The Great Resignation

 

A large contributor to the supply chain shortage and, for sure, the service disruptions is the lack of workers.  The phenomena we are experiencing is called the great resignation.  This is a bit of a mystery to me because it seems like just few years ago we were more worried about unemployment and now it is labor shortages. 

People are simply leaving their jobs.  Some are leaving for other jobs, some, if they can, are leaving the job market entirely i.e. they are retiring.  We know the is a projected decrease in the college age student population in the next five years.  Maybe we a lot of people retiring and not enough people entering the job market. 

Consider the trucking industry.  There is currently a shortage of 80,000 truck drivers in this country according the American Trucking Associations as reported on trucking.org.  This is the biggest gap ever in the long-haul trucking industry.  No wonder the container ports of Long Beach and Los Angeles were backed up last month.  Whatever the inefficiencies of port operations, they couldn’t move the containers out of the yard as fast as they could unload ships. 

Part of the reason given for the driver shortage is that the high average age of the current driver base.  They are retiring at a pace quicker than new drivers are entering the profession.  Other factors include the fact that women make up only 7% of drivers and the long-haul driver lifestyle conflicts with family life.  The report anticipates the shortage to be 160,000 by 2030.  It seems highly unlikely we stand around dumbfounded for eight years and allow this to happen.  One solution could be driverless vehicles if we can master the technology including the AI to make that happen in a safe and reliable manner.  Another solution is the simple economic principle of supply and demand.  If the demand for drivers exceeds the supply, the industry simply has to pay more.

Restaurants, unable to hire enough staff, have curtailed hours and cut their menus down simply to serve their customers properly.  An article in Business Insider further supported the boomer retirement factor for the labor shortage. 

Ed Rensi, who served as the fast-food chain's CEO until 1997, said during an interview with Fox Business on Tuesday that the number of people starting to retire has been overlooked in the conversation about labor challenges nationwide. As Rensi pointed out, the oldest baby boomers are now in their mid-70s, which means even some of their kids are getting close to retirement.

 

"The retirement numbers are going to start to accelerate, and there's going to be a lot of upward mobility because they're leaving the workforce, which is going to leave a shortage at the bottom end," Rensi said. "And, boy, we're feeling it big time at restaurants, barbershops, day-care centers. It's a nightmare."

There had been a trend of folks staying in the labor market longer, past 65 years old, to maybe 70.  The recent gains in the stock market and the stress brought on by two years of pandemic has many boomers deciding to retire.   A survey quoted in the article showed that people are aiming to retire earlier again at an average age of 62.  This should further exacerbate the problem.

So, what do we do?  That is the multibillion-dollar question.  Automation will certainly cover some of the gap.  More automated check-outs in retail and restaurants will help as will kiosk or cellphone-based ordering in all but the swankiest restaurants.  There is another possible consequence, the more we need people to fill and do jobs, the more we will have to pay more to fill the jobs and that will increase our cost of living.  The other thing that will certainly help is to open immigration to fill the entry level jobs in the service, manufacturing, and transportation industries.  This could help resolve the illegal immigration issue.

Who would’a thunk?

 

trucking.org