Hacker News Reader

Comment by missedthecue | Hacker News Reader

I wonder where everyone has gone. The lazy answer is that companies aren't paying enough. But how is it better to sit at home making $0 than working and having an income? How do they afford rent or electricity or pay for car insurance?

The workforce participation rate is still well below pre-pandemic levels. Millions of people just up and left the workforce. It's not as if they are looking for work at the right wage, they simply aren't looking for work at all.

Very peculiar.

View on HN

> But how is it better to sit at home making $0 than working and having an income?

I had that very discussion with a co-worker leaving. They told me working wasn't worth their time, and they'd better care for their home, family, themselves etc. instead.

And it wasn't that they were rich or their partner had a high paying job, more that the cost of daycare, private teacher, eating outside every day, work related stuff (clothes, commuting etc.) and their general health and mental impact made it a net negative for them. Working a job they didn't enjoy just didn't make any sense.

The interesting part to me is that the calculus didn't change overnight, it's more because one day they stopped for a while and thought long and hard about their life, and came to that conclusion that was there for a very long time already.

Ok, but this is still missing a very important element - where the hell are they getting finances to live?

The point OP is making us these people probably need ~$2000 a month to live at an absolute minimum. No luxury, no gadgets, just getting by.

How does one decide “working isn’t worth it” but still magically has these funds?

My assumption is that these workers were absorbed into the economy of work at home - whether to be a homemaker, or to do childcare or eldercare that would previously have been contracted out, at the expense of the salaried worker, now are being done without pay outside of the auspices of the labor market.

they were likely so underpaid at terrible jobs they already had subsidized healthcare, section-8 housing, and know all about food pantries etc.

Going out less, not spending money on childcare, getting rid of extra car, and spending time cooking for self instead of going out - a bad low paying job is easy to lose.

I think the only 3 possibilities are

A) Their partner or family works

B) Welfare

C) Informal economy

There's also the 4th but unlikely in this case

D) Investments

C can make up for a lot depending on your network and skills. I'm not particularly well-embedded in my local community and if necessary I could get at least the following things free:

* Car repair work

* Basic healthcare (luckily I have state insurance so I don't need it, but if I did it's possible)

* Home/apartment/other home repair or improvement

* Tailoring/alterations/well-fitting clothing (including free clothes if I ask - even if I don't, I get given clothing on a semi-regular basis)

* Cooking equipment

Now, in return I need to offer some skills (mostly technical, academic, or navigating bureaucracies - skills that are in fairly short supply on the lowest part of socioeconomic ladder), but like I said, I'm not particularly involved so people with more history and social credit can get more stuff taken care of.

I also at one point paid like...50% of market rate for rent because I was willing to be free, on-call childcare for 3 children under the age of 7.

> How does one decide “working isn’t worth it” but still magically has these funds?

Most likely because even if, as GP says, their partner doesn't have a high-paying job, their partner doea have a job that clears the minimum necessary for household survival.

(Which is often less than $2000/person-month.)

The whole working Germany comes with close to ~2000$ well. Many poor European countries have enough people living from 300-500$. I could also do that if needed. What’s so expensive in US that you need 2000$? Last time I checked housing in Florida was super cheap by German standards.

They budget for the whole family, with one “bread winner” remaining.

I’d still expect them to get back to a stable job after their kid grow, but as it was a year or two ago, they just weren’t pulling their weight in the balance.

> ~$2000 a month to live at an absolute minimum. No luxury, no gadgets, just getting by.

Assuming 2000 is what you need as a standard working person, you need less than that in average when you’re in a couple, and the calculus is yet different with kids. When one of the adults stops working, a lot costs shift and it balances out. Gov aids, taxes and other benefits also change depending on your situation.

I wonder if being forced to spend more time at home during the pandemic reset people's exceptions.

