Inflation

[dudog84]

Walmart is based on lower prices and low margins because of an economies of scale advantage. This is how they undercut mom and pop stores. They have to keep prices low in order to have the business model they do. And I don't want any land in Florida. Too hot. If you have something near Asheville or Charleston we can talk.

Average high and low for my burg in July: 90 and 73. For Charleston, SC: 88 and 77. Just sayin'.

Unless you were talking about West Virginia. It is almost heaven, I hear.

[ClemmonsDevil]

Average high and low for my burg in July: 90 and 73. For Charleston, SC: 88 and 77. Just sayin'.

Unless you were talking about West Virginia. It is almost heaven, I hear.

Ha! So they say.

[mpj96]

I've heard from some pretty smart economists who say the worker shortage we are seeing is not folks unwilling to work but an actual shortage brought on by:

1) Less immigration (legal and illegal) both due to crackdowns by the previous administration and less movement across borders due to the pandemic. There are simply fewer low-wage immigrant workers in the US today than in previous years
2) Moms (and some dads) who have been staying home to take care of kids who have been unable to attend schools or other day-care programs
3) Students who have chosen not to take low-paying jobs because it was seen as dangerous during the pandemic

I know there is a belief that enhanced government unemployment benefits have caused the current worker shortage, but what I have read and seen seems to indicate that is not the case. All of the above 3 examples of folks not in the workforce are cases where unemployment benefits would not be available. The immigrants are not eligible, the moms who voluntarily leave a job to take care of kids are not eligible, and the students choosing not to work do not have enough past earned income to qualify for unemployment.

-Jason "I really hope folks don't see this as political... I'm not trying to have a debate about unemployment benefits, just explaining what appears to be the cause of the worker shortage in the US today" Evans

High unemployment benefits are certainly not the sole cause, but they are a cause. The rationale for expanded benefits due to the pandemic appears to be all but gone in most of the US these days. The numbers are lower than they have been at any point since the beginning of its emergence in the US. Almost every business operation you pass has "Now Hiring" signs out front.

Trying my best to avoid the political, here are two points that seem to me to be economic / apolitical:

First, providing additional access to capital to folks who will immediately spend a large percentage of it is a good thing for the economy. The businesses that these folks purchase from will prosper. The suppliers to and employees of those businesses will prosper. The folks receiving capital will have the opportunity to spend it in the way they think best.

Second, where work is available, requiring folks to be unemployed as a precondition to access capital is generally a bad thing for the economy as it incentivizes a lack of productivity. Work has a synergistic impact on the economy -- improving the economic health of the employer, employee, vendors, investors/ owners and, in most cases, customers.

[bundabergdevil]

Ha! So they say.

Not sure about heaven but they have a new National Park.

[Kdogg]

I've heard from some pretty smart economists who say the worker shortage we are seeing is not folks unwilling to work but an actual shortage brought on by:

[INDENT] 1) Less immigration (legal and illegal) both due to crackdowns by the previous administration and less movement across borders due to the pandemic. There are simply fewer low-wage immigrant workers in the US today than in previous years

I live in a tourist dependent area. We were having a seasonal shortage of workers pre-pandemic because the European J1 visa kids stop coming around 2017. They were waitress/waiters, life guards, housekeepers etc… Some would even work two jobs for three summer months. I’m not sure if that pool of workers ever come back.

[bundabergdevil]

I live in a tourist dependent area. We were having a seasonal shortage of workers pre-pandemic because the European J1 visa kids stop coming around 2017. They were waitress/waiters, life guards, housekeepers etc… Some would even work two jobs for three summer months. I’m not sure if that pool of workers ever come back.

You live in an Atlantic beach town?

[Kdogg]

You live in an Atlantic beach town?

Yup.

[Bluedog]

My assumption (and I think you likely agree to some extent) is that there is a greater than zero number of people who are sitting out due to unemployment benefits. For example, some of the parents who are staying home are those who lost jobs, are getting unemployment, and are not looking for a new job quite as hard as if they weren't getting the unemployment because the jobs they can find don't pay too much more than unemployment, child care options are limited now, and once they pay for that, they are better off financially just staying home. So they are being more picky.

I know someone who fits this bill. At this point, she does want to work more hours soon though. Ironically, she moved to a state where the governor put the kibosh on extending unemployment but she's getting unemployment from where she used to live and it's still around there. I guess that'd be a good "natural experiment". Compare the states that have kept it in place vs. those that recently ended it.

[budwom]

For what's it's worth, the U.S. Chamber of Commerce is kicking off an initiative to find much needed workers.
I think it's interesting to see what the CEO of Best Buy is attributing the lack of workers to:
1) scant childcare
2) ongoing health concerns
3) more competition
4) change in expectations and tolerance for working conditions


Echoing Kdogg, we have a very tourist dependent economy as well, and we are also missing the workers who come in from abroad...furthermore we're a bit screwed that the Canada border is still closed, those nice people like to come down here and spend money in abundance...

