Once upon a time, things were simple. You went to get a job and built your life around what you could do with that job. If it was a part-time, minimum wage job, you didn’t do a whole hell of a lot. You probably lived at home and your social life was pretty basic.
Eventually, as you got better and better jobs, you built a better and better life.
The pandemic has led to all sorts of weird economic outcomes. The latest oddity is the growing chorus of complaints in America about a shortage of labour, even though 8m fewer people are in work today than before covid-19 struck. In early April Bloomberg reported that Delta Air Lines had cancelled 100 flights for lack of staff. People are so hard to find that one café in Florida has turned to robots to greet customers and deliver food. A branch of McDonald’s is paying potential burger-flippers $50 just to turn up for a job interview.
The data back up the anecdotes. Total vacancies are running at their highest level for at least two decades (see chart), indicating that firms have plenty of unfilled positions. Furthermore, job openings are leading to fewer hires than you would expect based on the historical relationship between the two. And even accounting for changes in the composition of the workforce, wage growth, at about 3%, has been surprisingly robust, suggesting that firms are offering bigger pay packets to tempt workers. If they persist job shortages could eventually fuel inflation, threatening the economic recovery.
So, why is that. Well, The Economist presents a couple of options, but I want to focus on the first one.
There are three potential explanations for the puzzling shortages: over-generous benefits; fearful workers; and a reallocation of labour between industries. Start with America’s huge fiscal handouts. The latest stimulus cheques, posted in the spring, were for up to $1,400 per person. Seemingly every American knows of a neighbour’s cousin’s boyfriend who received a “stimmy” cheque, then quit his job in order to sit on the sofa. A federal supplement to unemployment insurance (ui), currently $300 a week, ensures that four in ten unemployed people earn more from benefits than they did in their previous job. Economic research has long concluded that more generous benefits blunt incentives to look for work.
And it’s true. I’ve seen more than one report of someone who simply opts not to work because they’re making more on unemployment than they did at work. I know of others who are making close enough to what they were that they’re opting to stay home, too.
After all, look at that $300 benefit. That’s 30 hours at $10 per hour. It doesn’t take much for that to overtake what you would have earned from actually working. That means it creates a financial disincentive to work. I mean, most people don’t really want to go to work anyway but make it so they lose money and only the foolish or driven will consider going.
Yet there are those who don’t see this as a problem.
Someone on my Facebook shared this Substack post by someone I’m completely unfamiliar with, and had to share a relevant bit:
Stick with me here, but what if people weren’t lazy — and instead, for the first time in a long time, were able to say no to exploitative working conditions and poverty-level wages? And what if business owners are scandalized, dismayed, frustrated, or bewildered by this scenario because their pre-pandemic business models were predicated on a steady stream of non-unionized labor with no other options? It’s not the labor force that’s breaking. It’s the economic model.
Sure. Maybe in your dreams.
See, employment isn’t about exploiting anyone. It’s about offering people work at a rate people are willing to accept. If enough people say no to a job at a given pay rate, then an employer will either have to raise what he’ll pay or they’ll have to give up filling the position.
It’s just that simple.
The problem is right now, the government has thrown a wrench into the system. People are able to coast through life without having to compromise and actually get a job.
Honestly, if you think your job is exploitative, you’ve got a moral obligation to seek employment elsewhere.
Of course, the person who shared this on Facebook had a sob story about how they were working in food service right before the pandemic and how they and their roommate who worked the same job couldn’t get enough in tips to cover the bills without a lot of really good nights.
Yet I happen to know that the roommate has worked food service for the better part of a decade. The person who posted it has a bachelor’s degree in something that they actually could get a job with (at least in theory. I haven’t looked at the job market for librarians lately).
In other words, there are zero reasons why they should be working for crap wages in the first place. Unless, of course, something about them makes it so they can’t get better jobs.
Regardless, there’s a problem in our current system of employment.
However, the problem isn’t capitalism. It never has been. The problem is that we have a government that’s willing to subsidize workers who can work but don’t want to, and at a rate that’s higher than what they were earning in many cases.
At some point, there are two things that need to happen.
First, we’ve got to stop supporting people who can work but don’t want to, especially when there’s work available.
Second, we’ve got to get people back to understanding that a job doesn’t owe you a given standard of living. If you want that, you need to step up and work your way into a job that will support that standard of living.
I don’t have pity for people in their 40s who are making minimum wage griping about how unfair the system is. You’ve had ample opportunity to get ahead. You’re just too much of a failure to do it yourself.
These people need a harsh lesson in reality, and I really don’t care if they ever actually learn it. It’s not my fault either way, it’s theirs for thinking the world owes them anything.