Listen, this isn’t hard.
If you’re a small business owner (or you know one), you can scream to your blue in the face. But the facts are the facts: there is no labor shortage. And if you claim there is one, you most likely sound like a ridiculous hypocrite who doesn’t understand your own basic business dynamics.
And you probably also suck at managing people.
So, rather than drowning ourselves in feel-good media pieces about “labor shortages” or “lazy unemployed people,” let’s get a small taste of the actual numbers. You know, the reality beyond the propaganda. Because when you take a look at the jobs data over the past year, several salient details present themselves. And they all add up, not to a lazy workforce, but to a very broken business environment.
First, consider one question no one’s talking asking. How many of the currently unemployed are gig workers or freelancers? After all, there were several changes made to allow them to collect unemployment. But we don’t have to guess: it’s 13 million Americans in this category. Or roughly 41% of those on unemployment, a not small number by any measure.
So, almost half of those unemployed are not the typical employee you might hire. They participate in the labor pool differently, often seeing their efforts as a small business itself. Let me repeat that: gig workers aren’t part of the labor pool because they’re quasi-small businesses too. And they wouldn’t be applying to open jobs in the regular way that you’d expect. However, it’s likely there’s a simple reason no one is talking about this part of the equation. And that’s because it’s hiding a deeply distressing possibility…
If we think of these people as small businesses who cannot get back on their feet, it shatters the narrative about the roaring, red hot economy.
Probably the next biggest and most concerning piece of information we have is the quits data. For the labor market, these are the numbers of people who quit their jobs rather than being fired or laid off. While the Fed has tried to tell us a higher number indicates a healthy economy, nothing could be further from the truth in this upside-down world. And of course, this category doesn’t get to collect unemployment when they leave. But as Mike Shedlock at MishTalk.com points out just this week, we’re seeing people do just that: up and cut out from their jobs at a record number.
Take this job and shove it!
This is an incredibly disturbing sign that something has changed about our business environment. And in this case, it’s not hard to imagine why they’re quitting. Over the past year, business owners across the country have treated their employees like robots, piggy banks, and junk for the junk drawer. One day, they’re laying everyone off and sticking out their own hands for free PPP loans, as many happily fed at the government slop trough themselves. Let me repeat that part too: the business community was more than happy to take free government money earlier in the year. Then the next day, these same business owners are crying when they can’t fill positions. But notice also that there’s little discussion about the wages for the supposed glut of jobs we have or even if they’re full-time.
No, I’m sorry small business owners. I try to sympathize as a businessman myself. And I know many of them. But you were fine with the government dole when it was your business sucking at the tit of the cronies. And most of you had no qualms about cutting employee hours and shutting your doors. Some of you are even talking about mandating vaccines for your staff. Or some of you are also paying a lot of lip-service to toxic woke ideologies.
And you wonder why you can’t fill your open job position? Or put another way: why no one wants to work for you?
After a year of spending time with family, people have new priorities. And you can guess that it most certainly doesn’t include suddenly being on-call on the weekends and every night of the week. Or working for promises of raises that may never come. Or wondering if tomorrow your business may shut its doors again because some stupid government bureaucrat feels like enacting new mandates. Or working for what have obviously become dysfunctional businesses who cry about situations they brought on themselves. Instead, many people, with or without unemployment, are tightening their belts and walking away.
Reflect on that fact for a moment.
You can’t have both a totalitarian, woke medical police state with volatile situations and a functioning, healthy economy. And if you’re a business owner, there’s a good chance you chose the former over the latter last year. And that’s not going to suddenly change overnight. But if you can’t offer good stable employment at market wages (or wages attractive enough to fix this issue) and your fellow businessmen are talking about violating basic workplace rights, for example, or any other host of stupid things businesses are talking about, you know we don’t have a labor shortage.
Instead, what we have is a glut of shitty businesses who can’t compete in the environment they helped create.
But don’t take my word for it. Just look at how many of those endless job opportunity stories we hear about are nothing more than fast food or serving coffee. Do you imagine a white collar worker who made $100,000 last year is going to work for far less flipping hamburgers? Simply do yourself a favor and apply to ten or twenty of these open jobs, and let me know how it goes… if you even get any calls back, which I doubt you will.
Like the real estate market, we’ve broken business.
Personally, my guess is that we’ve broken it for good.