Tag Archives: labor shortage

A Different Kind Of Florida Man

“Florida man” has become a comedy label, a phrase recognizing the ubiquity of stories about someone from the Sunshine State doing something idiotic or bizarre (but definitely funny).

Business Insider, however, recently had a different sort of “Florida man” story, and it’s worth pondering.

As businesses across the country advertise for workers, as “we are hiring” signs proliferate and every day brings complaints from businesses that tell us they are struggling to find employees, a Florida man decided to test their claims. He submitted at least two applications every day in September, taking care, as he told the magazine, to apply only for positions for which he was qualified.

Joey Holz had watched as business after business complained that the availability of government stimulus money was keeping workers at home and out of the job market. The complaint–and the attribution of the scarcity to government largesse–“was so ubiquitous that he joined a ‘No one wants to work’ Facebook group.”

He said he found it hard to believe that government money was keeping people out of the labor force, especially when the end of expanded federal unemployment benefits did not seem to trigger a surge in employment. The expanded benefits ended in September, but 26 states ended them early in June and July.

“If this extra money that everyone’s supposedly living off of stopped in June and it’s now September, obviously, that’s not what’s stopping them,” he said. Workers have said companies struggling to hire aren’t offering competitive pay and benefits.

So Holz, a former food-service worker and charter-boat crewman, decided to run an experiment.

Holz spent a month applying for jobs, mostly at businesses whose employers had been vocal about a lack of workers . He kept track of those applications in a spreadsheet. After submitting 28 applications, he had received exactly nine email responses, one follow-up phone call, and one interview. That interview was with a construction company that had advertised a full-time job focused on site cleanup paying $10 an hour.

But Holz said the construction company instead tried to offer Florida’s minimum wage of $8.65 to start, even though the wage was scheduled to increase to $10 an hour on September 30. He added that it wanted full-time availability, while scheduling only part time until Holz gained seniority.

None of the companies that bothered to respond were paying over $12 an hour.

On September 29, after submitting 58 applications, Holz posted to Twitter about his saga, saying, ” y’all aren’t desperate for workers, you just miss your slaves.” The post went viral.

Holz acknowledged that his results may not be representative of the larger labor challenges in the country, since his search was local and targeted the most vocal critics of stimulus spending.

Holz is actually employed, and he noted that–despite the media focus on businesses that say they are struggling to hire–his own boss had experienced no staffing issues during the pandemic.

“Nobody leaves those positions because he takes care of his people,” Holz said, referring to his boss.

There is a larger lesson to be learned from the experiment run by this particular “Florida man,” if employers are willing to learn it. Research by the Economic Policy Institute confirms that lesson.

The author of the linked article concedes that, in a large and complex labor market like that of the U.S., there will periodically be pockets of bona fide labor shortages. But the article goes on to confirm “Florida man’s” conclusion: a far more common reason for such shortages is the reluctance of employers to pay enough to attract workers. “Employers post their too-low wages, can’t find workers to fill jobs at that pay level, and claim they’re facing a labor shortage.” A more precise formulation would be “I can’t find the workers I need at the wages I want to pay.”

The EPI analysis also points out that

when restaurant owners can’t find workers to fill openings at wages that aren’t meaningfully higher than they were before the pandemic—even though the jobs are inherently more stressful and potentially dangerous because workers now have to deal with anti-maskers and ongoing health concerns—that’s not a labor shortage, that’s the market functioning. The wages for a harder, riskier job should be higher.

“Florida man” proved the point…

 

 

 

 

Supply and Demand: Workforce Edition

Pete, a frequent commenter to this blog, recently sent me a link to a truly thought-provoking Ted Talk. Aided by charts displaying the birthrates of his and subsequent generations, a German economist predicted a significant worldwide labor shortage by 2030.

Economists have been making these predictions for some time. Perhaps this one struck me so forcefully because of the graphics, or because he emphasized the fact that the size of the available workforce in coming years is not a matter of conjecture; after all, the people in that cohort have already been born. The numbers, as he explained, “are set in stone.”

Nor is it likely that technology will bail us out. It has become abundantly clear that technology creates nearly as many jobs as it replaces. What technology will do, however, is exacerbate the “skills gap” that is currently a major factor in the income disparities we are experiencing.

So—we have an emerging disconnect between the workers we will need and those we will have. Can we speculate about the consequences of that widening disparity?

  • It is likely that people who are highly skilled in areas of economic growth will do extremely well.
  • It is plausible that increasing numbers of older workers—especially in countries where healthcare has extended lifespans—will stay in the labor force longer than is currently the case.
  • The business community (which is already deeply concerned about education and job training) is likely to press those concerns even more vigorously. Many larger enterprises may increase their on-the-job training efforts.
  • Wages are likely to increase across the board. (Whether this will translate into significantly higher prices is an open question; this is where the ability of technology to increase productivity comes into play.)
  • Battles over immigration policy will change dramatically. Countries will compete for workers willing to take the jobs unfilled by declining native workforces.

There are probably many others. But if many or most of these speculative outcomes are correct, the economic, social and cultural consequences will be significant.

On the one hand, it is easy to envision a time in the not-so-distant future when workers are more valued and respected—and better compensated– than is currently the case. The market for labor is not appreciably different from the market for widgets, in the sense that value is set by supply and demand. Companies that fail to recognize the extent to which their employees are assets don’t compete all that well now; it is likely that they will go the way of the dinosaur in a brave new world of worker scarcity.

On the other hand, the need to address our currently self-defeating policies on immigration and to actively encourage an influx of people willing and able to work is likely to create new and unpleasant cultural conflicts. Efforts to resolve the skills gap are likely to increase the growing (unfortunate) tendency to confuse education with job training. The failure to distinguish between the two is already wreaking havoc with our universities, the liberal arts and the humanities.

An older lawyer for whom I used to work had a favorite saying: “There’s only one legal question, and that’s ‘what should we do’?” I think that bit of wisdom goes beyond the practice of law.

If the planet is facing an imminent shortage of workers, what should policymakers do?

And what will it take to make them do it? After all, we also know that climate change will wreak havoc, but our lawmakers have largely dismissed the threat and ignored the need to act. Will they be equally incapable of addressing the coming shortage of labor?

Stay tuned.