Where have all America’s workers gone?
economist.com
economist.com
At some point it’s better to not work than to work at a job that pays nothing. Personal anecdote: my friend’s wife was a host at an upscale restaurant. They decided to have a baby during the pandemic, the wife went back to work and within 2 weeks quit. Why? Because the childcare was more expensive than what she made. It was cheaper and more fulfilling than the money she was making. They got rid of a car because she no longer had to go to work and she now had the time to take care of everything in the house which brought their costs down. Eventually she started her own little shop on Etsy and makes a nice little side income. They are actually in a better place without that job than they were with it.
- spouses who work and they didn’t need the extra money.
I have no idea why people think this is so outrageous.
That kind of is the discussion…
The overwhelming number of families do not benefit from tech incomes, and actually do require more than one person to contribute to the household income.
https://www.census.gov/library/stories/2022/09/did-covid-19-...
Let me put a bit of context. At least a decade long debate about gender roles and other other related issues has been going on and only intensified, imo given the one sided politically correct stance adopted even by those who deep inside disagree with it has something to do with it.
A lot of separated, divorced couples, who remain alone, but that still leaves millions who likely are sharing a place having the option to reject employment, rely on one source of income and get by. Which may very well be a far better spot to be in than seeing oneself exhausted, poorly taken care of personal matters and still no flowery prospect anyway.
That is not a tiny numbers and is totally relevant to the discussion since the article goes on and on about some figures but provides nada convincing insight about the natures of the changes we are subtly but surely observing. The social aspects are gladly omitted to focus on numbers as if people were hungry state machines operating on dollar to effort/time spent only.
Note: not saying women better not work. Given the nature of jobs it's often perfectly interchangeable and who earns more is likely to be the determinant. At least for couples who are not well off. Those who can opt for the lower income without significant impact to their life style would likely take certain factors in such as the appeal of being able to be a house-huseband and see their partner stressed out to make bucks vs taking that chore off them in exchange of theirs. In either case that's 1 count of off the labour market that's on the table for every two people in a home sharing relationship in the united states.
I would go as far as saying that the precarity many women were put through lately made them twist their mind about singleship and turned to getting in a relationship in order to leave employment altogerher. Even this count wouldn't be so tiny to be discounted, and it's not like surveys will capture the figures.
The most extreme example being an uncle who was a PhD Chemist in automotive paints his entire career spent with the same employer and who has a slightly-over 6-figure annual pension. Before COVID-19 he was a door greeter and stocked shelves at a grocery store in the city where he lives. Now? Watches television all day.
- people close to retirement and who said “fuck it” I’ e got more important things to do.
The statement you made is both badly phrased and irrelevant. What you meant is that you know people who wont go back to a previous job for any wage, which is so absurd (and baseless) that it's effectively noise.
And sone people wouldn’t go back to a previous job at any wage. If you left Twitter and Elon Musk called you personally and offered to double your compensation, would you take him up on the offer?
And you didn’t answer the question - is there any amount of money you could be offered to work at Twitter?
I'd do it for $1024/hour on a 1099 contract with guaranteed time and a half for overtime.
As for the question in the headline: my wife lost her job just before COVID. She hasn't been back to work since because I make more than enough for both of us and by not working we were able to get rid of a car, cut various expenses in half, and have more time together since I was working from home. We went from DINK to SINK: single income, no kids.
Even before I fell into my current role at $BigTech, we had our big house in the burbs in “the good school system” built when I was making only 115K in 2016. Why would I be willing to suffer now that I make twice as much? Making more money wouldn’t affect my lifestyle.
Going from local enterprise dev to working remotely for $BigTech didn’t really change anything in our lifestyle
Dual income families enjoy a level of insulation that single income families do not. In the single income family the primary bread winner has double the stress, 1. inherent in working and 2. knowing there is no realistic replacement of income if they fall ill, get caught in a layoff or just hate their job and need a break everyone is counting on them to provide.
This might seem better in the short term but over the long term I’m not convinced it’s better.
It’s not really that different in the scheme of things. You had to work before and you have to work now. That’s the reality of our capitalist system.
customers spend -> tax + cafe -> cafe employs -> tax + money for your wife -> wife wants childcare -> tax + childcare -> childcare employs -> tax + money for their employees -> employees go to the cafe employing your wife ("goto 10")
What you're complaining about is that money going through this cycle decreases. What MUST happen for this cycle to exist, is that the money stays constant. Now obviously I'm not arguing for zero tax, I get that tax is a valid part of this cycle. However, you must see that tax is the big parameter we can change here (and that it must go down, on the plus side, it doesn't need to go down by much). The absolute requirement for these cycles is that money must keep circulating, ideally forever, and the government is supposed to adjust that by controlling the main lever they have: tax.
