stay at home. Several women that I used to work with left and they aren’t coming back now even though the schools are open again. Why? Because after making the adjustments they realized that even though they enjoyed working they were spending an inordinate amount of pay on child care, missing some very important years and hours of time with the kids, and doing it all for a net benefit of a couple hundred dollars a week. So they made whatever financial adjustments in the household budget that was needed and found that they liked it.
Anecdotal story to be sure, but when they started telling me how much child care costs if you don’t have other family or friends to help, I was amazed at how much it cost.
Not a small number of teenagers have parents who don’t want them working now, especially in the public-facing jobs that so many of them have traditionally had.
However, in recent years there’s been a surge, even pre-COVID, of people graduating from college with NO work experience of ANY kind, except maybe for an unpaid summer internship here or there.
In some of the weathlier zip codes, many of the HS/college kids worked because the parents wanted them to get work experience rather than they actually needed the money. Many of these parents can give their kids whatever they want. Their kid was working a $10/hr job at Chick-fil-a to give them some real world life experience rather than the family budget counted on that weekly paycheck. Now that these jobs are more stressful because of low staffing and riskier because of COVID and unruly customers, that life experience is not worth the meager pay and irrelevant job skills. The people working those jobs now are just those people who truly need the money for things like rent and food. The segment who were working those jobs for discretionary income have decided that the low-wage work environment is not worth it. Either they do without the discretionary purchases or they get that money from other sources (e.g. parents, gigs, etc.).
The higher-wage employees are leaving for things like going back to school, taking a sabbatical, starting their own business, living on savings, etc. But these aren’t the people working as cashiers. These were people like office workers who decided that the pandemic shutdown was a good time to reassess their employment situation. These vacancies have created some jobs for those missing low-wage workers who have the ability to fill these jobs. A HS or college kid may now end up working in their parent’s office instead of Chick-fil-a because the parent’s office has so many vacancies.
I am so utterly beyond tired of this trope. One single check months ago does not pay rent, bills, or put food in anyone’s mouth today.
There were 3 stimulus checks since Covid started. There was also aid available, including upgraded unemployment. I’m unsure why some of you think this is a trope when it is actually what many people are doing. They saved the money from the stimulus checkS, they got unemployment benefits, some stopped paying rent, and they basically used that money to enable them to stay at home and not have to go back to work. I know people who did this and are still doing it.
I think, perhaps to some of you the money meant nothing, but not everyone is in your boat. There were a lot of ways to stretch out the various Covid relief funds available and other assistance available, as well as things like not having to pay rent and not being booted from your place and the upgrade in unemployment.
I’m curious to those of you who think this is a trope…just how DO you think people are able to stay out of work such that there is a labor shortage, specifically at the low end of the market? I mean, here in my neck of the woods even the local McDonalds is advertising that they start pay at $15/hour which is definitely higher than my states minimum wage…yet, I’ve seen them closed multiple times with a sign saying they don’t have enough people for a shift and won’t be able to open until 8. This has happened at the local Duncan Donuts as well. So…how do you think people are doing this, since it’s a ‘trope’ that they were able to build up a pool of money from the various stimulus checks and other things to allow it?
Sure, curbside isn’t a gig economy type thing, but it’s a pretty major change in how people shop, and that’s the point. We’ve learned a lot of new ways to do things that were previously considered impossible or at least impractical, but being forced to at least try them the past 18 months has shown it can work. And I suspect you are an outlier, here. I think a lot of people like these new services, and will continue to use them so long as they are available.
For example, one major change here in Ontario was that you couldn’t ever get alcohol as a take-out item. We’ve been bitching for decades now about how restrictive our laws are on alcohol distribution. But COVID forced the government’s hand, and they started allowing restaurants to offer take out alcohol, and not just beer. You can get wine and liquor too at some places. That’s a change that absolutely everyone except the Nanny-staters likes. The customers like it, the restaurants like it, the delivery app people like it. If the government tries to shut it down, they’ll lose the next election in a landslide.
Yes, the Cause & Effect relationship between COVID Relief and the dearth of lower end wage workers is very obvious.
Multiple people in this thread have already posted that people’s second incomes often are devoted mostly to child care. For these people, quitting their job is almost revenue-neutral. Factor in the pandemic-related budget tightening, and it is totally revenue-neutral. And child care availability hasn’t really bounced back, because a lot of these people work in… wait for it… child care.
Remember when everybody was huffing about “why should we pay teenagers $15 an hour to work at McDonald’s? It’s not supposed to be a living, it’s optional extra money.” Surprise! You were right. For many, it was optional, and they’ve opted out.
So…not a trope. I agree. I’m not sure if you thought I was against this idea or not or just bringing it up as another data point, but I did see others mention this earlier. We have had child care issues with personnel in my department, especially late last year and early this year. We got around some of this by allowing folks to work from home, but if you were working in a business that didn’t allow that or couldn’t do it then it would make sense to just quit so you could care for the kids at home, especially when those kids might have been having to do their school remotely…which for a lot of parents has been a real issue trying to assist in that.
Well, I recall saying that the market drives the wages, and this seems to be the case. Currently, the market is driving the wages far higher than that $15, at least based on the fact that those types of venues (i.e McDonald’s and the like) are having a VERY hard time getting staff even at that price point.
The problem is, that doesn’t seem to be the case. Every time you read a story about this in the news, the one thing the businesses seem loathe to do to try to fix this is offer more money. They’d rather close the store than increase wages.
