There’s not a labor shortage, there’s a shortage of a set of important skills, and it will take time and higher relative wages to remedy the situation. From Charles Hugh Smith at oftwominds.com:
Great swaths of the American workforce are already on strike or slipping away from the dead-end treadmill.
America’s labor shortage is complex and doesn’t lend itself to the simplistic expectations favored by media talking heads. The Wall Street cheerleaders extol the virtues of “getting America back to work” which is Wall-Street-speak for getting back to exploiting workers to maximize corporate profits.
Long-term demographics have combined with cultural changes and Covid-Lockdown epiphanies to completely re-order America’s labor force beneath the superficial surface of “re-opening.” No one post can do justice to such a complex topic, so I’ll touch on a few of the many inter-connected (and often mutually reinforcing) dynamics.
1. Boomers are leaving the workforce in droves. The statistics are incomplete but we know that a larger percentage of Boomers have been working longer than previous generations. A Pew Research 2018 study documents this: Baby Boomers are staying in the labor force at rates not seen in generations for people their age.
Now Boomers are leaving the workforce. Some are retiring, i.e. qualifying for pensions and/or Social Security benefits, while many others who have been drawing retirement benefits while they continued working are quitting the workforce. A November 2020 report discusses this reversal:
The pace of Boomer retirements has accelerated in the past year: (pewresearch.org)
This is 3.2 million more Boomers than the 25.4 million who were retired in the same quarter of 2019.
According to the Social Security Administration, around 3.2 million workers signed on for their Social Security retirement benefits in 2019, and around 2.7 million more people qualified for disability benefits or as dependents of retirees or disabled workers. Fast Facts & Figures About Social Security, 2020