(Now this ignores that there are many "tax-like" levers, like average rent in an area, bank interest, insurance costs, ... but they would have to change by a lot more than tax would. Also there's a LOT of cycles in the economy and they must all be balanced, not just one)
Plus, I don't think either childcare or cafes are making amounts of profit that would be transformative for employees, if divided fairly. Tax reduction however, doesn't need to be much to be transformative.
Add to that the government, the people who need to fix this, don't control profit, or spending. They only control tax.
So yes, when we have economic downturns, the conventional wisdom is there for a reason. When the government is in trouble, it needs to give up tax income, and lower taxes, while increasing spending. When the government is doing well, it needs to increase tax. The reverse of everybody else. No politician seems to have the discipline to actually do this, but that's still the intention.
I would argue more taxation of that money would allow better circulation of money for the rest of the economy. And would require fewer taxes for the cafe workers of the world.
But the point is that billionaires take money out of circulation, whereas most of the rest of people put it into circulation. I use more of my money as a percentage of my income than a billionaire does. And I would bet that lower income earners than myself use even more of their income as a percentage than I do. If you want money to change hands, you've got to give it to more people. Especially more people who have uses for it.
yes, yes this is true. theyre all either dead or done. we spent decades forcing them to work for tips and bare minimum wage, fighting dirty to keep them out of unions and spending millions to avoid paying them a living wage, and in the last two years the straw that broke the camels back was demanding they put their lives at risk slinging chili's baby back ribs with no health insurance or paid time off during a pandemic where they also have to play covid police to largely ungrateful customers. when the time came for raises bonuses and benefits, we threw together about three months of service-sector hero porn, televised ads golf clapping the dwindling masses of exhausted underpaid slaves for their "Sacrifice" as we laud them for their heroic efforts to rack up back-pay rent debt theyll have to service the minute the government decides covids over because its too expensive.
so yeah we're all out of people willing to do this kind of work because it sucks, and the economist cant seem to figure out why nobody wants this fresh new hell anymore.
The representative who came around and explained this to everybody waiting at the conveyor belt seemed genuinely confused by the fact that they were unable to hire people to do this work, despite the fact that this very industry has been in the media for months/years now, with reports of poor conditions, strikes, exploitatative outsourcing, etc
Pay more. Get more. That is the only solution. Strikes also help.
Well. Unless you are american and your president makes it illegal to strike. (Railroad workers, most recently.)
Some industries are labor intensive. If labor prices exceed a certain level, these business go under. It's not some shill for businesses. It's happened to entire industries.
There needs to be some happy balance between affordable prices and affordable labor.
If for instance, a meal costs around $25 today, then they would have to increase the price to $37 (or a $12 increase). Looking at one regular dish I get at a chain restaurant, I've seen its price increase from $23 to $32 in in the last year. I still eat there about as frequently as I used to. Would I still get it if it was $34.50 assuming the same labor cost? I most likely still would.
On the other hand, if the restaurant decides not to increase pay and has trouble with staffing, along with increase wait times, errors in fulfilling the order, food not prepared well, then I most likely won't eat there as often, if at all.
[1] https://www.lightspeedhq.com/blog/labor-cost-guidelines-rest...
The biggest cost for small restaurants is rent. During COVID all of their dine-in traffic disappeared. At the same time, they got zero breaks on their rent so they ended up paying out the nose and getting nothing for their money. They could’ve handled the same orders operating out of a cheap ghost kitchen in some warehouse district.
Even outside of the black swan that was COVID, running a restaurant is skating on thin ice. Most don’t make it and those who do tend to be high-end restaurants with longstanding wealthy clientele. These fancy places haven’t had any trouble at all hiring servers because the tips are very generous. But for mom and pop taco shop? That’s a tough one!
How many of those customers would switch to eating at home? If a single restaurant changed their prices like that, then they would certainly lose business, but if every restaurant in the area did it, then people would have to collectively change their eating habits. My guess is a lot of them may not.
Plus, the 50% increase doesn't happen all at once. It happens over a longer period of time, meaning that prices will gradually increase. That gradual increase won't drive customers away as much as a sudden price increase should.
Compare this to food you buy in the grocery store - you still need to buy food, even if food prices double overnight. You may buy less of it and pick cheaper brands, but your fundamental consumption habits will not change much.
How exactly were they forced?
Do they or their family play zero role in this and they are just “forced”.
If people were “forced”, skilled and unskilled immigrants wouldn’t be lining up to enter the US.
The only way this can be fixed is acknowledging a tiny minuscule bit of personal responsibility. You can lead a horse to water but you can’t make it drink
https://amp.theguardian.com/us-news/2018/sep/07/us-education...
Until we have singularity and order around AI to build stuff out of thin air there is a cost to existence in society.
