Predicting the COVID Labor Shortage Impact, Part 2

Here’s Part 2 of my March 2020 prediction updates on the COVID induced labor shortage; check out Part 1 if you’re interested in seeing how the first three turned out. Now let’s check out Predictions 4-7 and see how well I did a year and a half later.

If you take the phrase “history repeats itself” to heart, you’d be amazed at what patterns you notice taking place in the world. In this case I correctly anticipated its affecting the labor market less than two weeks after the first wave of lockdowns. Fast forward sixteen months and we’re now seeing the long-term effects. Now we’ve got companies offering more fringe benefits and higher wages. While some of them are pushing back hard on the mere suggestion the times are a-changing, the rest have wised up and keep good workers with cold, hard cash.

In fact, this labor shortage is affecting all levels of workers. I’m even experiencing that myself with a lot of new recruiter acquaintances hitting me up:

This labor shortage is real at the high levels too… I've had three recruiters reach out in the last week alone, despite me not even casually looking/not a career prodigy.

Which is to say: if you want to get a raise at work or get a huge raise elsewhere, now's the time. ⏰ pic.twitter.com/VMl5wu05xu

— We Want Guac (@WeWantGuac) July 30, 2021

Does this historical analysis coming true make me a bona-fide financial clairvoyant? I’d say no, because this is, at its core, just human nature doing its thing after forgetting the lessons of old. There’s plenty enough I got wrong, too, about how the COVID labor shortage would play out, amongst all the stuff I did end up getting right. Let’s hop to it!

Fourth Prediction: Correct

This prediction has overlap with some of the previous three, that being “Working conditions will improve, with more remote work opportunity and other flexible options”. Admittedly this was an easy one to nail once lockdowns slammed over the country; all the bigwig suits had to scramble to set up WFH stations and continue churnin’ out them profits one way or another. And by doing so, workers and executives from all over the world finally reached a technological milestone some 50-odd years in the making. That milestone: telecommuting and flex work being the norm instead of physical offices. The main reason this wasn’t a reality much sooner was thanks to managerial resistance. Can’t show off your shiny corner office and look over your employees’ shoulders and get your germs all over them when everyone’s at home!

But then COVID showed up and made it an absolute necessity. There wasn’t much choice on their end to force workers to continue coming in during lockdowns and quarantines, so WFH it was. After a successful year-plus of remote work, workers are going to have hard evidence against any more weak excuses necessitating full-time office work again. Here’s the crucial rub: executives will still want folks to come in and know they need to make doing so an attractive option. If they don’t make it attractive, that’s bye-bye to their best employees.

The solution?

Better working conditions, full stop.

Oh, they are definitely improving (however reluctantly). Let’s go back to my own situation at work, where they announced the company’s return-to-office plans in full. After Labor Day my fellow coworkers and I will have to come back to the office 2-3 days a week. With a 5 day work week, that means I’ll be working from home 2-3 days each week (which, lbr, I’ll make sure is 3 days a week for me).

For each of those WFH days, that means two extra hours of me-time I don’t have to give to my commute (I leave my house at 8am, get home around 6pm with the traffic). The time savings alone from also not needing to “get ready” in fancy business attire is A++. I can use my break time to relax in my own private, comfortable space instead of sterile offices or loud city streets. No more cubicle constraints? More work/life balance? No more close proximity with sick people spreading their germs everywhere? This is a no-brainer.

I’m taking full advantage of these new benefits, babe. And so are many others! The companies that are forcing a full Monday-Friday return to the office are positioning themselves to lose out on productivity; one reporter nails it by saying businesses will “find themselves at a significant disadvantage when it comes to recruiting new talent”. The future is now, old man! The COVID labor shortage said so!

Fifth Prediction: Correct

Is your company run by necrotic Crypt Keepers who are decidedly NOT offering improved working conditions/altered business plans? They will either fail in the next few years or have already closed, as predicted in #5: “Businesses will either permanently readjust, or fail”.

Roughly a hundred thousand businesses in the United States failed between March 1^st and August 31^st of 2020, according to Yelp (see slide 10). Yelp, by the by, fully agrees with me that these enterprises must pivot or perish. There is simply no going back to where we were.

Which I told you last March. There will be some things that will never change, such as the pleasure of going out for dinner or the delight of vacationing in exotic, glamorous places. It’s safe to say most folks that enjoyed them pre-pandemic have aggressively missed the indulgence. They’re so pent up they’re going to pounce on all of it once they get permission to do so. But a smaller labor pool means a smaller clientele. As long as their business strategies remain unchanged, that translates to a smaller profit no matter how you slice it. Not even the passion of the upper-class consumer will alter that.

