Where Have All the Workers Gone?

Gone underground every one

The past 18 months of COVID pandemic triggered structural changes to our workforce.  The mystery may have overtaken housing for what is top-of-mind among those in our region and across the country, which is saying something.  It seems everyone has an anecdote or a theory. 

Here is my take on the workforce shortage:  COVID shook things up and people adapted.  One adaptation is that some are learning they don’t need to work as much.  Others have come to understand they don’t like where or how they were working before.  A large chunk of the workforce has gone underground.  We may look back on this as a time of great personal innovation and creativity.

The trend is getting plenty of media attention and analysis.  Economists refer to this as the “participation rate” which has “fallen broadly across demographic groups and career fields” according to The Wall Street Journal.  The WSJ reports 4.3 Million Workers Are Missing.  Where did they Go?  It is a worthwhile read, echoing a trend reported by just about every major news organization in recent months  from The Colorado Sun to  The Colorado Springs Business Journal to Fox News 31 Denver which notes that the workers shortage could make Colorado roads less safe this winter.  The WSJ article’s subtitle is “Many economists expect the shortage to last years, and some think it could be permanent.”  This is why I am calling it structural.

The WSJ article was published Oct 14^th noting that “evidence suggests labor shortages might be deepening. Labor supply declined in September and workers quit at record rates in August.”  So where did they go?  The article notes among other factors that retirements have accelerated.  Which got me thinking that the very idea of “retirement” may morphing.

The WSJ was referring to Baby Boomers, but I surmise another explanation which may be best explained in the form of a standing joke about my hometown best illustrated by the show Portlandia.  “Portland, its’ where young people go to retire.”   Watch The Dream of the 90s is alive in Portland on YouTube for a bit of fun.  The trend was enough of a “thing” in 2012 that Bloomberg reported “Is Portland Where Young People Go to Retire?” noting that “the number of 25-39 college educated people running their own business is about 50% higher (there) than the average for large metros,” adding that “this high degree of entrepreneurship is a positive for the regional economy.  It also shows a strong DIY culture:  if the economy doesn’t provide you a job, make your own.”   So people may be extending their side hustles into primary income.  A lot of the Northwest is poor, and creative.  As a child I went to Saturday Market under the Burnside Bridge and was amazed at how many people seemed to be living off selling their pottery, macrame or photos.  Can an economy exist just off people selling coffee and used clothing to each other?

That kind of DIY resourcefulness, when it isn’t the joke I make it out to be was what John Hickenlooper as Governor meant when he said that Coloradoans are creative problem-solvers.  That may describe a lot of what is going on right now in the labor market in the high country which also has historically relied upon a labor force of talent that is (famously) underemployed, and until recently willingly, happily so because living in Vail or Breck or Aspen or Steamboat for a season had a kind of a cool factor you could take back to law school with you.   There are still ski bums, those who drop in for a season who are underemployed for the flexibility to live 4 to an apartment just to play for a while, but that too seems to be a romantic notion.  These are not the people washing dishes, building houses and making beds in today’s resort marketplace.

There are still a lot of people involved in some combination of sabbatical/entrepreneurial lifestyle choice kind of thing.  To steal a phrase from Vail, they don’t exactly appear to be roughing it.   Today’s “hippy” may have unconventional business plans under her baseball cap instead of taking a break from gaining a post-secondary degree to eventually go to work for corporate America.  This kind of revolt of privilege is not exactly new.

The calculous of those who didn’t mind “working on the mountain” or driving a bus for a ski pass in those traditional jobs does seem to have changed.  It could be seen as a good thing unless you are an employer dependent upon workers, that is, workers who think they need the job you are offering at the pay you are offering it.  Summit Stage at the start of November was 20 drivers short of the 65 they need for the winter and were offering bus drivers a $1,000 signing bonus.  Chris Lubbers who runs Summit Stage noted, “we are unfortunately experiencing the same workforce shortages…that we know many businesses in our community are grappling with.”  There are a lot of not-exactly career, not exactly attractive jobs yet to be filled.  So how are these people paying the bills?

The NYT also reported on the early “retirement” trend in Will Portland Always Be a Retirement Community of the Young in 2014, noting that Portland “has become a city of the overeducated and underemployed – a place where young people are, in many cases, forced into their semiretirement.”   I don’t know about being “forced” into early retirement.   “In the wake of the financial crisis, many young college graduates have delayed their lives.”  I don’t think moving back in with your parents qualifies as early retirement.   And then there is this.  The state demographer, Elizabeth Garner often notes when she visits the high country on the high percentage of residents with unearned income.  Some of this is from rental income.  She also notes, wryly, that a good bit of that slice of individuals with unearned income can be attributed to “Trustafarians,” those neighbors of yours who don’t seem to work but seem to have the money to purchase $100,000 camper vans when they feel the urge.  Driving a campervan around or driving a bus – that question may be a ‘duh’ for some who evidently have a choice. 

Lest you think this column about the workforce is entirely frivolous musings, here are some significant trends and factors noted in some of the articles cited above that are long-observed and predicted.  These trends are coming home to roost right now in the labor shortage, trends such as:

1. Baby Boomers are, in fact, ageing out of the workforce
2. Globalization is undercutting the competitiveness of many American industries
3. Foreign worker VISA programs are poorly managed in an economy that is highly dependent upon foreign workers
4. America’s love-hate relationship with immigrants and immigration prevents adoption of a coherent path to citizenship
5. Many American workers’ refuse to relocate to chase jobs
6. Many jobs don’t pay a living wage
7. The cost of childcare absorbs so much of a young workers wage that it often doesn’t make sense to work if you have kids
8. The social contract between employers and employees has all but disappeared, and currently, that is a win for employees

With some other factors that probably couldn’t have been predicted before our shared COVID experience include:

1. that many “front line workers” would quit, refusing to expose themselves for low pay
2. that some businesses quickly adapted to business models that reduced the need for labor and never looked back 
3. that people learned creative personal financing during the pandemic such as refinancing, “side hustles” and adapting to live on less income
4. that so many Americans would re-assess their work-life balance and choose to work less, work unconventionally, or not at all

For those who think everyone else is living off of the government dole.  Yes, there was more of that during the Pandemic, but trend of the disappearing workforce is happening AFTER that has expired.

The truth is that America doesn’t have much of a social safety net, and we have been unravelling what protections we do have for those who cannot work for years. 

The mysterious disconnect about the workforce shortage is that most of us simply must work.  We just don’t need to work exactly the way that the market has relied upon us working, and that is shaking things up.