The subject matter may be serious but the snark, bite and irreverence of the Chad and Cheese Podcast is very much still in there as our two hosts discuss The Economy (deliberate caps).
Joel Cheeseman and Chad Sowash welcome Andrew Flowers, labor economist with Appcast, to talk about why everyone’s leaving their jobs, where they’re going and when they’re going to come back. Yep, we’re talking supply chain issues. 4.4 million Americans quit in November, and that’s where they start. Here’s Flowers:
“We see these quit rates (which is the share of workers in a given month who voluntarily leave their job) at all-time highs at 3% for all employees across the board, but it’s particularly high for workers in lower-wage industries.
“And COVID-19-sensitive industries like retail or restaurant workers, we’ve seen quit rates above 6% in September…this ‘Great Resignation’ is a big contributor to the broader labor shortages that I know employers face, that recruiters face, but let’s just dig in for a second – what is it?
“Some people think, okay, ‘resignation’: does that mean people are just giving up on work and moving to a commune to grow their own organic food and leave the workforce? No, when people quit by and large, they quit because they think the economy is strong and because they have another job lined up.”
Co-host Sowash has thoughts: “…we have all these minimum wage workers who we’ve gotten into their psyche, [and] called them essential. Now they understand that they are essential for the supply chain, but yet they’re not receiving essential wages.
“So do you think that not just because of COVID-19, but also because of many of these people seeing that they were essential to moving and keeping the economy running, that they believe they deserve more cash and maybe a better existence in life?”
Flowers: “I think there’s definitely something to that. They realize that this is their moment to strike. Not literally strike though. In some cases, you’d see strikes at John Deere and other places, but this is their moment to take advantage of the leverage that they have, given that it’s a really difficult time to fill open positions if you’re a recruiter.
“And so the workers in these industries who are switching jobs, we find based on data are actually seeing the largest wage increases, right? So wages are going up in general for all workers, but particularly for lower-income workers, lower-wage workers, and particularly for job switchers.”
We know how important overseas workers are in numerous industries, and the ‘Great Resignation’ really is throwing up some rare and crazy situations, both in the US and globally.
Cheeseman tackles it head on: “I don’t think immigration gets enough publicity on this topic. You have some thoughts on that and your presentation that you did recently about immigration, and how the lack of new people coming into the country impacts this whole equation.”
Flowers: “Yeah. It’s a huge factor in terms of labor shortages [and] in terms of recruiting. And let’s break it down into two parts; there’s the short-term impact of immigration changes, and then there’s the long term.
“So just during the pandemic, it’s estimated that the US economy lost about a million workers just by visa processing slowing down, and when you look at the ‘temporary work’ eligible visas that are issued by the US government, well, those visas started to go to zero, because of public health concerns and border closings. A lot of industry industries suffered because they rely on those temporary work visa workers.
“So that’s the short-term impact. Now, we’re speaking in November of 2021, and just a few weeks ago, our land borders opened up with Canada and Mexico and visa processing will hopefully continue to increase as – knock on wood – the virus subsides. That’s a temporary impediment.
“But the bigger factor is the second one, the long-term factor, and this is where demographics come in; the US economy’s working age population without immigration actually declined last year in 2020.
“Over the decade from 2010 to 2020…our overall population growth was the slowest it’s ever been, in a decade. So as fertility rates or as birth rates are declining, and as we have immigration not coming in to solve the worker shortage, we’re going to face a future where just the pure math, the demographics, mean that workers are ever more scarce.
“And it’s going to empower workers relative to employers in the long run, unless we do something about immigration, because again, our working age population is projected to decline in the US in the future without immigration.”
Sowash: “So what I’m hearing is tear down that wall.”
A zinger to end on. We can’t give it all away, but you can listen to the full episode above.
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