It’s January 25, 2023. Here’s the rundown:
Why nobody wants to work anymore
Is nature money?
Numbers and links
Why nobody wants to work anymore
Where or where did all the workers go?
You’ve heard all about the labor shortage by now. Workers are hard to come by for many businesses, and though it’s been easy to blame increased unemployment payments and other pandemic-related stimulus measures — which mostly ended almost a year and a half ago — many people have not returned to the workforce.
This has created a lot of issues, and is part of the reason that prices are rising. Businesses have had to pay more for labor, which has caused them to increase prices, which has helped fuel inflation. I think we’ve been long due for an increase in average wages, of course, now workers need to hope their pay increases (assuming they got one at all) outpace the rate of inflation.
But that’s another topic.
The question remains: Where are all the workers? The answer is both complicated and very simple. But I think it’s mostly been figured out, and there are two things at play here:
One, the pre-pandemic economy had a lot of people working who evidently did not need to. They left the labor force, and aren’t coming back. Why would they?
And two: For at least some people, it’s not worth it to have a job.
The second part is perhaps the most important at the current time. I've had minimum-wage jobs before, so I know what it’s like to feel like you’re working your ass off for little or no reason. That’s the problem here — we have a lot of people who are or were working in jobs that don’t pay them enough to cover their expenses. So, what’s the point? If you work full-time and can’t afford to pay your rent, why bother?
A recent Bloomberg article, discussing the apparent disconnect between the 3.5% unemployment rate and the fact that there are 2.6 million people “missing” from the labor force, digs into this a little bit. The big question at the center of it all is how those 2.6 million people are able to get by without working.
Here, you can see the “gap” in the labor force participation rate pre and post-pandemic:
Again, I think we’re learning that some of those people who were previously working evidently did not need to. It’s also that some households are simply doing with less — think about the number of people who quit their jobs to stay home with the kids (or elderly parents), given that the price of childcare exceeded the earnings of an additional earner. The rest? Well, it’s hard to say, but we did lose 1.1 million people to the pandemic, lots of people are dealing with chronic issues from COVID and maybe can’t go back to work, and other people are finding ways to get by.
But in my head, I keep coming back to a simple answer that fills the gap: Many jobs simply aren’t worth working. They don’t pay enough, the hours are terrible, they offer no benefits. What many employers consider to be the market rate for those workers — often at or near minimum wage — isn’t going to cut it anymore.
I think many employers are still stuck in a 2009-era sense of fog, in which it was more or less an expectation that potential employees would be competing for positions — not the other way around. I guess this will all work out over time, but if we go by the unemployment metrics, which count people as unemployed who are actively looking for work, then you’d have to conclude that almost everybody who wants a job has one (for now).
So, it’s not so much that “nobody wants to work anymore,” as if there was some magical time in which everybody really wanted to be a cashier or bellhop or whatever, the economy has instead been reshuffled and employers need to adjust. Everybody has a price, and employers just need to find the price for the “missing” workers.
As with most things, this will all find some sort of equilibrium over time. It’s nothing a good old-fashioned recession can’t fix.
Is nature money?
The Biden administration wants to “put nature on the nation’s balance sheet.”
Something you may have missed: The Biden administration released a plan to “put nature on the nation’s balance sheet,” which it says will help “understand nature’s critical contributions to the U.S. economy and to guide policy and business decisions moving forward.”
What does that mean? I guess it means we’re trying to figure out the costs and benefits that nature contributes to the economy. They call this “natural capital,” and could include “natural assets” such as land, water, minerals, animals, and plants.” Essentially, this plan or strategy is attempting to find ways to account for that natural capital and count it as a part of the nation’s overall economy.
I’m too dumb to figure out how this will all work, but I do agree, in principle, that we should be taking into account our “natural capital.” We already do, in many respects, in terms of land and property values, water, and mineral rights. But other things have value, too. Forests have value (aside from potential timber sales), in that they clean the air. Wild animals have value, too, as they’re a part of the overall ecosystem which keeps us all alive.
But it is hard to look at a herd of deer on the side of the road and figure out how Bambi and company figure into our national GDP. That herd of deer is a type of wealth, though, and has value. If we were to kill all the deer, someone would see a short-term benefit in food and fur. But what’s the benefit of letting them continue to live their lives? I’m not sure, but I don’t think it’s accurate to say that there is none.
So, while I don’t know how this will work or the implications exactly, I like the idea of trying to figure out how the intangible, natural world in the U.S. has value to the overall economy. I think there are plenty of reasons to be skeptical that this will actually amount to anything other than a “look we did a thing, praise us” plan from the government, but I guess we’ll see.
We do need to start taking our stewardship of the environment more seriously. I think we need to tax carbon. I think we need to start thinking about the real consequences of sucking rivers dry and overusing our natural resources. Maybe this can be a part of that — maybe not.
I do think it’s interesting to try and find a way to reframe our thinking around nature and “natural assets” as contributors to the economy, though.
Numbers, links, and more
7.4%: The rise in median weekly earnings for all workers, year-over-year, at the end of 2022. That outpaced the inflation rate of 7.1%. (The Wall Street Journal)
$2.02 billion: The total gross amount the most recent “Avatar” movie has brought in — not bad for a sequel to a movie that came out 14 years ago. Maybe I should see these at some point? (The Wrap)
$175 million: What JPMorgan paid to a young woman, Charlie Javice, for a bunch of bullshit. (The New York Times)
Nice guys finish last?: Researchers set out to see if jerks actually do win in the end. (Insider)
Strike anywhere: Workers strike less than they used to, and now we know why: More debt, and a fear of losing their jobs. (Wiley Online Library)
Playing for $6: An interesting look at the financials of pro tennis players. (ESPN)