[ClemmonsDevil]

For what's it's worth, the U.S. Chamber of Commerce is kicking off an initiative to find much needed workers.
I think it's interesting to see what the CEO of Best Buy is attributing the lack of workers to:
1) scant childcare
2) ongoing health concerns
3) more competition
4) change in expectations and tolerance for working conditions


Echoing Kdogg, we have a very tourist dependent economy as well, and we are also missing the workers who come in from abroad...furthermore we're a bit screwed that the Canada border is still closed, those nice people like to come down here and spend money in abundance...

I think that is a very nuanced reading of the situation by the Best Buy CEO. It's almost as if very complex issues have correspondingly complex variables and solutions. Or something.

[budwom]

I think that is a very nuanced reading of the situation by the Best Buy CEO. It's almost as if very complex issues have correspondingly complex variables and solutions. Or something.

certainly the childcare, competition and working conditions items seem to require more money to overcome, yes? We hear about supply and demand all the time, right now workers are very much in demand, time to cough up a bit more money I'd say.

[ClemmonsDevil]

certainly the childcare, competition and working conditions items seem to require more money to overcome, yes? We hear about supply and demand all the time, right now workers are very much in demand, time to cough up a bit more money I'd say.

There is a reconfiguring of the workforce occurring it seems. People want more pay for work and that seems to be part of what is going on here. The people choosing to stay home are workers who made <32K last year. We have haggled back and forth about the $15/hour minimum wage but the worker shortage seems to be making a relative end run around the minimum wage scale anyway. If you can only get workers by paying $12-15/hour then the "minimum wage" as defined politically becomes a moot point. My family does very well and I am no bomb throwing anarchist/socialist, but I tend to side with workers and if we have to pay a bit more to procure goods and services and the upshot of that is workers at the lower end of the scale make a better wage then...sweet.

[budwom]

There is a reconfiguring of the workforce occurring it seems. People want more pay for work and that seems to be part of what is going on here. The people choosing to stay home are workers who made <32K last year. We have haggled back and forth about the $15/hour minimum wage but the worker shortage seems to be making a relative end run around the minimum wage scale anyway. If you can only get workers by paying $12-15/hour then the "minimum wage" as defined politically becomes a moot point. My family does very well and I am no bomb throwing anarchist/socialist, but I tend to side with workers and if we have to pay a bit more to procure goods and services and the upshot of that is workers at the lower end of the scale make a better wage then...sweet.

that's where I am as well, and agree that the supply demand situation right now is making the $15 minimum wage somewhat moot in many places.
I enjoy going to places that treat their workers well...the local Costco (like all others) pays very well, with good benefits, and they get smart, motivated, efficient people as a result...checkout there is SO much better than in many places...lines can be long at times (which I avoid) but those people work fast and well...

[CrazyNotCrazie]

that's where I am as well, and agree that the supply demand situation right now is making the $15 minimum wage somewhat moot in many places.
I enjoy going to places that treat their workers well...the local Costco (like all others) pays very well, with good benefits, and they get smart, motivated, efficient people as a result...checkout there is SO much better than in many places...lines can be long at times (which I avoid) but those people work fast and well...

When Biden took office the Democrats brought up the minimum wage as a fairly high priority issue. They got some push back, and I don't know if they also read the tea leaves that it would take care of itself to some extent so decided to save their political capital for other areas. I anecdotally have been hearing a lot about bars and restaurants in the NY-area having trouble reopening as much as they are permitted because they can't find people to work. I assume some of them can get student summer workers to help for the summer and hopefully can return to normalcy in the fall, but as others have noted, the normal flow of international summer workers is much less than normal.

[budwom]

When Biden took office the Democrats brought up the minimum wage as a fairly high priority issue. They got some push back, and I don't know if they also read the tea leaves that it would take care of itself to some extent so decided to save their political capital for other areas. I anecdotally have been hearing a lot about bars and restaurants in the NY-area having trouble reopening as much as they are permitted because they can't find people to work. I assume some of them can get student summer workers to help for the summer and hopefully can return to normalcy in the fall, but as others have noted, the normal flow of international summer workers is much less than normal.

yes, the restaurant situation is tough up here as well...making it especially bad, of course, is that waitpersons are often paid below minimum wage because they are (hopefully) tipped. And irregular hours and slow days can make this a difficult living. Along those same lines, the habit of MANY employers to employ people part-time so as to not provide benefits is not going to entice people in this job market...

