Friday, October 29, 2021

The Labor Shortage and Minimum Wage

Will full-time employment become a thing again?  Millennials, don't give up yet!

Weird things are happening, but to some extent, I predicted they would.  Economics runs in cycles, of labor surplus to labor shortage.  To concentration of wealth, to revolution.  From shortages to surplus. From high prices to low.  And the conditions for labor in 2011 when I started this blog, have almost changed 180 degrees.  This is good news for working people.

I noted before how many companies are avoiding hiring full-time help, as they would then have to pay for health care and other benefits.  So many workers - particularly younger workers - have to work two or three part-time jobs to make ends meet.  This leads to scheduling conflicts.  Boss from Job #1 calls and says, "I need to you to work tomorrow!" and the employee replies, "I can't, I have already promised Job #2 I would work a shift there!"

So Boss at Job #1 says stupid things like, "We need to see a level of commitment from you, and I need you to work this shift!" to which the employee replies, "Well, you won't show enough 'commitment' to me to hire me full-time, which is why I have two jobs!  And by the way, I'm not coming in tomorrow, or ever, I quit!"

And in today's market, employees can get away with that.

The tables have turned.  Unionizing is back in the news and union membership is up.  Nothing like the old days, of course, but there seems to be more support for unionization.  A tipping point has occurred, or is very near.  Cries of $15 an hour minimum wage are subsiding as most companies have to pay at least that much just to get workers in the door.  Things like drug tests - peeing in a cup - have gone by the wayside, at least for marijuana.

Employers are getting so desperate that they've even offered to hire me.  I was in Home Depot back in June, trying to find a cabinet hinge for the camper, and as usual the cabinet hinge display was a mess.  I carefully put all the hinge packages in the correct bins until I could find four identical stainless-steel 1/2"- offset hinges that I wanted.  The department head saw me doing this and said, "Want a job here?  I can interview you right now, put the smock on you, and have you stocking shelves this afternoon!"

I declined, noting that I was leaving for four months at the end of the week. "I don't care - a week is better than nothing!"  They are that desperate.

Why is this?  The pandemic, or something else?  Something else, I think.

I noted along ago that the age pyramid has become more like a minaret - we aren't running out of people just yet, but the population isn't increasing as rapidly as in the past.  Combine this with more stringent immigration policies (started under Obama, accelerated under Trump, and pretty much left alone under Biden) and we have a shortage of young people or immigrants to take all these "entry-level" jobs.  Folks like me are retiring in droves, at the same time.  This is good news for young people, but it makes older people nervous.

Simply stated, we were hoping for a retirement marked by low inflation and low wages.  In such a scenario, we could hire people to mow our lawns or trim our shrubs or literally wipe our asses (in the nursing home) for not a lot of money - eight bucks an hour or so.  Well, in the last few years, that wage rate has doubled, which means prices are going to go up, which means the amount of money we old people have saved may not last very long.  Weep for us.

It also means politics are changing.  I am no big fan of "The Squat"or "Ms. AOG" or whatever, but they do represent the voice of (some of) a new generation.  Sadly for them, they are outnumbered by the older generation for the time being.  But in a short period of time, a lot of "Boomers" will kick the bucket and American politics could change as well.  That being said, a lot of these new Nazis and "Proud Boys" are of the same young generation - so it sounds like the Squat has their work cut out for them.

This shift in demographics hasn't just affected the job market - colleges and universities are feeling the pinch too - as I predicted years agoEnrollment is down, due in part to demographics, but also due to other factors.  Xenophobic immigration policies have meant that many foreign students are finding it harder to get visas - and American universities rely on full-price foreign students to fill the seats.  The pandemic hasn't helped foreign students get into the country, either.  The value of an education has been called into question as well, as many colleges and universities are offering oddball studies and majors that are of no real use in the world. A bachelor of arts in queer studies?  What's the point of that?

Throw in the drumbeat of discontent that has been building up for the last two decades over student loan debt, and you can understand why maybe some 18-year-old today is making the logical choice not to go to college.  I ran into a lady the other day and she told me her daughter was just starting college at Expensive U.  "What is she majoring in?" I asked, and she replied, "She's not sure yet!"   "Well, I hope she isn't borrowing a lot of money to do so!" I replied, at which point the woman winced.

Some people still haven't gotten the memo.  Myself, if I wasn't sure what I wanted to study, I'd spend two years at community college figuring this out and getting those basic courses out of the way.  But that's just me.  For a lot of people, where your kid goes to college is wrapped up in a lot of status nonsense and bullshit.  My son or aughter isn't going to some trade school!   That's the sort of nonsense I heard from my own Mother, when I was pursuing an Engineering degree.

So colleges and universities are feeling the pinch, particularly the small, liberal-arts and specialty schools such as black colleges and women's finishing schools. Some have tried to buck this trend by admitting whites and men.   But do you want to be the only white guy at an all-black college?  Or the only man at an all-women's school?  And does your degree in African-American or Womyn's studies qualify you for any job other than teaching the same topics to the next fellow?

The job market ties into this. Many employers are not so picky anymore about hiring.  Back in 2009, you could make people take drug tests, make them jump through hoops, ask for two years' experience for an entry-level position, as well as a college degree - and pay minimum wage.  Worse yet, you could offer them an "unpaid internship" and basically make them slaves.  That is changing really fast. For many jobs, experience trumps degrees, and employers - desperate to find qualified help - are overlooking lack of credentials.  This in turn is making many younger people question the value of a college degree in the first place.

Or you could, as I did, get the job first, and get the degree later on.  Granted, this took me 14 years to do, but then again, I was paid the entire time - and had full benefits as well. Maybe that will be a new model of employment.  And you know what?  It was 14 years of discovery and fun.  I wouldn't take it back for all the money in the world.

Of course, that was back in the day, when benefits of a full-time job weren't all that expensive.  Health insurance, for example, for young employees, was pretty cheap.  But many companies became top-heavy with retirees, who were covered by the company's health plan, which in turn, drove more than one company bankrupt.  While many on the far-right decry "single-payer" health plans, many employers would welcome them, as it would relieve them of this expensive burden.  One reason why we have so much trouble competing with foreign countries in manufacturing, is that their labor rates are much lower as those foreign governments provide health insurance and other benefits - which means the employer doesn't have to pay for them.

It is akin to how we use food stamps and other benefits to subsidize Walmart.  Yes, that is the case - by providing government benefits, employers can pay less.  But this is a double-edged sword.  If someone makes $15-an-hour in this new paradigm, they may lose these government benefits, which means in real terms, they break even in the deal.  That being said, higher wages and company benefits would be preferable - to most people - to begging the government for assistance.

So cheer up young people! The $15-an-hour job you protested for is here - not necessarily due to legislation, but economics.  And pretty soon, full-time employment may become the norm.  Stranger things have happened!