In the comedy classic Caddyshack, pompous snob Judge Smails, played by Ted Knight, consoles a college scholarship-hopeful kid with, “The world needs ditch diggers, too.”
Don’t we know it!
Right now, in America, we are struggling with a shortage of blue-collar laborers. These are the folks who, for low wages and scant benefits, get their hands dirty every day doing things like harvesting crops, waiting tables and washing dishes, building and remodeling homes, nannying young children, fixing cars, driving trucks, checking and bagging groceries, tending to old folks in nursing homes, working in factories, loading Amazon goods for transport, and…ditch digging, among other things.
The labor market appears to be lacking several million workers who were active prior to the Covid-19 pandemic. “Help Wanted” and “We’re Hiring” signs are everywhere. Employers are offering higher wages and promotional opportunities. Still, the gears of the Nation’s economy seem to be gummed up. Healthy workers appear to be sitting on the sidelines.
About a year ago, there was a hue and cry from conservatives that “all that free stimulus money” and generous “unemployment” benefits were keeping workers on the sidelines. That may have been true in the short term, but those freebies are but memories now and the labor shortage is still here.
I think that there are several parameters to this problem.
- Government immigration policy and Covid-19 restrictions have limited the supply of labor which has normally been supplied by Latin American immigrants, legal and illegal. Politics aside, our economy has traditionally relied on cheap, immigrant labor to keep costs down. We don’t have that now and prices are inching upwards.
- The “essential worker” label applied to low-paid labor during the pandemic, and the danger that those workers were exposed to, left a sour taste in many mouths. Essentially, those blue-collar working stiffs were deemed expendable by government, business, and society. That had to cause many of these workers to re-think their job choices. Some have probably gone back to school to qualify for cushy, better paying white collar jobs.
- Everyone in the health services industry has to be re-thinking their vocations due to public behavior during the pandemic. Doctors, R.N.s, nursing aides, and hospital custodians and cafeteria workers have been working under high stress for two years straight…while the public has taken a half-assed approach to protecting itself with social distancing, masking, testing, quarantining, and vaccination. The medical profession is burned out right now. The folks who lay hands on very sick people are sick and tired of working so hard for an ungrateful Nation.
- The sharp rise of the stock market during this time, stimulated by the Fed’s zero interest prime rate and “free” government money flooding the economy, has made it possible for many elderly workers to retire for good. Housing prices have skyrocketed, allowing many of these workers to cash out the equity and try alternative lifestyles…like full-time RV living.
- The extra money in the economy has allowed more children the opportunity to go to college, thus depriving the workforce of those bodies.
- The pandemic’s effect on K-12 education unleashed a groundswell of “remote working” and mothers staying at home to care for their children and begin home schooling. They were forced to leave their jobs behind and many are now opting to make the change permanent.
There is an old saying that goes, “That which is scarce is dear”. In other words, laborers are now temporarily in a “sellers’ market”…they can demand more pay and benefits for their efforts. This is welcome news for hard-working grunts who haven’t seen significant wage gains in decades, while white collar salaries have ramped up and executive pay has skyrocketed.
Inflation will be the next blow to the Nation’s economy. Interest rates are now rising, so business and personal loans will be harder to get as lenders become stingier. Purchasing power will drop, people will buy less, and the need for labor to build, fix, and tend things will be lessened.
It’s the downside of the normal business cycle…a recession. We’ve endured many of those in my lifetime, seemingly one per decade.
What we don’t need right now…and we’re probably due for…is a stock market collapse. The Dow Jones Average has been on an 11-year Bull Market through three Presidential administrations. This is unprecedented…and scary. Inflationary indicators could panic investors and cause the “bubble” to burst.
If that happens, “Help Wanted” signs on businesses will be replaced by “Job Needed” signs being held by guys on street corners.
It’s a vicious cycle.