[Mtn.Devil.91.92.01.10.15]

yes, the restaurant situation is tough up here as well...making it especially bad, of course, is that waitpersons are often paid below minimum wage because they are (hopefully) tipped. And irregular hours and slow days can make this a difficult living. Along those same lines, the habit of MANY employers to employ people part-time so as to not provide benefits is not going to entice people in this job market...

As someone who worked in the service industry for years and who knows many active customer service professionals - lotsa folks just flat out changed jobs. They were sick of the schedule, the up and down pay checks, the abuse (during Covid-19) from cranky patrons regarding policies they had no control over.

Here in Asheville many very reputable restaurants are open limited hours because there simply aren't enough staff. I do feel badly for the places with labor shortages, but also I don't fault anyone for deciding they are tired of all the stress that accompanies that career.

The other factor is many people have recognized that maybe they don't have to eat out every other day of the week.

Some sort of rejiggering is going to have to occur if we decide as a society that these really are "essential" jobs.

[cato]

For what's it's worth, the U.S. Chamber of Commerce is kicking off an initiative to find much needed workers.
I think it's interesting to see what the CEO of Best Buy is attributing the lack of workers to:
1) scant childcare
2) ongoing health concerns
3) more competition
4) change in expectations and tolerance for working conditions


Echoing Kdogg, we have a very tourist dependent economy as well, and we are also missing the workers who come in from abroad...furthermore we're a bit screwed that the Canada border is still closed, those nice people like to come down here and spend money in abundance...

Perhaps this is a combination of 1a and 4a, but I would add the cost of housing to this list in many areas. The push and pull between lack of quality childcare, the immense expense of childcare and the difficultly finding a home within a reasonable commute of your work has led many parents to say flip it. That job at that pay is not worth the expense, time and stress of juggling everything just to barely keep my family afloat (if that).

[budwom]

Perhaps this is a combination of 1a and 4a, but I would add the cost of housing to this list in many areas. The push and pull between lack of quality childcare, the immense expense of childcare and the difficultly finding a home within a reasonable commute of your work has led many parents to say flip it. That job at that pay is not worth the expense, time and stress of juggling everything just to barely keep my family afloat (if that).

Absolutely true.

The one argument I hear from restaurants which I'm having trouble endorsing is the notion that they can't raise wages because then they couldn't compete.
It seems to me that ALL restaurants in an area deal with the same labor situation, including shortages, so yeah, if you have to pay $3-4 more per hour to attract staff (of all kinds, kitchen, etc) so do your competitors.

The cost of rent here is crazy high, exacerbated by the state university being in town...the irregular hours and limited pay at restaurants is a tough way to make a living...

[CrazyNotCrazie]

Absolutely true.

The one argument I hear from restaurants which I'm having trouble endorsing is the notion that they can't raise wages because then they couldn't compete.
It seems to me that ALL restaurants in an area deal with the same labor situation, including shortages, so yeah, if you have to pay $3-4 more per hour to attract staff (of all kinds, kitchen, etc) so do your competitors.

The cost of rent here is crazy high, exacerbated by the state university being in town...the irregular hours and limited pay at restaurants is a tough way to make a living...

In this situation, if I am remembering my Duke economics classes correctly, the restaurants would raise prices to allow them to raise pay. Then the question becomes whether people will pay the increased amount to eat there. If they won't, the restaurant will close. If a lot of restaurants close, the cost of rent will have to go down as landlords will need to have income. And eventually you hit some sort of equilibrium between rent, salaries and food prices.

There are a number of empty storefronts in my neighborhood in Manhattan and people always wonder how the landlords keep them empty for so long. There is always discussion about whether there is some type of tax advantage to keeping the store empty rather than renting at a lower price, because intuitively, one would think that renting for $1 is better than renting for $0, assuming that you have exhausted all opportunities to rent for more than $1 and you don't lock into a long-term lease at $1 that prevents you from getting better prices in the mid-term.

[budwom]

In this situation, if I am remembering my Duke economics classes correctly, the restaurants would raise prices to allow them to raise pay. Then the question becomes whether people will pay the increased amount to eat there. If they won't, the restaurant will close. If a lot of restaurants close, the cost of rent will have to go down as landlords will need to have income. And eventually you hit some sort of equilibrium between rent, salaries and food prices.

There are a number of empty storefronts in my neighborhood in Manhattan and people always wonder how the landlords keep them empty for so long. There is always discussion about whether there is some type of tax advantage to keeping the store empty rather than renting at a lower price, because intuitively, one would think that renting for $1 is better than renting for $0, assuming that you have exhausted all opportunities to rent for more than $1 and you don't lock into a long-term lease at $1 that prevents you from getting better prices in the mid-term.

Agreed, I think we will see a modest increase in the cost of dining which I do not believe will horribly impact the industry, which is a very very tough one...long hours, slim margins...