Some Thoughts on the Labor Shortage
What is the real labor story in our community and the world today? For the past 30 years, I’ve been told at every turn that when the boomers retire, I can have any job I want. I’ll explain here my thoughts on why this happened a little sooner than everyone expected and how the world of business and industry may shift to accommodate the new world we are living in. 90% of people leaving the labor force are over 55 years old with many months in our country seeing in excess of 3,0000,000 no longer willing to work. I think there are multiple compounding reasons for this and COVID definitely accelerated many early retiree’s timeline. Pre COVID, we were seeing record stock market growth along with the still soaring home prices allowing many retirees to cash out a little earlier than they previously thought. Think about where we were 6 months ago versus housing today and you can see interest rates rising and younger people who don’t view a “starter” home as a $250,000 purchase which could leave our housing market up-side down fast, but that is another article on its own. During the pandemic, we saw older people nervous about health issues potentially created by returning to work. You are 5 years away from a comfortable retirement, why risk it? An important number that is often not shared but is with the Bureau of Labor and Statistics is the Unretirement Number. This usually hovers around 3% but during the pandemic, dropped to 2% This doesn’t seem like many but when we have 90% of people leaving the workforce over 55 years old, you can see how quickly that 1% adds to the total available employee base.
What are some of the other factors that could be factoring in to a labor shortage? In the Southeast in general, it has always been an attractive place to do business due to the fact that overall labor factors were very positive especially in productivity and cost. I think it is a shock to the business infrastructure that the labor pool now has the power and they have been somewhat slow to adapt. It is easy to see the signs around town and the wages have obviously increased, but the old saying is true, money isn’t everything. Most people under 55 do require money, but the cost of living is on the lower end of the country here so things like work flexibility, time off, benefits and soft benefits are as of much value of money. Money is easy as a business knows what the bottom line is and how much they can give. Flexibility requires a much deeper examination of how a business is run, production is timed and staffing schedules are created. It is complicated but it is required if you want the best and brightest employees. I’m not sure people here have heard but in most of Europe, 30 days off per year is a standard minimum and many have been working a 4 day work week for the last 100 years. These companies have found that a happy and rested employee is a productive employee.
I have no grand illusion that we will see this type of change in our country, but it is time we start listening and learning to those lessons. As we move forward as a community, we will see business combat this quite simply by eliminating labor and increasing capital in automation. That is a hard point to argue as I’ve yet to see a robot show up late or fail a drug test. The beauty of that system is that replacing 5 employees with a robot will see the need for one very skilled technician to program and repair those pieces of automation. Skills along with training should improve for the best and brightest employees willing to apply themselves to their trade. The rest of us will still rely on blaming foreign countries instead of becoming lifetime learners and improving our skills and abilities to adapt to the changing world of business, industry and labor.