Employment Will Never Be the Same Again

Not for Employees, Not for Employers. A New Era is Upon Us

Mixed Indicators All Over the Country

I mentioned in the last post that we would take some time to look at what is going on in employment, both long term and short term. What is going on will – already is – affect us all for quite a while, often profoundly.

Others have certainly noticed all this. There has been a flood of very good articles, local and national, trying to assess what is going on. One set of numbers that jumps out is that there are about 8 million people out of work and about 10 million jobs unfilled. Yet everywhere employers cannot find enough employees.

What gives? A series of mismatches on a scale we have not seen before. We will look at what that means.Today, let’s see if we can take a relatively simplified examination and make some judgements. To quote that famous philosopher Dorothy, we are not in Kansas anymore. A new age is upon us.

 The Pandemic Effect

The Pandemic threw millions of people out of work. Millions of jobs disappeared, often without warning. Millions more jobs shifted to part-time or remote work operations, where that was possible.

For over a year now, life has changed immensely for millions of families. People formally retired at much higher rates than normal – they are not coming back to the job market. Lest we forget, over 650,000 Americans have died of this disease; they are not coming back either, obviously. Many of those worked in various components of the service industry.

About 150,00 more are being infected every day; over 30,000 a day are being hospitalized. More than a thousand a day are dying right now. So there we see are more that either are not coming back into the job market or will not for some time. Still more went into other lines of work when they lost their pre-pandemic jobs. For the most part, they also are not coming back into the pool of people looking for jobs.

While I refer to all this as Pandemic Effect, know that some of these were changes waiting to happen. The pandemic was the actualizer, not solely the creator.

What Employers and Businesses Hope to See

Employers and governments are hoping that with the end of the Federal unemployment supplements and the opening of schools, there will be a flood of people returning to work. Both events might lead to some employment increases, but I would not count on much.

Twenty-two states terminated the federal supplements completely, four more did partially, some time ago. The measured jobs increase was 0.02%. Schools are indeed opening, but they are closing again by the thousands as outbreaks occur.

And remember, this Delta variant infects children. Approval for shots for children may come as early as this month, but for now they are vulnerable.

Add to that the nut jobs protesting masks in schools, and it is not hard to imagine millions returning to remote learning, as bad as that is. And a huge number of day care providers are gone, either because of infection fears or the inability to find workers.

In the meantime, real wages are going up appreciably, especially in sectors notoriously underpaid in the past. Benefits are being added, as are bonuses. People are being hired for positions without real qualifications, but with potential to be trained.

All of this means things and services are likely to cost us all more, but these are social goods worth the increased costs. Until we get a decent national minimum wage, this small window of opportunity created by the marketplace should be seized.

What Employees Are Evaluating

Let’s be clear. A lot of people are out of work and looking for a job. Still, job seekers have never been in a better position to bargain. And some are ready to engage in that bargaining. For starters, a lot of people were in the service, especially the leisure sectors, lost their jobs.

A great many decided they did not want to be part of something so fragile to economic disruptions. Estimates vary, but perhaps as many as 40% of these folks left their old sector for something else and are not coming back.

Still others simply had time to reflect on life, thanks to the pandemic, and made some decisions. Some decided they really preferred working at home (which was not the early trend) and moved on to work that let them do that.

Others decided their former work was unrewarding and took the opportunity to move to something else, often getting training and/or certifications along the way. Others recognized their old employers took advantage of them and treated them badly; too many other options to go back to all that.

Bottom line is that a lot of people are no longer available to their old jobs, permanently. Others may be ready to come back (after all, about 75% of jobs lost to the pandemic are back now), but over fear of the latest pandemic surge and lack of childcare, cannot or will not come back just yet.

What are the Likely Longer-Term Outcomes?

I don’t think anyone really knows, but here are my 3 bets:

  • The employee/job match will get marginally better by mid OCT or so. This also presumes COVID will be more under control by then, as the national vaccination rate is now approaching 80%.
  • Salaries and benefits will settle in at higher, more just rates. This would be easier for small businesses to handle if an appropriate national living wage was adapted. For now, they will have to take the risk or do without employees.
  • The new normal will settle in about 10% short the number of job hunters that would otherwise be out there. This will be permanent. We are unlikely to ever see full employment and almost all jobs covered as we did in the old days.
Cue the Future: Say Hello to Your Friendly Robot

It won’t happen tomorrow, but sooner than you think you are likely to be approached by a robot at your dining table, there to give you the days specials and take your order. It might look very human, which would be both reassuring and creepy, or it might look like a mechanized cartoon, to reemphasize this is a machine.

Real people waiters will be in the room at a very low density, ready to step in as needed – much like the clerk on the self-check aisles in supermarkets today.

Automation, artificial intelligence, and similar technologies will get a boost out of this. Stocking of shelves, receptionists, customer service – all will increasingly be the land of automatons.

Get used to it. I have a hard time imagining any position that could not be at least partly done by a smart robot. Including doctor or other professional.

If this really catches on and starts eliminating workers who need the job (always a risk), we have another problem. It is one that has been raised before and can be addressed.

But that is another blog. This is Bill Clontz (or his automaton) signing off…..

        Bill Clontz

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