Sixth Prediction: Correct

Out of all my predictions, this is the one I didn’t want to see come true. Back then I tried softening the blow by adding a “but” in there: “Inflation will happen abruptly, but briefly” were my exact words. Back then the inflation was concentrated on stuff like sanitizer and toilet paper (the latter for stupid reasons). Now it’s on, well, everything. Grocery prices are up as is gas and other necessities. The car market got hit with the worst of it, with even used cars commanding sky-high price tags. The last time inflation actually rose this much was in 1991, which was three years before I was born. In other words, no one who is 30 or younger has ever experienced inflation at this pace.

In light of this we’re going to need wages going up anyway to afford the higher-than-expected costs. I tried not to attach a specific time estimate when I originally said “briefly,” as there’s really no way of telling how long this inflation will last. I only hope it’s brief, because I’m feeling the squeeze and I can actually afford it no problem. Many out there can’t, especially those who are no longer in the labor pools that make predictions 1-5 (and the COVID labor shortage) a reality. This is only going to increase the financial anxiety millions already face and adding to the stressors already in place from a global health crisis. I haven’t seen much action yet on a government level to combat this just yet; that’s likely coming in the days to come. Inflation is yet another reason for making sure you get a high-pay job and save as much as you can. You never know when your grocery bill will start reaching for the stars… and not in a good way.

Seventh Prediction: So, So Wrong

The only prediction I was fully wrong about was #7, being “Rent prices might go down” (sigh). I was the first to admit this was wishful thinking on my part; my rent’s below market for my area but is still stupid high in general. With that said I was very much On The Money about folks moving elsewhere to work remote somewhere more affordable. Thanks to several factors, including deliberately depressed mortgage rates and companies scooping up real estate like there’s no tomorrow, prices have continued to go up, up, up. The only winners here are people who were already homeowners, since they could refinance and get a much lower monthly payment. That’d be like my landlord popping up to tell me my rent was suddenly $500 less.

My one hope now is I’m speaking too soon and rent prices do, indeed, crash within the next year. Which will be bad for landlords but great for people like me.

The Other Stuff I Got Wrong about the COVID Labor Shortage

Six out of seven equates to me being 85% correct. If this was a class on fortune telling and mysticism I bet that’d be the highest grade in the class. Woohoo, my need for academic recognition still holds up!

Since this isn’t a class where my performance dictates my future, I don’t mind pointing out where I made mistakes. The end results turned out correct, just not some of the details

For one, I originally focused on white collar workers when the most press is coming from blue collar. That’s on me because the focus of my blog isn’t blue collar work, so I didn’t write about it. What I failed to point out was how impactful blue collar work is on all of our lives – or, at least, the lives of those out there who rely on getting takeout every night instead of cooking for themselves. It most impacts the Karens of the world who suddenly have to deal with inconveniences no amount of tantrums and disrespect can overcome. This COVID labor shortage stuff is just so out of the blue for them, you know. And I am so utterly gleeful about their finally getting their just desserts. It comes more bitter than sweet when you realize said Karens are harassing the poor workers still around, however.

Wait, You’re Not Getting the Vaccine?!

Speaking of entitled idiots, I also could not have predicted how resistant folks would be to getting the vaccine. There are multiple vaccines available to get. It’s now available to all Americans and stupid easy to get. And free. With 99.92% of people experiencing zero complications. Yet these jackasses somehow believe the vaccine is somehow worse than the hell of suffering from COVID. Which, to this day, baffles me. Coronavirus causes weakness, suffocation, confusion, fear, and long-term cognitive decline, which are all well-documented realities. This includes those in the finance community who caught it. And children can’t even get vaccinated, leaving them vulnerable to a lifetime of health complications if they catch it. Knowing all of this, who the fuck would make it drag on once we got a vaccine together?

Well, Republicans who have gone the way of fascism. Which is the majority. There are some leaders who have now reversed their stance and urge their constituents to get vaccinated; this is too little, too late for the thousands that have died since these vaccines have been available. This is a virus that has literally killed MILLIONS of people. And counting. With all developed countries forced to declare plans and mandates and emergencies related to it. And you think all the scientists will band together, without one dissident, to fuck around with the cure? You’ve gotta be a crying toddler who fell out of a cradle, because you’re clearly off your rocker.

On that note I’m going to put my fortune-telling skills to rest for the time being. If anyone wants me to read their palm or something I will only do so at a price so exorbitant only millionaires can afford me.

Or maybe not, on second thought.

Something tells me that might not end well.

Cover image credit: Josh Riemer via Unsplash