Qwick Takes: Labor shortage plus strikes for higher pay — how will it end?
This week, Talking Biz News Deputy Editor Erica Thompson reached out to Qwoted’s community of experts to inquire about recent labor strikes and the persistent labor shortage.
Check out some of the top commentary:
Mallory C. Vachon, Ph.D., senior economist, LaborIQ® by ThinkWhy:
These labor strikes reinforce some of the same themes we already observe. Workers are not only looking for better conditions — pay, benefits, safety and flexibility — but they also have a lot of power right now, no matter the industry or levels of pay and experience. In other white-collar or non-union jobs, we’ve seen increased job-switching and record-level quits.
Many union workers are in industries — health care, education or manufacturing — that have been disproportionately impacted by COVID-19. Any potential reductions to talent availability could further diminish consumer confidence, given the slowing pace of the recovery and consumers’ growing supply-chain worries.
More and more workers want better working conditions and higher pay. Where they can command those improvements, many will be more content in their employment and more likely to remain on-the-job. Even so, a recent Bankrate survey found that most individuals in the workforce, those working or looking for work, intended to search for a new job in the coming 12 months. In addition, the survey found that workers were prioritizing workplace flexibility, in terms of hours worked and/or the ability to work remote, over pay by a slight margin.
In terms of strikes, this is an indication how many workers are fed up and even willing to forgo some pay in their effort to secure higher pay and working conditions. Unions don’t play as strong a role in the workforce as they once did, but this could have some impacts on selected companies and sectors. More broadly, as workers seek higher pay generally, this will be something that employers have to factor into their plans and in some cases consider whether they pass along those higher costs to their customers. The current disruptions with supply chains are the primary factor leading into the higher and continuing inflation being seen in the U.S. and elsewhere.
It’s worrying as this is now a built-in cost. You really never see wages go backward, so once these wage increases are set, it’s not going back to whatever was considered normal.
With that, goods and services will continue to rise in price which when combined with massive global supply chain issues, means we are facing long-term inflation that will hit the middle class and below very hard. The government is out of tricks which is the biggest cause for concern. Rates are low and there is too much money in the system. There are only so many ways to get the money back out of the system, and raising rates is one of them. If they do that, however, it will likely kill the housing boom, along with all other credit-driven markets. Then you’ll have people trying to sell their homes that they just paid 10% over asking for in a market that lacks buyers, which could cause many people to lose a lot of money.
There isn’t a happy ending to this story unless someone finds a magic bag of pixie dust in their trunk and we all get lucky.