The unthinkable has happened. Millions of Americans have embraced freedom from work and have now reclaimed their lives from the dreaded grind of employment. So many have walked away that businesses can’t fill job openings. We did it! Freedom is in the air and so many people have the opportunity now to build that business, find that calling, or go bohemian.
There’s no longer a need for a blog called “Quit Your Job” these days. It’s already been done.
But back to reality. While the above sounds utopian, that’s not what is going on exactly. At the moment, unemployment is high…but companies are also struggling to hire anybody. A recent article from the New York Times titled “Unemployment is High. Why Are Businesses Struggling to Hire?” lays it out:
“…the data tables produced every month by the Bureau of Labor Statistics, which suggest a plentiful supply of would-be workers. The unemployment rate is 6 percent, representing 9.7 million Americans who say they are actively looking for work…[while] businesses, especially in the restaurant and other service industries, say they face a potentially catastrophic inability to hire.”
So we’ve got jobs and people looking for jobs, yet the jobs remain unfilled and the people remain unemployed. What gives? Recently, a McDonald’s in Florida is offering people $50 just to come in to interview for a job because they’re so short staffed and unable to hire. You read that correctly. McDonald’s — once the employer used as a threat for people who didn’t want to go to school or study (as in “You’ll end up working at McDonald’s”) — can’t even hire right now. McDonald’s is also offering a $400 signing bonus if you end up getting the job. The state of Montana is bribing citizens with $1,200 if they go back to work, “blaming an expansion of unemployment benefits for a labor shortage in the state.”
We’re through the looking glass here people.
Do people not need jobs anymore? Is work outmoded? When the pandemic started, millions of Americans were let go or furloughed, feeding huge unemployment numbers to all-time highs. American had staggering food lines not seen since the Great Depression in 2020.
Now states are reopening up, restrictions easing off, and businesses trying to return to normal. But the workers aren’t coming back. Is it because of COVID fears and aversion to risk being around people? Maybe that’s part of it. According to the Chicago Tribune, “A Census survey taken in late March shows that 6.3 million didn’t seek work because they had to care for a child, and 4.1 million said they feared contracting or spreading the virus.”
There’s also something else at work here. From the same Chicago Tribune article, entitled “Where Are the Workers?”:
The National Federation of Independent Business found in a March survey of its own members that 42% had job openings they couldn’t fill. Owners cited higher unemployment benefits as one factor. And a study released last month by the National Bureau of Economic Research found that a 10% increase in unemployment benefits during the pandemic led to a 3.6% drop in job applications.
“Unemployment benefits allow workers to be able to wait longer before they take a job, which can make hiring harder,” said Ioana Marinescu, a University of Pennsylvania professor who co-authored the study.”
Unemployment benefits, particularly Federal ones, have caused disruptions in the labor market. A ZeroHedge article, “Biden’s Trillions” Spark Historic Labor Shortage” puts it [perhaps oversimplified] as “trillions in Biden stimulus are now incentivizing potential workers not to seek gainful employment, but to sit back and collect the next stimmy check for doing absolutely nothing in what is becoming the world’s greatest “under the radar” experiment in Universal Basic Income.”
Universal Basic Income (or UBI) is an eventual topic I plan to cover in this blog.
As I was writing this post, the US Chamber of Commerce came out after a dismal April jobs report and suggested to the government to shut off the $300 in extra unemployment benefits: “Based on the Chamber’s analysis, the $300 benefit results in approximately one in four recipients taking home more in unemployment than they earned working.” [Emphasis mine] And just this morning in the local Dunkin Donuts drive-thru I saw a huge poster advertising a free car for getting hired in a management position (I’m assuming it’s a company car but the poster didn’t elaborate).
Between DD and McDonald’s, businesses are literally bribing people to come work for them. Gone are the days, it seems, where winning a job and earning an income were admirable achievements. I guess it comes down to if you can make $900 a week working a job, or $800 not leaving the house…why not take the $800? You don’t have to drive anywhere, do anything, change clothes, or actively participate in society.
Which makes having a blog called “Quit Your Job” all the more abstract.
So government altruism is disrupting the job market. How long can it go on? Businesses still need employees to function. Not having enough employees is also severely disrupting supply chains, causing shortages and empty shelves. Another article from Zerohedge, this one entitled “Biden’s Stimulus Checks ‘Wreck Labor Pool’ As People Get Paid to Stay Home,” quotes the Federal Reserve Bank of Kansas City: “It is very difficult to handle the increased business with supply chain issues across all materials and finding anyone who wants to work. The federal government has incentivized people to stay home and not be productive.” This, combined with extra cash being handed out by the government, is very inflationary (also a future topic on this blog).
As mentioned above, surely this can’t go on, right? Hopefully not. The Federal unemployment bonuses are scheduled to expire in September of this year. If the Federal unemployment benefits expire, people will be making below what employment would bring in, so it only makes sense to return to work. Employers need it. The supply chain needs it. Then again, if the supply chain disruptions cause shortages prices of things increase, which would offset the extra unemployment and people would need to return to work just to afford basics. The only thing that doesn’t make sense is to leave the Federal unemployment bonuses permanent, especially as the country continues to reopen.
The idea behind this blog and “Quit Your Job” is to build something — a business, skills, expertise, ultimately bettering yourself so you no longer need to work for someone else. Taking money from the government and choosing not to work is not bettering yourself. Choosing to do nothing over working is not in the essence of Quitting Your Job.
Just remember, there’s no such thing as a free lunch.