How many applicants do you think McDonalds would get if they offered $30/hr?
They’ve been whining about this shortage for several months now, and in that time, how much have they increased their wages? And I mean a real increase that they’ll actually pay. Go over to the antiwork reddit, and you’ll see examples every day of people applying for jobs that pay “up to $X/hr!”, only to find out that they’re actually offering less, with some vague promises that you might get more later on, if things work out, maybe. It’s all just a bait and switch game at this point.
Businesses need to cut the crap and start really offering these wages. Until then, this is all their fault.
It comes down to the cost verse benefit. I think a lot of companies are struggling to find a balance. Basically, at a certain price point, you are going to lose money if your margins are thin enough. So…do you basically work with what you have and, perhaps, have to shut down a morning or two a week, losing that potential business (and pissing off customers like me who want some freaking donuts!), or do you pay more in wages?
And that would shift wages up across the board, because if someone could work at McD’s for $30/hr then places like call centers are going to have to offer substantially more to entice younger people to work for them. It will…it is having…a cascade effect. Especially since, for some workers, nearly any price point is beyond what they want to deal with right now.
They are doing this already…it’s why you see agencies poaching people from other agencies by offering them more money. It’s why wages at the local McD’s went from $8/hr, to $10/hr, to now $15/hr…and they STILL can’t get sufficient staff. What I think this all will drive going forward is more and more automation. Simply, there won’t be that many jobs at places like McD’s 5 or 10 years from now. It will be like the grocery stores, except even there I can see things like what Amazon uses to manage and stock their shelves trickling down to stores.
In the short term, however, what you have is a very tight labor market with a lot of labor shortages which is going to drive up salaries…is already driving them up. At the same time, you have inflation starting to impact things, you have a tightening energy sector which is causing prices to go up for energy (more in Europe and other areas I think than the US at this point, but we will feel the pinch too)…add in the additional costs for labor and everything becomes more expensive, which will further drive up wage prices like $15/hr won’t be enough to cover costs for many. Along with supply chain shortages (caused in no small part by what we are discussing here) and other disruptions, it should be a very unmerry xmoose for all, and probably not a very happy new year for the outlook for 2022.
Sometimes, I wish I could just lay flat as well. Ugh.
And I don’t see what’s wrong with that. Wages have been stagnant for decades now. The people doing the actual work in businesses are the only ones who haven’t seen any significant gains despite increasing productivity pretty much across the board in the economy.
Businesses have gotten away with underpaying people for years now. Now it’s finally catching up to them.
For all the reasons we are discussing here, it’s not possible, at least from a market perspective, for companies to underpay workers, as workers were willing to work at those price points. I realize this is going to open a can of worms wrt debate, so I’ll leave it there, as there is more to wage scale than just paying what the market dictates. I do agree that this is going to force companies to make some choices wrt maintaining staffing levels in order to keep their businesses going. We are seeing that already, and I think we haven’t even gotten to the tip of the iceberg on this thing yet.
McDonalds has made their choice, and it’s automation.
McDonalds had a HUGE drop in employees between 2015 and 2017 - from a steady workforce size of around 420,00, to 235,000 in two years, and down down to 200,000 in 2020. McDonalds has less than half the employees now than it did five years ago.
Part of that is loss of sales - revenue dropped from 24 billion to 19.5 billion over that period - but a bigger part is the push to automation. Not just kiosks for ordering, but automation in food prep.
As for the lack of workers in general, we probably don’t know all the factors, as the economy is complex. There are no simple answers.
But we can guess at a number of factors:
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Retirement pull forward. Some people were eased into early retirement rather than pay them to stay home. Some people near retirement chose to retire now rather than re-learn how to work at home or go back to an office.
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Choosing education over work. Some people went back to school rather than continue working. A LOT of graduating college students have chosen to either go to grad school, get a second degree, or take certification training rather than try to get a job in this environment.
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Home schooling and risk of school closures. Homeschooling has increased dramatically, by millions of students. That requires a parent to be home to do the schooling. And even if your kid is in school, there’s a high risk of a closure if covid breaks out, so some parents are remaining home anyway.
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Sectoral shifts and training. We have a glut of restaurant people because of closures, but a shortage of truck drivers. Restaurant workers cannot drive trucks. One way to have a lot of workers unemployed while there are job shortages is to have a huge mismatch between the skills of the unemployed and the needs of employers. It can work the other way around, too. There could be unemployed fairly high paid people who will not work minimum wage jobs.
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Wealth of the young. Young people now live at home much longer than they used to. People have smaller families, and can tolerate kids living at home longer and have more wealth to spend on each kid. Back in my day, you worked crap jobs because you just didn’t have a choice. And families with five or six kids (common back then) were pretty strict about kicking kids out of the nest as soon as they could. Now, it’s an option for some to not work and stay home - even into their 30’s.
I’ll bet I could list another ten possible factors. And all of them might be right - or wrong,
That’s a fallacy because most people don’t (know how to) calculate the costs for using their own equipment. IRS gives you 56¢ per mile, down from 58¢ in 2019, & I’ve heard that figure is low. Let’s round it up to only 60¢/mile - if you’re a 'GrubbyDoorEats" delivery driver, for every 10 miles driven you should put away $6 for repairs/replacement of your car. If people did that, all of a sudden it doesn’t pay that much. If you do that great, but if you don’t you can’t do that job anymore in a few years when you suddenly find yourself with a car that dun wore out & no funds to buy a new one.