By making employment less sticky (Hello covid), people who felt forced to work stopped, and chose to do something else.
"Personnal responsibility" can exist even if most of our decisions are psychological nudges.
That's not the problem, though. The article indicates that there is not much change in the service sector, aside from some increases in sick leave. As it tells, the problem is that the service sector has exploded to want many more workers than ever before. As soon as you fill one position, two more appear out of nowhere.
> the economist cant seem to figure out why nobody wants this fresh new hell anymore.
If anything, they can't figure out why the service sector is growing by leaps and bounds even amid efforts (e.g. rising interest rates) to crash the economy. As the article tells, once it finally does crash then that rapid explanation will halt and labour issues will start to correct.
The shareholder value ideology has destroyed the social contract that we are all in the same boat.
“The Great Retirement Boom”: The Pandemic-Era Surge in Retirements and Implications for Future Labor Force Participation
Additionally all those anecdotes about people “not wanting to work” and “no one wants to work anymore” are false. More people of non retirement age are working as a percent of the labor force now then in the past.
There are also just more jobs now and less people to work them.
And I concur, the capital greed and dehumanised workplace dynamics make more workers give up. Most stay employed of course, but gave up nonetheless. Curious to see what's next, the stick has proven far less effective than the carrot, in the long term in particular.
This stop being the case decades ago when pensions started being phased out for 401Ks
And this is not a bad thing, I cringe at the entire paternalism of expecting the company to take care of you and the “we are family” bullshit.
It will force more honesty in the negotiation process instead of letting politicians and unions kick the can down the road.
But then again what are policemen and firemen going to do? How do there skills help them in the private industry?
Those places aren’t paying salaries competitive with public sector salaries
- malls are dying - offices are seeing more vacancies - casinos are only in a couple of states
The median 401k balance at retirement (65 or over) is $87k.
Plugging samples into any 401k calculator seems to disagree here: even folks making twenty dollars an hour would have a few hundred thousand dollars by retirement age if they squirreled away the recommended 5-10% of their salary.
One could make the case that workers aren't able to save that much, but either way it seems pretty clear that the issue is that for one reason or another people aren't saving enough.
This seems like looking at the obesity epidemic and saying "Exercise is a terrible strategy for most people, the average retirement BMI is 25" -- the strategy itself is fine, people just aren't executing it (for whatever reason)
These folks are public sector rent seekers and it won’t be the good times forever.
1. https://www.forbes.com/sites/adamandrzejewski/2021/03/27/top...
“In 2022 an average of 1.6m Americans missed at least one week of work per month to recuperate—whether from covid, flu or something else—up from 1m before covid.”
In short, the people likely to retire did it in response to Covid at increased levels. And illness (still including covid) has increased work absenteeism by 60%.
They did mention “quiet quitting” but to my eye more in passing-it’s clearly not the driver and they seem to admit it with a limp mention of it. “most quiet quitters are high-earning workers, whereas the biggest labour shortages have been in basic service jobs”
In short, it turns out that the total after-tax disposable income for a dual earner family can end up being less than if just one person, the better-paid one, works, and the other takes care of the kids and handles other family things.
Which brings me to my question: how many people quit or lost a job and discovered that they were better off and happier when one person worked than when both? I'd like to see some studies about that.
There is individual benefit to producing children domestically, sure, but why would the masses care to provide for the benefit of an individual?
1. Encourage families to have more children (this takes time)
2. Increase the by country limits on immigration. This has varied over time (https://www.migrationpolicy.org/programs/data-hub/charts/Ann...)
They not only died at a higher rate, older relatives would be and should be reticent to have constant contact with kids that have been at school half the day.
The baby boomer generation is finally retiring. They worked longer than any other generation and they now hold most of the wealth. Caring for this generation is going to be a massive challenge. Nurses are already at a premium and it is going to get worse.
There aren’t going to be enough nurses, teachers, cashiers, servers, etc. Any job that is tough and is traditionally underpaid will have to increase wages to compete or, and this is sadly more likely, standards will be lowered. This has already happened with teachers. Not enough teachers, no problem! Degree optional.
There are two potential solutions:
1. Increase wages for less desirable jobs to increase labor participation. 2. Relax immigration policy to increase immigration.
Have they really? They are working into older age it would appear, but they also were the first generation to meaningfully delay going to work, opting to go to school instead. The previous generation maybe made it to 8th grade, after which to work they went. Before that, you went to work as soon as your body enabled it.
That leads to the disaster of a huge loss of expertise and manual skills.
Sure we can rebuild factories that have disappeared, but who is going to work in those factories? Who knows how to do fitting and turning these days? Who is skilled in designing equipment? Who knows how to use a sewing-machine? Who knows how to use explosives in mining? What about the use of a soldering-iron? And many more skills which have disappeared.
