How the Labor Shortage Hurts Your Wallet

When I first heard the talk about a labor shortage here in the U.S.A., I thought we were just talking about the people who were afraid to go to work because of COVID-19. I understand that many were terribly afraid of mixing in business just as they were at social gatherings when the disease was running wild and killing so many thousands each day. I was afraid, too, but I am one of those that didn’t have to go outside my home to work. I am retired, well sort of anyway. The blog can be done here in the quiet of my home.

Woman sitting in waiting room, looking at her watch, running late due to labor shortage

But now, almost two years since COVID-19 first appeared here in America, the continuous labor shortage is weighing down potential economic growth, driving prices and in(pan)flation up, and making even the simplest things painful because of the lack of workers. There is a real labor shortage in the U.S.A. and it’s hurting your wallet!

The Facts

Labor supply simply isn’t returning quickly enough, and for companies desperate to hire, this is a huge problem. Just from the employers’ perspective, lack of labor means that any business growth is constrained. That is true despite pay being markedly higher for the first time in decades which has still not attracted workers in the numbers that are needed.

Then there is the price of everything. When wages go up, that is usually because business is so good that employers need more and better workers and are willing to pay a premium for it. Not so in this case.

Each week as the employment numbers flow out, we ae seeing different results. Unemployment numbers are dropping, yet the number of new workers in jobs is not nearly what was expected.

The conclusion is simple: fewer people are seeking work and despite many jobs out there for the taking, they remain unfilled.

Last month’s job report (November 2021) showed that payrolls rose by 210,000 workers, well under the 550,000 consensus estimates. According to the report, U.S. employment is still 3.9 million people below the need with the labor participation rate remaining at only about 62%.

Let’s Get Real

I don’t get out as often as I used to these days, fear I guess but age and declining physical health are big factors, too. That means I use the computer and my phone a lot to get what I need. What a disaster I am experiencing even when I am sitting here and not venturing out there. Here are a couple of examples:

My call to the pharmacy

Normally, when I call my pharmacy to speak with someone, it takes about 2-3 minutes to run the menu and get a response with a live human being that says a friendly “hello” and can answer my questions.

This week I called several times. That’s because I could not get my calls answered by a person after waiting on hold for 15 minutes, twice. That’s never happened with the pharmacy before. When I finally got someone, she apologized but told me that they were very short staffed and very busy and that is why it took them so long to answer my call. Besides that, it turns out my medication(s) are both out of stock (due to supply chain issues I assume) and that I would have to wait two or three days more to get them. That’s another very rare situation. The lesson to learn here is not to wait until you are running low to order in case there are delivery issues and perhaps going in person would get their attention more quickly. I will have to consider that one next time.

But the prize winner or should I say “booby prize” winner goes to the lab where I get my blood tested every quarter due to my diabetes and other complications…

Lab tests (name withheld to protect the innocent…if any)

I made an online appointment weeks ago for my blood tests, as is recommended. When I walked through the door I knew right away there was a problem as I saw (no kidding) about 30 people waiting in the lobby for testing. Normally they have 5 or 6 people there.

I tried to sign in electronically, but the system was down so I waited a few minutes to stick my head in the window to tell the person that I was here for my appointment (at that point I was already 5 minutes past my time) and she shot back that I would just have to wait until they could “get to me”.

Off to the side I heard a woman say she had been waiting for 2 hours and was still not being tested. She was a walk-in, but 2 hours?????

After a few more minutes had passed, I asked again and I got a bit loud when I did. I went inside and I guess the woman (a second woman) must have just decided I was an appointment so she took my info and sent me off to get tested. I don’t know what the other people thought happened to me, but I wasn’t going to protest being taken inside.

As we waited for the system to reboot, I had the chance to ask the tech what exactly was going on and she told me just what I had heard from the pharmacist the day before. They were extremely short of help and were just overwhelmed despite the fact that they are offering great jobs with great pay. She even said some people they hired had lasted only a few days and then just did not come back.

You know the expression that “time is money”. I looked at it as just that. If I learned any lessons here, it was to be loud and maybe just get my testing done at the hospital when I have my doctor appointments. If I save my time, I save money, so to speak.

Why Are We in This Mess?

There are a number of reasons people aren’t working and returning—from childcare issues to expecting more out of a job. We are right smack in the middle of what is being called “The Great Resignation” as the pandemic is dragging on and people aren’t rushing back to work. Despite anecdotes of signing bonuses, the end of federal unemployment benefits, and rising wages, the labor supply simply isn’t returning quickly enough. For companies that are desperate to hire, this is a huge problem.

It’s hard for me personally to understand. In my working time, people would have killed to get good high paying jobs like the ones that remain unfilled.

The problem becomes “our problem” when there’s a shortage of workers, goods are not making it to the shelves, workers with specific job skills are MIA, and prices are skyrocketing. Even with salaries to attract people, only the prices are going up and not the employment rolls!

Which Industries Have the Biggest Labor Shortages?

1. Trucking

Walmart’s recent bid to raise its truckers’ pay to nearly $90,000 a piece demonstrates the ongoing demand for this job in a transport-hungry economy.

2. Retail

Despite the epidemic of department store closings, some retailers are thriving—and finding it harder to hire.

3. Technology

Computer chips that are such a big part of industry are very short in supply.

4. Healthcare

It seems like no one new wants to join into this battle against COVID-19 no matter what the pay might be.

A Brief Summary

The main reason for the wavering economic picture is that demand for goods and services far outstrips supply in the labor market. The supply chain disruptions and global labor shortages are now a big problem for businesses around the world.

There are more than 10 million job vacancies in the U.S., with the National Federation of Independent Businesses (NFIB) reporting that a net 48% of small businesses have job openings they can’t fill. There is absolutely no problem with demand. There are millions of jobs, but a shortage of workers. Shifts that have taken place in society are becoming more pronounced on the labor market.

Another big factor is that many aging workers are retiring (like me…the baby boomers make a big number here) or voluntarily quitting roles just as demand for workers rises. Findings reveal that almost 40% of working-age people are not engaged in the labor market in any meaningful way despite employers’ pressing need for workers.

Now You Can Understand Why Prices Are Climbing!

When business growth is not as good as it should be, it boosts inflation as companies compete for staff and bid wages higher. Today’s environment of decent corporate pricing power means that these higher costs can be passed onto customers.

So you will be paying the way for these issues and it never goes backwards.

Final Thoughts

Those MIA workers are real and the effects they’re having on everyone are dramatic. If normal is what you were seeking, even with vaccines and the return of some of our favorite things—like movies, sports and yes, working again—things are not normal.

There are so many consequences from all of this, from being unemployed, missing out on career advancement, not being able to save for your retirement, to just the basic loss of socialization amongst us all by not being out there is a huge deficit to try to overcome. But are we all really trying?

We all have been innocent victims of the disease, but it’s time now to try to resume life. If it means changing things up for the better, so be it. Working from home actually works for some, but it’s still working. Changing careers works, too, but make that change and go for it. You can’t spend a decade deciding. It seems like many are doing just that. Your wallet is in pain and that’s only a part of what hurts.

I am on the outside looking in because I am retired, so maybe my opinion here isn’t in the mainstream, but it is an opinion.

I think that time is about up for playing victim since we all can do that and the time is now for action. Don’t regret if you let real opportunities go by and say later you wish you would have…? What you do today can change all of the bad news and turn it around for you and, oh by the way, for me too.

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