To your point specifically, we used to be one of those families. Once we had children it did not work out a benefit for my partner to work in the field that she wants to work in (healthcare) as it did not pay enough. The additional net income of a full time job worked out to be about $200/month, which just wasn't worth it.

This changed once we moved country, to one where getting people with children back into the workforce is supported by both the government and companies, with greater flexibility from work and better subsidised childcare.

(With apologies to Louis Rossmann)

1. If you were near retirement age when the 2020 lockdowns hit (or if you were overdue for retirement), then suddenly you're effectively retired for a couple of months, and you might as well just make it official once the retirement ends. 2. Most people who retire have gotten a few promotions over the decades, so when someone is promoted into the spot of the retiring person, you now have one less unskilled worker as an indirect result. 3. Some people were only working their job because they thought it was a more reliable income compared to starting their own business. If they're laid off without warning, then they start their own business or freelance. Some of them will be successful and earn more than they were being employed for, so they're gone. 4. They were forced to spend time with their families and other non-work stuff, which reminded them of the stuff they actually care about, and shifted their priorities. 5. If any industries are affected by the above, then the higher wages attract workers and the effect ripples through to every industry with unskilled labor. Or at least most of them.

Those are some of the causes.

People had ~3 years to find new jobs outside of hospitality after the industry basically shut down. No one is sitting at home, they found new jobs.

There's also the toll COVID took on the workforce, and COVID-related disabilities.

This can't be the explanation. If it were true, the workforce participation rate would be steady. Changing jobs doesn't raise or lower that figure. A person is employed whether they scrub toilets or do brain surgery.

But it's not steady. Literally millions of people have stopped working and looking for work since 2020.

People realized that they didn't need to work shitty jobs. They could Uber part time, or work as a nanny without reporting as a full time employee or cut down on their living expenses or live off of government programs. Just look at how many people live in tents in California.

Well, about 1,245,000 of them died [1], and I'm sure there were a substantial number of older working-age people who went for early retirement to reduce the chances of dying from public contact.

[1]: https://www.cdc.gov/nchs/nvss/vsrr/covid19/excess_deaths.htm

1.2 million people in the workforce died?

70% of covid deaths were over the age of 70 years.

https://www.pnas.org/doi/10.1073/pnas.2006392117

I hope this isn't too shocking but a lot of janitorial and housekeeping work is done by retirement aged people who don't have enough money to actually retire.

The other big piece - especially to the hospitality puzzle - is that immigration was substantially reduced. First politically and then due to Covid. If you look at the number of work visas issued by year, we’re short literally millions of immigrants that would be doing much of the grunt work in restaurants and hotels.

visas are taking forever at the moment.. for any type

Yup. In many countries you're looking at a wait of over a year to get an appointment for a tourist visa interview.

4M of them got long covid and are unable to be worker that is sufficiently reliable for shift work in the service sector.

https://www.brookings.edu/research/new-data-shows-long-covid...

That’s what is a massive issue I see in the EU even if it’s underreported; too many people I know cannot work because of long covid. Some tried anyway and burnt out because of trying too hard; now they have 2 problems. Luckily most of them are in NL where you won’t end up in a tent under a bridge, but I think long covid is taken way too light (at least over here).

If by NL you mean the Netherlands: Long covid falls under a weird category which for all practical purposes means you have to fight the UWV nail and tooth to get even the tiniest bit of leeway. Which you can't since working 40h/week to get proper care+benefits is exactly the problem you are trying to avoid. Oh, and the state already said the uwv should stop doing that but they keep going like they always did. (my evidence for this is anecdotal second hand though).

And how many of those were grandparents doing Fred child care that allowed people to work at low paying jobs?

You can find (more than a year old at this point) articles from bar owners trying to re-hire their old staff. Those people found new jobs, because they had no choice. They couldn't afford to not work for years.

And, unsurprisingly, they wanted more money to return. Restaurants, hotels, and the like, tend to be extra stress for no more pay.

