"The safety net for people increased so much during Covid, that small businesses cannot get people to work."
100%, right on. I have a small business in Chicago, and it's been a nightmare. When we all came back from Covid lockdowns in January 2021, I noticed that things were very different, almost eerily so. I put out some help wanted ads and got a multitude of responses. I thought, "oh, ok, they're still out there, and they want jobs, so that's good."
Then something strange happened. We would reply that we were ready for a phone interview--the same day--and we would get almost zero response. I found that for every 10 ad responses, only 2 would reply to our subsequent response. One of those would agree to come on site and interview, and then that person likely wouldn't show up. Just ghosted us. It would take about 30 applications to get one person actually hired.
After a month of this I started to get self conscious, thinking that maybe my business was doing something wrong. We are very professional, offering decent wages and benefits, and our work conditions were well above industry standards. I was very frustrated.
Then I started talking to other business owners and we all realized that this was happening everywhere. We realized that people were simply responding to the latest ad, saving a copy of their response, and then using it to "prove" that they were looking for work. In an era of easy one clicks of the mouse--and not "pounding the pavement" this would collectively take about 3 minutes a day.
Unemployment checks! Most were making upwards of $50K a year with both state and federal unemployment add-ons, and that was for doing no work. If I'm paying $60K a year for a basic job (cashier), would you work 40 to 50 hours a week, commute in the "Covid" environment of fear, and lose all of that personal leisure time for $10K? And then throw in taxes on work, but not on unemployment? You would actually be worse off, after commuting costs, taxes and the like.
The federal subsidy has since ended, but things are still the same to this day. I think it's because many people who were formally not in tune with how easy it is to get benefits just simply decided that it was a better way of life. We get numerous responses and then ghosted again. Now, we are seeing actual work-seeking employees being snatched up within minutes or responding, not hours or days. Minutes. I have increased wages about 40% to 70% since January, 2020. And I still cannot get people. Worse yet, I have at least one employee poached a month. They will say, "I'm so sorry, I love it here, but I can't turn down this offer." I had one person in an entry-level position leave for the equivalent of $115,000 a year selling weddings and private events.
It has gotten to the point that I have begun hiring "management" people at management prices to do frontline work. That segment seems to be more available than workers for basic jobs, and they stay longer. But I have to then pass along costs for wages that two years ago were unheard of. I don't see this ending any time soon.
Nothing will change until these incentives to not work go away, or the economy severely crashes -- at which I'll have a whole other set of problems. In a Democratic state I don't feel good about policy changes in this regard.
It is not fun to be a business owner in this economy. I hate it, and I don't like my job anymore.
If you want to do an interesting thought exercise, go look up the leading economic indicators in 2016 when the Federal Reserve began raising rates right after Trump was elected and compare those to that of mid year 2021 when the federal reserve SHOULD have begun raising rates again and tell me that the federal reserve is not politicized. The unemployment rate was equal or lower in 2021 and inflation was higher. It is clear Powell was suppressing rates to get renominated.
"The safety net for people increased so much during Covid, that small businesses cannot get people to work."
100%, right on. I have a small business in Chicago, and it's been a nightmare. When we all came back from Covid lockdowns in January 2021, I noticed that things were very different, almost eerily so. I put out some help wanted ads and got a multitude of responses. I thought, "oh, ok, they're still out there, and they want jobs, so that's good."
Then something strange happened. We would reply that we were ready for a phone interview--the same day--and we would get almost zero response. I found that for every 10 ad responses, only 2 would reply to our subsequent response. One of those would agree to come on site and interview, and then that person likely wouldn't show up. Just ghosted us. It would take about 30 applications to get one person actually hired.
After a month of this I started to get self conscious, thinking that maybe my business was doing something wrong. We are very professional, offering decent wages and benefits, and our work conditions were well above industry standards. I was very frustrated.
Then I started talking to other business owners and we all realized that this was happening everywhere. We realized that people were simply responding to the latest ad, saving a copy of their response, and then using it to "prove" that they were looking for work. In an era of easy one clicks of the mouse--and not "pounding the pavement" this would collectively take about 3 minutes a day.
Unemployment checks! Most were making upwards of $50K a year with both state and federal unemployment add-ons, and that was for doing no work. If I'm paying $60K a year for a basic job (cashier), would you work 40 to 50 hours a week, commute in the "Covid" environment of fear, and lose all of that personal leisure time for $10K? And then throw in taxes on work, but not on unemployment? You would actually be worse off, after commuting costs, taxes and the like.
The federal subsidy has since ended, but things are still the same to this day. I think it's because many people who were formally not in tune with how easy it is to get benefits just simply decided that it was a better way of life. We get numerous responses and then ghosted again. Now, we are seeing actual work-seeking employees being snatched up within minutes or responding, not hours or days. Minutes. I have increased wages about 40% to 70% since January, 2020. And I still cannot get people. Worse yet, I have at least one employee poached a month. They will say, "I'm so sorry, I love it here, but I can't turn down this offer." I had one person in an entry-level position leave for the equivalent of $115,000 a year selling weddings and private events.
It has gotten to the point that I have begun hiring "management" people at management prices to do frontline work. That segment seems to be more available than workers for basic jobs, and they stay longer. But I have to then pass along costs for wages that two years ago were unheard of. I don't see this ending any time soon.
Nothing will change until these incentives to not work go away, or the economy severely crashes -- at which I'll have a whole other set of problems. In a Democratic state I don't feel good about policy changes in this regard.
It is not fun to be a business owner in this economy. I hate it, and I don't like my job anymore.
If you want to do an interesting thought exercise, go look up the leading economic indicators in 2016 when the Federal Reserve began raising rates right after Trump was elected and compare those to that of mid year 2021 when the federal reserve SHOULD have begun raising rates again and tell me that the federal reserve is not politicized. The unemployment rate was equal or lower in 2021 and inflation was higher. It is clear Powell was suppressing rates to get renominated.
My favorite line about the economic behaviorists: A nudge is just a small shove.
I’m wondering if you’re also paying attention to what’s going on in the repo market.