The current job market has nothing to do with workers rising against their employers. If your goal is to change your workplace or to get a better job, you are running out of time, and the situation for you is the best it will be for decades. My purpose in this effort post is to provide a different and hopefully a much more grounded explanation for the economy you are experiencing, so that you may better plan for the future on concrete terms.
Here are my main points:
- The current “worker shortage” is explained by the “Phillips curve”, an economic phenomenon that has been forgotten because of special circumstances these last few years.
- The “Great Resignation” is not happening in your field. Unless you work in the tech sector or healthcare, what is going on in your field is something else entirely, and almost assuredly it is not mass resignation from burnt-out workers.
- Inflation of goods like gas does not happen because of greed, any more than low gas prices the last few years were because of benevolence.
1.) Worker Shortage. Phillips Curve
The Phillips Curve has been recently under question for the unreasonably good economic times lived in recent times, but it is not the first time this phenomenon comes back from the dead. During the 70s the curve had broken as well in periods of high inflation and high unemployment. However it always eventually comes back. Because the special situations that broke it in the first place go away.
Picture from the fed link above.
Note that this picture only says “Wage inflation” however that is because it chose one topic to talk about, this curve actually applies to Inflation in general.
The Fed has already been considering raising interest rates to combat inflation. The article suggests a small increase, but considering levels of inflation, personally I anticipate they will likely keep on raising rather frequently. Over time, this means that the job shortage we are living through will return to a more natural rate of unemployment, and these favourable conditions will cease to exist.
(Note: that the need for transportation workers is its own, different reason, and if that is your field I recommend you personally make a deeper investigation)
2.) Great Resignation
This piece of conventional wisdom thankfully will be much easier to dispel. I will just give the main takeaways from this Harvard Study.
While resignations actually decreased slightly in industries such as manufacturing and finance, 3.6% more health care employees quit their jobs than in the previous year, and in tech, resignations increased by 4.5%. In general, we found that resignation rates were higher among employees who worked in fields that had experienced extreme increases in demand due to the pandemic, likely leading to increased workloads and burnout.
Employees between 30 and 45 years old have had the greatest increase in resignation rates, with an average increase of more than 20% between 2020 and 2021. While turnover is typically highest among younger employees, our study found that over the last year, resignations actually decreased for workers in the 20 to 25 age range (likely due to a combination of their greater financial uncertainty and reduced demand for entry-level workers). Interestingly, resignation rates also fell for those in the 60 to 70 age group, while employees in the 25 to 30 and 45+ age groups experienced slightly higher resignation rates than in 2020 (but not as significant an increase as that of the 30-45 group).
3.) Greed or Demand?
I will not explain the concept of Supply and Demand because I don't want to be condescending. I will assume most everyone already knows this term, the more there is of any one thing, the less it is worth, and vice versa.
Yes, it is true that Shell recently bought some Russian oil however the amount that Shell bought compared to the amount that we consume in the US is not whatsoever gonna alleviate the long term issues we have with gas. Shell bought 100,000 metric tons of crude, while the US in 2020 consumed 740 MILLION metric tons of oil. It is not exactly a drop in the bucket, but it is also not enough to lower gas prices. Prices of oil can very well KEEP CLIMBING
British Petroleums is expected to take a $25 Billion financial hit from leaving their assets from the war in Ukraine. Exxon is currently leaving behind $4 Billion in assets in Russia. Is this because of benevolence? or is it risk management?
We cannot possibly, as rational people blame these price increases in such facile handwaving as greed. Anymore than we can blame lower prices of gas in the past on benevolence.