The Independent Market Observer

Kindness, Work, and the Worker Shortfall

Posted by Brad McMillan, CFA, CAIA, MAI

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This entry was posted on Oct 15, 2021 2:29:53 PM

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worker shortfallI’ve gotten a lot of positive feedback on yesterday’s post (thank you!) on how we should be kind, to others and ourselves, given the unprecedented and long-lasting conditions we have been fighting. As I thought more about it, I realized it also resonated with one of the key economic issues we are seeing today: the decision by millions of people to simply drop out of the labor force. The headlines today have multiple references to how people are simply choosing not to work and wondering when, and if, that will change.

What Does Work Mean Now?

I more than suspect the two things are linked. As people struggle with their own and their loved ones’ challenges, work comes to seem less important. In the aftermath of the pandemic, when people didn’t work because they couldn’t, we now have a large part of the population that has had a chance to reflect on what work means—and what it doesn’t. And with many workers getting relatively large wage increases, it seems to be that their partners now have the economic freedom to choose not to work.

In other words, things really are different in the job market now than they were before the pandemic. When you put all of these changes together, they explain most of the changes in the labor market, including the shortfall in workers we are now seeing. Put a bit more briefly and colorfully, companies are having trouble hiring because a lot of people had time to think during the lockdowns. After thinking about it, they decided their jobs stunk—and that they didn’t want to go back.

This issue warrants, and will get, considerably more thought and analysis. I have already written about some of the demographic factors behind the labor shortfall, but the social ones are becoming more important, both now and in the future. This is likely the most influential story of the post-pandemic era. We will be talking much more about it over the next couple of years.

Be Kind

But for the moment, I am going to be kind to myself and cut this short. It has been a busy couple of weeks, and I plan to start the weekend early. Have a good one!

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