Interesting piece of data that's seldom cited:

Sep 2015 labor force participation rate: 62.4%

August 2022 labor force participation rate: 62.4%

https://fred.stlouisfed.org/series/CIVPART

I mean, you did pick a particularly low point on that series. It looks like the average pre-pandemic is closer to 63.0%.

0.6% accounts for all the open positions?

That’s about 1.5m people, so. . . Maybe?

This is the most reasonable explanation. I even know a couple people whose jobs were affected by Covid took the time (and government support) to do a career change.

It happened with the airlines too. When you're without a job for more than a year, people move onto new companies, new careers or just retire early.

Singapore airlines continued to pay their pilots to not fly during Covid, knowing it would be tough as hell to restaff once they opened up. Apparently they rotated them through what little flights were available (cargo predominated) to maintain their skills. Once flights were restarted, they had no problem with staff shortages.

I've personally watched people go from the food industry into software development because COVID reduced demand for restaurants for years.

I went from engineering to IT too

Engineering companies spent all my uni years at fairs to show politicians how they develop business in the area, but lack workers and need assistance from the public services

Fast forward to covid, they wouldn't hire you because they didn't have the projects, they wanted to hire workers with experience, market was tight so you had to understand the pay was low, they could find someone else, ...

So I went to an IT company, they really hired workers. And I'll stay. I declined interviews with these engineering companies that called back a few months later. And I can't wait to go back to these fairs to call them liars.

In my place, there is also the same case with restaurants. The government gave them money to continue to exist through covid. But most of them fired workers to use the money to buy new kitchens. Now they're complaining about the lack of workforce, blame unemployment benefits (ironic) and are lobbying to give visas to underpaid foreigners.

> But how is it better to sit at home making $0 than working and having an income?

In one of the young couples in my extended family, the mom recently stopped working because daycare cost more than what she was bringing in. I’ve heard this isn’t uncommon. This doesn’t explain the worker shortage at a macro level, but it’s one example where staying at home might make more sense than working.

Over a million people died of covid. Many more have become permanently disabled. Many of them were retired seniors but among the people who were not, they were disproportionately service workers who couldn’t wfh.

The average age of a covid death in the US was 80 years old.

He wants the greatest generation back on the clock!

The mode was in the 85 and over. The mean was less.

https://www.statista.com/statistics/1191568/reported-deaths-...

https://blogs.worldbank.org/developmenttalk/too-young-die-ag...

You will note that for the US, approximately 25% of the excess deaths in 2021 were from people 64 and younger.

That is still a large number.

Also note:

> And among high income countries, one notable outlier is the United States, which has a much younger profile of deaths than its income-level would suggest.

That hit minorities, lower income, and "essential workers" harder than other areas. These are the people who are cleaning rooms and working hospitality and service sectors.

Which doesn't even mention the fact that many people can't afford to retire at 65 or had to come our of retirement to work

The stereotypical housekeeping staff is the trifecta of minority, older, and low income.

If COVID deaths severely impacted the number of workers, then their housing should have opened up. Instead we see the housing supply even more constrained and prices rising.

95% of COVID deaths are of people above 50 years [1]. I think you need a bit more evidence to support the idea that worker shortage is because workers are dead or disabled.

[1] https://www.statista.com/statistics/1254488/us-share-of-tota...

Two big recent reasons for the shortage are retirees and reduced immigration, and the follow on effects of those. For instance, the people you are wondering about that "sit at home" are probably moving in with a relative and helping them. And there's a fair chance that relative retired earlier than planned, or was negatively impacted by covid, or both. Covid hit the old primarily, but that age group was helping out with families and communities, and now they need someone to help them.

And a longer term effect that has been going on has been a general reduction in working age males in the workforce. That one is more complex and worrisome. There's some recent research about them if you google for it.

Anecdata…I took a new job for a decent raise at the beginning of the year. The inflation this year ate up 1/3-1/2 of the raise.

