Fine Mess We are In...
Judging from all of the headlines I have been reading over the last week or so, we are in for another round of trouble as far as the economy goes and each side has a differing opinion as to why and how it can be corrected.
This new bit of trouble is that the labor market is completely out of sync right now as business owners are having a hard time filling positions and the unemployment rate, while getting better, is still at recessionary levels.
What gives?
Is it because the low wage job openings have gone unfilled because the unemployment benefits unemployed workers have been receiving are better than the wages these employers are willing to pay? I think thats part of it but not all of it. I stated in an earlier article that I felt that if people were given the opportunity to work and earn a living or stay at home and not be productive, most people would prefer to be productive. I still believe that for the most part.
The assumptions politicians and economists are making about the “why” should be addressed. Why not ask the people that are unemployed what they would rather be doing? It seems pretty simple.
You know me, I like the simplest explanation. Don’t make it so complex that no one can figure it out. However, I think this situation is a lot more complex and I doubt we have ever dealt with anything quite like it.
Everyone has taken this keen interest in logistics over the last year. Learning why we have shortages of one thing or another. Getting a massive program like the vaccine program up and running. What will be the next staple we will have to hoard so we don’t run out
. This is the new paradigm. This will be with us for the next year or so as we work thru all of the different supply chain issues and I firmly believe that the employment in this country is going through those same supply chain issues.
With timber, for example, you have increased demand for home and apartment building, home renovations, increased demand on paper products. All of these issues converged at the same time during Covid and none of those increased demands were expected. To add to the mayhem, the lumber industry probably moves slower than any other sector of the economy. Adjusting manufacturing on the fly is not one of the basic tenets of the industry.
Going back to employment, we have had a major disruption in the supply chain as well. People lost their jobs, by the millions, and had to scramble to make ends meet. With government help, the disruption was more pyschological than financial and people maintained some semblance of normalcy. Society was transformed in months and that transformation is where the problems lie.
The exodus from many major cities has left gaping holes in the employment picture. The support systems that are required in big cities (Stores, Hotels, Restaraunts, Dry Cleaners etc) do not have the traffic to support them at this time so those businesses are still running at a reduced capacity while the businesses that have increased need for workers (those locations that have seen an influx of new residents) can not attract the people they need.
It’s as if the mass migration of the early 1900’s has happened in 15 months. This imbalance will correct itself over the next year or so and the employment picture will look totally different by 2023.
I like to blame the government as much as the next guy but as far as the disruption and struggles of the employed and unemployed, I don’t think the Trump or Biden administrations are to blame. I think it’s the natural course of events in an incredibly volatile cycle and like nature, this cycle will return to equilibrium.