How America Labor is Quitting for a Better Life
It’s Monday morning, and the alarm goes off. That screeching sound forces you to peek out from under your covers, even if it’s only so that you can take careful aim at the snooze button. You smack it hard. You do not care if you permanently kill it as long as there is silence in your bedroom. You smile with satisfaction when that offensive sound is gone. You bury your head back under your pillow. For five more minutes, you can pretend you can stay in bed. For five more minutes, you can pretend your mother has given you permission to stay home.
At any one point in our young lives, we have probably all begged our mothers for the privilege of staying home. We had begged to remain in the close, safe, warm confines of our homes. We begged to stay home with the one person we knew would protect us from all the bad we envisioned in the world. Of course, we also begged to stay home to get a few more hours of sleep. So we would not have to go to school. So we could enjoy slowing down and enjoying life. It’s no wonder that as we begin to try to exit from the pandemic and get back to the old normal, we are having a devil of a time trying to get ourselves out of the house. We are begging to stay at home. We are begging to slow down and enjoy life. Or at least that is how it seems. We are finally ready to give ourselves, as a country, permission to hit a more prolonged snooze button. As such, America seems to not want to go back to work. Yet it is far from that simple.
Today I read Henry Olsen’s “Opinion: Are Americans starting to embrace one-earner households again?” at the Washington Post. In it, Olsen offers a good analysis of the economic effect of American families adopting a one-earner household. He also postulates the impact of the growing number of persons who are retiring, most of them earlier than planned. Olsen opines that the pandemic may have forced the people to look at their quality of life and the increased earning potentials that the pandemic has made possible. He thinks that the changes have made it possible for families to consider living on one income.
Personally, I have wondered about this for some time. I have even proposed it as an argument with friends when they blame laziness or too much stimulus on the lack of workers returning to the workforce. Olsen’s argument makes much more sense. And to his analysis, I would like to add another piece to the labor shortage puzzle. Besides families embracing single earner living, this new dynamic understates the other part of that labor analysis. In addition to families being able to consider an existence with just one earner, the single earners who are already heads of families have had a major change in their lives. Even with rising inflation, they no longer have to work two and three jobs to make those ends meet. They can settle on one job. They can settle into a life that doesn’t involve 60-80 hour work weeks. Even with inflation at 6-7%, they have gone from $7-8 an hour to $10-15 or higher. So, the new pandemic economy has made inflation tolerable, even acceptable compared to the pre-pandemic lower wages.
For these people, the new emerging pandemic economy is a bit brighter. It is not the normal small wage change that is the annual norm. This monumental change in wages represents a new freedom – the freedom of time. The freedom to have a life that isn’t just work – the freedom to walk away from at least one job.
We all know these people, some of them just in own daily interactions. For some of us, at one point we were one of these people. I had times in my life when one job was not enough. I had times when a second job wasn’t an optional source of extra income. It was the source of making the bare bones of existence possible for my family. So, from the cheap seats of my own life, it is easy to see the labor market changes from the eyes of those who make up the US economy of relatively cheap labor work. The changes are real and profound. The changes are also not complete yet. There will probably be more labor pain in the US as we try to give birth to a new and different economy. What that economy will look like in the end is still just a guess.
The reality is that more major changes are coming. Over the last few decades, the US economy has artificially reflected that at times there might not be enough jobs. But the real problem was that the US had too many workers. That is to say, that data reflected a significant number of workers occupying more than one job. Additionally, that data reflected a large number of retirees who either wanted or needed the extra income. That padded data is now being exposed. As that padding ceases, the true comparison of workers versus jobs is also being exposed.
For many workers this change has been long overdue. They have begged for this moment. They have also given up on the notion that livable incomes would even be part of their lives. Yet now here we are. How long it will last, no one knows. But for now, American workers are making decisions based on a new economic landscape. They are choosing freedom from their lifetime of grinding it out.
That leads us to the odd reality that Olsen is also right about. The new US economy will still require a lot of workers who will still work for relatively lower income even as that level increases. The new US economy will basically need more people.
In other words, the new US economy will probably require the open labor market of the “illegal” immigrants that are currently already here and already working. The new US economy will require that this “invisible” workforce will probably have to come out into the open and probably expand. After all, companies will probably never be able to offer up the pay increases necessary to bring back all the workers they need to survive. A new pool of workers will be desperately needed.
In the end, this new economic world could not only lead to more freedom for current American workers, but it may also force the United States to embrace an even greater change – a political change. In this new economic reality, a pro-immigration stance may emerge. It may be the only way the American economic engine gets enough workers. It may be the only way many businesses can find a way to survive. This need for a massive political change will probably be the most interesting effect of the new American economy. It will be interesting to watch how that political change will evolve. It will be interesting to see if the pro-business Republican party will in the end have to lead this new charge to a major immigration policy change. After all, America needs more works especially since Americans are hitting the snooze button more than ever. Speaking of which, I think I’ll go take a nap.