I quit a month ago as the money wasn’t enough for me to move forward in life (VHCOL area), management was all older and I felt they do not want to adjust to 21st century processes, and I wasn’t getting any opportunities to really grow.

I have not applied anywhere yet, I’ve taken a couple trips, been spending time outside, and doing a lot of thinking and a little studying/research.

I have no debt, a decent savings, but not enough for a mortgage or to have kids. Employers don’t have a lot of leverage over me because I’ve never made enough to buy-into those adult things that keep your finances constrained.

I can not work for the next two years pretty easily, although I doubt it will last more than another month or four.

I’m not in FAANG and find most companies don’t have much to offer me compensation wise (in terms of letting me grow in my personal life). Not interested in wasting my life working for all these things in the middle.

If you can’t have what you want in life, that’s acceptable. But why get on that career treadmill for a bunch of stuff that won’t make you happy ?

Due to the cost of living, if costs increase and the wage do not, you just can't keep living in the city and go back to your parents[1]. At that point you are disenfranchised and you go to work only when you need to gift yourself a video game/thing using a part time job. For that style of living you can just skip every job that is not worth (like service industry)

[1]https://www.npr.org/2022/12/11/1139330863/genz-millennials-l...

A non-researched guess would be some trifecta of early retirement, lower immigration and gig work.

Gig work would be a more flexible alternative for a secondary wage earner. - delivery (Amazon/Instacart/Doordash) - rideshare (Uber/Lyft) - homestay (Airbnb/Vrbo) cleaning

A lot of people in that income bracket can’t afford a car

You can deliver food with a motorbike or regular bike.

I imagine delivering food in an inner city area on a bicycle is actually pretty decent since your expenses are minimal. I see quite a lot of people delivering on e-bikes daily.

Sounds like a great way to get mugged to me

Not everyone lives in a war zone.

areas that aren’t usually called “inner cities”. That’s about a half step up from slum.

Americans - particularly low paid workers - were more stuffed with cash than at any point in history BY FAR due to the stimulus.

In the last couple of months that started to draw down a lot - so I would expect the main reason people are quitting isn't because "minimum wage work isn't worth my time" (I mean, it probably isn't). It's because they actually for once in their lives had the cash to be able to do it.

While a third of COVID-19 fatalities were people using nursing homes and by definition not employed, and the over 65 cohort was 90% of fatalities, hundreds of thousands of people left life as well as the workforce. Some seniors can’t afford to retire or prefer to keep a job. The most dangerous job by virus morbidity was line cook, a service/“essential worker” job.

Then add in those disabled by the virus.

Indirect effects include “not working” people who were incapacitated by the virus who normally babysat their grandkids enabling a parent to work (or they’re sheltering in place instead of babysitting). School closures forced many working parents to quit. People who already had a pre-existing condition or high risk occupation retired early in the face of an unknown virus with early estimates of 2% fatality and 10% for old people (we now know this was inflated due to testing not keeping up with spread). Service workers were laid off and had to move on to other jobs. Many used the Pandemic Unemployment Assistance as runway to a better industry, go to college, or just work less. The prospect of mortality shifted people’s time-money trade off toward working less.

The government restricted immigration and many foreigners who could come did not want to work in a highly infected country.

This is all overlaid on a long term decrease in the workforce participation rate due to baby boomer retirements.

Baby Boomers are retiring. Boomers are the largest working generation for a long while. Gen-X is the smallest of all groups and there aren't enough of them to fill up the positions. Millennials haven't been upto speed to fill the positions Gen-X left open. Gen-Z is just entering the labor force.

There's a huge investment push to rebuild a lot of places, institutions, manufactures in the U.S to secure the supply chain. Those require lots of workers.

There're just a shortage of labor everywhere.

They’re on the dole. Why would you work when you can stay home and get paid just as much if not more?

https://nypost.com/2022/12/18/it-pays-not-to-work-in-bidens-...

The numbers are cooked.

Reply on news.ycombinator.com