Then there is the huge amount of background knowledge and expertise that has also disappeared. What is the best design for a ship? Where can we get the cheapest materials for refining X? What is the best, fastest, or cheapest process for refining X? Should we be refining X? Maybe it would be best to use Y instead, because it doesn't corrode as easily as X.
Offshoring is quick and easy. Onshoring is a completely different kettle of fish.
Once manufacturing goes, it very rarely comes back to anywhere near the extent we had before. That capability is gone forever.
YouTube videos! /s
Offshoring is onshoring in the opposite country, so this makes no sense.
Offshoring is the loss of your own workers and expertise.
Onshoring back to your own country is hopefully a regain in workers and expertise. But as I said, that is a completely different kettle of fish. Onshoring overseas manufacturing back to your own country doesn't happen because all those workers and expertise that your country used to have in the past, before those manufacturing companies were offshored have been lost.
Onshoring to the opposite country means that opposite country is the country which gains in both skilled workers and also expertise. Their gain is your loss. Their economy grows, your economy dies. Their workers get richer, your workers have to go on the dole.
Once upon a time, in the 1980s, I had relatives who worked in a Paper factory in Michigan. I wonder where those guys from that town are working now. I wonder how many people, if any, that Paper factory employs now.
Oops. Seems that paper mill was shutdown in 1994 and demolished in 2002. China is today's biggest paper producer. Who coulda foreseen that?
I would argue that the US can on-shore quickly just like China did over the last 20-30 years, if it actually wanted to do it. Unfortunately, there is no political will to do so, but the capability is there.
Nope. Onshoring back to the US is not now cost-effective.
The US is not (at present) a low-wage alternative, like China was in the 1990s. The only way the US will become a low-wage alternative is if/when the US Dollar collapses. That probably won't be for another 5-10 years.
As for the statement regarding low wages being the primary driver, you are ignoring the impact of protectionism. The Chinese do it now, and they did it through the whole process of on-shoring jobs in the United States. The United States traditionally has done it as well, with the exception of the recent decades of globalism, hence the huge reduction of jobs overseas. Furthermore, there have been cheaper workers around the world compared to United States workers for as long as the United States has been in existence. If lower wages always determined the number of jobs in the United States, how did the US grow at incredible rates in the 20th century given the fact that cheaper wages were available around the world?
> Covid caused huge shortages in US labor market, study shows
> https://www.theguardian.com/us-news/2022/sep/13/us-labor-sho...
> “Our estimates suggest Covid-19 illnesses have reduced the US labor force by approximately 500,000 people,” say the study’s authors, Gopi Shah Goda of Stanford University and Evan Soltas of Massachusetts Institute of Technology’s economics department.
> “Covid-19 illnesses persistently reduce labor supply. We estimate that workers with week-long work absences are 7% less likely to be in the labor force one year later compared to otherwise-similar workers who do not miss a week of work for health reasons.”
> The study adds: “Many who fall ill but survive Covid-19 suffer from enduring health problems … approximately 500,000 adults are neither working nor actively looking for work due to the persistent effects of Covid-19 illnesses.”
> How much of our labor force has been lost to COVID-19?
> https://www.marketplace.org/2022/01/24/how-much-labor-force-...
> Richard Johnson, who researches the economics of aging as a senior fellow at the Urban Institute…took excess deaths and COVID deaths by age and applied labor force participation rates by age. And he got 300,000 workers who died as a result of COVID. Add that to the long-haul workers, and we’ve lost 1.9 million workers — or 18% of currently unfilled jobs.
I mean, they didn't expect that people would just stay home for 2 years, then pick right up where they left off, did they?
I know people who had service jobs who found remote work, switched careers, went back to school.
> In a November 30, 2022, speech on “Inflation and the Labor Market,” Federal Reserve chairman Jerome Powell blamed most of the 3.5 million estimated shortfall in the U.S. labor force on premature retirements. He also blamed a large portion – between 280,000 and 680,000 – on “long Covid.” In a footnote, however, Powell acknowledged a far more somber factor: an estimated 400,000 unexpected deaths among working age people.
Edit - here’s the data if anyone is interested: https://www.census.gov/library/stories/2021/12/net-internati...
Economics would dictate that at some point they have to reenter the job market, even if they don't like the price point.
Am I missing something?
Temporary closures to flatten the curve became permanent closures of many businesses. People asked to stay home decided not to come back. Inflation destroyed working class wages. We spent more on Covid by any measure than we spent on WWII. And we had mortality rates similar to countries that did next to nothing. Even China, which is the only major economy that could stay locked down forever, decided to finally accept reality and move on.
Next time let’s be more clear eyed and protect the vulnerable with targeted interventions, encourage people to pay attention to their general health, and not just think we can hit pause on the global economy without messing everything up.