Tuesday, January 4, 2022

Problem Employees

If you get fired or quit once a year, maybe the problem isn't your bosses.

This whole "great resignation" thing is a little overblown, I think.  Yes, people are quitting jobs and moving on, for various reasons.  An entire generation is on the brink of retirement, and many are retiring early as a result.  The last of the baby boomers (me - born 1960) will be eligible for Social Security this year.  People leaving the job market en masse shouldn't be a surprise to anyone.

Add in the age pyramid and you have a perfect storm.  Spice with a little immigration lockdown, xenophobia, toss in a pandemic, and then bake at 350 degrees for 20 minutes. Voila!  Labor shortage.

As a result, many more are quitting jobs as they are seeing job offers for more money or are being called by recruiters.  Employers rarely offer raises to employees unless they have one foot out the door. "Sorry, there's no money in the budget for a raise!" they say. "What's that?  You got a job offer for $20,000 more?  Uh, maybe we can match that!"

There was no money in the budget, eh?

So people are doing the smart thing and making lateral moves.  For whatever reason, employers have been loathe, traditionally, to promote from within[1] and to give raises to retain employees.  So if you want to advance your career, you often have to move on.  If you stick around, they assume you are content and don't offer you anything more.

But to get the "new guy" in, for you to train, they have to offer more money.  So a secondary effect is that many people content in their jobs and content with their pay are chagrined to see the "new hire" that they have to train is making $2 more an hour than they are - after working there ten years!

So another person quits - as they can find a similar job for more money.  Wash, Rinse, Repeat.

It is not necessarily that everyone is quitting and not working anymore - many are just moving to a new, better paying job.  Employers who complain that "no one wants to work" just need to step up to the plate and start offering decent pay levels.  Usually they find people willing to work at that point. And with wages stagnant for the last decade and inflation taking off this year, minimum-wage just doesn't cut it anymore.  It is not that no one wants to work, only that they have better options.

And no, this "free money" narrative isn't why people aren't working.  The last stimulus check went out a year ago, and many if not most States have cut out the extended unemployment benefits.  It is not that ""Biden gave away free money" - for indeed, the bulk of "free money" was given away before he was even elected. The real reason is a shortage of workers due to our aging population demographics, restrictive immigration policies and a smaller next generation.  It is as simple as that.

But just as some on the right are jumping on this to claim political moral victory, many on the left are dong the same thing - claiming that this "worker shortage" is the result of people finally getting fed up and demanding their rights. People are quitting because of income inequality!  Death to capitalism!  Unions Yes!  Antiwork for everyone!

Well, maybe not.  The folks in this "antiwork" menagerie each have their own agendas.  Some are just people who want to get a better job paying more money (perhaps the bulk of people).  Others want student loan forgiveness, and like a broken record, "demand" that Biden wipe out student loan debt with a Presidential order.  Still others want to see an end to capitalism and the institution of a Communist State - which has even less chance of success than the student loan deal.  Others see this as a revival of the union movement - which it may actually help, somewhat.

Funny, ain't it?  A disruption in market supply-and-demand and everyone wants to read their revolution into it.  But like every other disruption in the marketplace, it will eventually reach equilibrium again.  Before long, there will be a surplus of laborers and a shortage of jobs.  A lot of those early retirees will likely go back to work when they find their 401(k) ravaged by inflation.  I just hope that doesn't include me.  Believe me, I have thought about getting a part-time job, "just in case" and as I have noted before, I have been offered jobs already, unsolicited.  So supply will increase and demand will go down, as the economy slows down due to inflation - and as more jobs are automated and people realize they don't need ten managers for every worker.   Don't get your hopes up that this is the wave of the future.

There is one other group that is cheering on this "labor shortage" and that is the problem employee.  I've been through this labor shortage thing before, back in the early 2000's, when wages shot up and "no one wanted to work".  I remember back then, they were paying well over $8 an hour at McDonald's, in an era where the minimum wage was far less than that.  It is akin to how people are paying the vaunted "living wage" of $15 an hour now, without prompting from the government.

What happened to that labor shortage?  Oh, well, there was a huge recession, everyone lost their jobs, and everyone lost their "take this job and shove it!" attitude.  Life went on, and in the decade after that recession (2008-2018) people went back to work, but often at wages far lower than they commanded during the heady heydays.  I suspect a similar thing will happen in the coming months or years.

I see lots of posting from these problem employees, online, and when there is a labor shortage like this, they tend to become more noticeable.  Employers get desperate and lower their standards and hire people whose resumes scream "trouble!" at full volume.  When a resume has 12 jobs for 12 years of working experience, you have to look more carefully.  When your applicant shows up late and stoned, and then drones on about how all his past bosses were "assholes" and "just concerned about making money, man!" then you know you've taking a viper to your breast if you hire them.

