We're having supply chain problems these days. Paul Krugman writes that, eventually, the bottlenecks will be broken:
Earlier in the pandemic, people compensated for the loss of many services by buying stuff instead. People who couldn’t eat out remodeled their kitchens. People who couldn’t go to gyms bought home exercise equipment.
The result was an astonishing surge in purchases of everything from household appliances to consumer electronics. Early this year real spending on durable goods was more than 30 percent above prepandemic levels, and it’s still very high.
But, when it comes to the American worker, something else is going on:
The labor situation, by contrast, looks like a genuine reduction in supply. Total employment is still five million below its prepandemic peak. Employment in the leisure and hospitality sector is still down more than 9 percent. Yet everything we see suggests a very tight labor market.
On one side, workers are quitting their jobs at unprecedented rates, a sign that they’re confident about finding new jobs. On the other side, employers aren’t just whining about labor shortages, they’re trying to attract workers with pay increases. Over the past six months wages of leisure and hospitality workers have risen at an annual rate of 18 percent, and they are now well above their prepandemic trend.
The sellers’ market in labor has also emboldened union members, who have been much more willing than usual to go on strike after receiving contract offers they consider inadequate.
Workers don't want to return to the status quo:
What seems to be happening instead is that the pandemic led many U.S. workers to rethink their lives and ask whether it was worth staying in the lousy jobs too many of them had.
For America is a rich country that treats many of its workers remarkably badly. Wages are often low; adjusted for inflation, the typical male worker earned virtually no more in 2019 than his counterpart did 40 years earlier. Hours are long: America is a “no-vacation nation,” offering far less time off than other advanced countries. Work is also unstable, with many low-wage workers — and nonwhite workers in particular — subject to unpredictable fluctuations in working hours that can wreak havoc on family life.
And it’s not just employers who treat workers harshly. A significant number of Americans seem to have contempt for the people who provide them with services. According to one recent survey, 62 percent of restaurant workers say they’ve received abusive treatment from customers.
Given these realities, it’s not surprising that many workers are either quitting or reluctant to return to their old jobs. The harder question is, why now? Many Americans hated their jobs two years ago, but they didn’t act on those feelings as much as they are now. What changed?
So what's going on?
Well, it’s only speculation, but it seems quite possible that the pandemic, by upending many Americans’ lives, also caused some of them to reconsider their life choices. Not everyone can afford to quit a hated job, but a significant number of workers seem ready to accept the risk of trying something different — retiring earlier despite the monetary cost, looking for a less unpleasant job in a different industry, and so on.
And while this new choosiness by workers who feel empowered is making consumers’ and business owners’ lives more difficult, let’s be clear: Overall, it’s a good thing. American workers are insisting on a better deal, and it’s in the nation’s interest that they get it.
This moment has been a long time coming.
Image: quotefancy.com
8 comments:
This is a real pleasure to see, Owen. I hope they are able to wield their power far into the future, though there will, of course, be tremendous but predictable backlash from the right-wing which, no doubt, will decry how these people are holding America hostage and threatening the economy.
"A significant number of Americans seem to have contempt for the people who provide them with services. According to one recent survey, 62 percent of restaurant workers say they’ve received abusive treatment from customers."
Sad to see this. I wonder what the Canadian service workers would say. I don't see this behavior in Canada.
We were visiting India in 2007, a return trip after my 1973 hippie sojourn. We were shocked at how the rich folks treated the service workers and the poor folks in general. I speculated that, because most of us affluent, adult Canadians had done jobs in the service industry as teenagers or students, we had some respect for those coming after.
Is this abusive treatment happening now because upward social mobility is dead in America and rich kids no longer 'pay their dues'?
Forty years ago, American industry worried about how to compete with Japan and Germany, two countries that were making high-tech products better and cheaper than America was. American industry made the fatal decision to compete on price by moving manufacturing offshore, to countries with low wages and few if any environmental or safety regulations. Economists warned of the dangers of hollowing out the economy. They warned against technology transfer to low-wage competitors, leaving Americans with shitty service sector jobs. They warned of the fragility of long supply chains.
But those economists were proven wrong, at least in the short term. American business profits went up, with massive gains to the already wealthy. Workers didn't notice their stagnant wages much, since prices stayed low, especially if you shopped at Wal-Mart and the dollar stores that sprang up like mushrooms to replace department stores. Cheap, poor-quality, disposable goods became normal. We tossed them out since they couldn't be repaired and bought more and more in an orgy of consumption. Plastic garbage flooded into our landfills and oceans. Ships burning highly-polluting bunker oil brought ever more crap for us to consume. And trucks burning diesel moved on just-in-time schedules to become rolling warehouses.
But the coronavirus revealed a house of cards. Shipping schedules were thrown into turmoil, goods shortage appeared leading to inflation, and the worldwide shortage of microchips revealed how we'd allowed important industries to be concentrated in too few hands. I'd say the system we've built is broken and I'm not as sanguine as Krugman is that this will be good for workers. We've allowed far too much money to flow into the hands of billionaires, and they will buy policies that keep things that way.
Cap
The shoe is on the other foot, Lorne. It's time that those with wealth learned that their own comfort rests on their ability to share the wealth.
During the pandemic, we've seen cashiers and other service workers receive tongue lashings for just following the rules, PoV. You can't lash out at someone who's not there.
The fact a rocket is a toy for Jeff Bezos is a sign that wealth inequality is still with us, Cap.
I agree with Cap. I really think they've had it. The state is both brittle and dysfunctional. Kevin Phillips, in his 2005 book 'American Theocracy', demonstrates that dominant powers go through a predictable sequence of steps on their way out. One of these is the outsourcing of their manufacturing base as they switch to a FIRE (finance, insurance, real estate) economy. They "grow" money that is used to invest in growing their successor's economy.
There's a wild card this time - climate breakdown. Recent analysis concludes that both China and India are going to have a very difficult time of it. So too Red State America. The Slave States are in for a hammering of extreme heat coupled with severe storm events of rapidly increasing intensity, duration and frequency. This is out of the realm of human experience. All of these transitions we study have happened during the Holocene.
I'm glad that American workers, some of them anyway, are demanding better. It remains to be seen how that plays out over the next decade or two.
I agree with you, Mound. It's time the American worker had something to celebrate. But, long term, Americans are facing a dark future.
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