These are folks who unashamedly post things online about how they steal from their employers and then act like deer in the headlights when they are subsequently fired.  These are the folks who show up late, leave early, and foist their work off on their fellow employees by dint of doing nothing - the ultimate passive-aggressive game.  They are not fun to work with.

These are the same people who post messages online about "eating the rich" and "kill your boss!" - violent comments that would get right-wing posters banned from social media, but for some reason gets a pass.  I suspect these are the same sort of folks - 20-something white guys - who hijacked the BLM protests a few years ago to set fire to a McDonald's and fashion themselves as Antifarts.

In other words, losers.

And yea, we have always had such folks in the world.  For whatever reason - mostly mental depression plus drug use - they decide to give up on life and live in the margins instead.  It is a sad thing to do - to give up so young and so early.

So what's the point of all of this?  Well, I guess for starters, not to be that guy.   In a labor market where there is a shortage of workers and a surplus of jobs, you can pick and choose where you want to work.  And if you feel you are underpaid, you should look around and carefully see whether you have better options - the best time to look for a job is when you already have one.  And smart people do just that, rather than waiting until they are unemployed (either by quitting or being fired) to look for new work.  Losers wander from job to job, getting fired or rage-quitting, and then living on someone's sofa for a few weeks or months before getting tossed out.  This is a good way to end up homeless.

Yea, working sucks, we get it.  And everyone else had to go through the same bullshit - well, most of us did, anyway.  It would seem nice to not have to work all day long, but then again, life without struggle is life without meaning.  Our struggles define us - and no, that wasn't something that was apparent to me at an early age, either.

If you are an employer or run a small business, well, maybe it is time to review employee salaries rather than wait for people to quit.  Do this before you get desperate and hire that serial-quitting stoner who will steal from you and repel your customers.  And maybe it is time to look at your business and see where you can eliminate unnecessary labor.  I did this.  I used to "file" every damn paper that came across my desk every day - many law firms do this, and can afford to, as they charge premium prices and hire all sorts of secretarial and paralegal help.  But then I realized that I never looked at these files and it was far less time-consuming to just throw all the bills and whatnot in a big box and then dig through them when I needed something.

At one firm I was at, my secretary kept a "chron file" of every document I created, in chronological order.  I never realized it existed until I was there a year - what make-work!  I mean, we all had computers and if I needed to find a file, it was as simple as just looking on the hard drive.  "But that's the way we've always done it!" they said.  I left a few months later.

I suspect this labor-shortage thing will resolve itself in due course.  It seems these labor shortages often precede a major recession, and given how dramatic this one is, I suspect we may be due for a "correction" in the future.  When that happens, well, the fellow who quit his job every eight months will find it hard to get a job.  Problem employees will be the first to be laid off, as they are usually the last to be hired.  And in effect, this is how labor shortages can trigger a recession.

As I noted before, you make the most amount of money from your own labor directly. If you hire someone, you have to pay them, and you make a smaller amount of money from their work - but more money overall. For each additional hire, you skim less and less off the top - and spend more time managing employees and less time doing work yourself.  Whether it is a law firm or a neighborhood grocery, the effect is the same.  Hire enough people and your make no money from your direct labor - you are 100% in management mode all the time.  And eventually, if you hire enough people, you get to the point where that last hire is costing you more money than he is bringing in.  And at that point, you stop hiring and realize you can make more money by doing less work.

Far-fetched?  Maybe not.  There has been a "car shortage" for a couple of years now, and the car makers are reporting record profits.  Turns out you can make more money selling at list price (or above) and selling fewer cars as you have to pay fewer employees to make them and fewer salesmen to sell them and less ad space to promote them.   On the other hand, if you want to run the factory three shifts, you will get far less productivity out of the third shift - and be forced to pay them third shift premium as well.  Once you flood the market with cars, you have to advertise more, cut prices to be competitive, and hire more salesmen to push iron off the lot.  Sometimes less is more.

Time will tell whether I am right or not.  All I can say is that every major "sea change" that has happened since I was born has turned out to be a trend of maybe ten years, tops.  This labor shortage thing won't go on forever - not with so many desperately poor people in the world.

[1]  The reason why most employers don't promote from within is, I think, psychological.  If you work with Good Old Jim and he gets promoted to boss, are you going to respect him?  He is one of the guys!  And Jim may have more loyalty to the "guys" than to the bosses.  It is better to hire a stranger and maintain that separation than to try to elevate someone from inside.  There is limited advancement at every level, but at every level there is also a brick wall - which forces people to make lateral moves in order to advance.