A "perfect storm" is sweeping across the U.S. labor market

This article is from the English financial affairs news

America's labor shortage seems to be intensifying. Supposedly, the U.S. government stopped paying additional unemployment benefits in September, and there are no new cash checks, at which point people should be working outside the home, but there has been a labor shortage in all walks of life in the United States recently.

The latest evidence is that American Announced over the weekend that it would cancel as many as 1,900 flights due to weather and labor shortages. While there are weather reasons, it also shows the reality that labor shortages are still grim.

The data shows that the US non-farm payrolls data has been falling short of expectations for two consecutive months, and the market will also usher in the October non-farm payrolls report on Thursday, and analysts currently expect the US to add 385,000 new people that month.

Economists believe that the wave of resignation is not a short-term sudden appearance, but a cumulative process. According to the survey, the number of employees affected by the COVID-19 pandemic has increased tenfold to 50 million people during the 2008 financial crisis.

A "perfect storm" is sweeping across the U.S. labor market

Market analysis believes that the key factors leading to the current imbalance in the US labor market cannot be singled out, and the new crown epidemic, early retirement of the elderly, taking care of their families, increased cash savings, dissatisfaction with wages, and the need for the labor market to recover are all important contributing factors.

Reason one: the fear of the epidemic

After nearly two years of pandemics, while vaccines are rolled out globally, fear of the virus is still preventing them from returning to work.

Brad Mcmillan, CEO of commonwealth Financial Network, a well-known independent U.S. brokerage, said:

"People's return to the labour market (since the pandemic) has stopped. The biggest problem now is not the slowdown in growth, but the fear of returning to work. ”

Data previously released by the U.S. Department of Labor's Bureau of Labor Statistics (BLS) showed that the number of departures in industries such as retail, warehousing, restaurants and bars, health care and social assistance jobs climbed to a new high. And these industries are industries with a high risk of exposure in the epidemic.

Reason two: Labor has not disappeared

The U.S. government's stimulus package during the pandemic has allowed many families to receive multiple checks over the past 18 months, and home values and stock prices have continued to rise during the same period. As a result, many households have more financial buffers than in the past.

Against this backdrop, many Americans have chosen to put on the agenda the job change plan that has slowed down due to the epidemic. Surveys show that many Americans don't want to give up their jobs, but want to change jobs and choose to try different industries.

First, the pandemic has largely changed the environment and state in which people work. Many companies and industries have also chosen to permanently allow employees in some positions to work from home. These workers can also take care of their families during the epidemic, so when some jobs require people to return to work, employees who have adapted to this rhythm will consider changing jobs.

Secondly, remote work has allowed many people to re-examine the value of their work, and many people have received online course education during the epidemic, which has also opened up more possibilities for their career prospects, and the awareness of cross-industry work is rising as never before.

Moreover, the epidemic has spawned many emerging industries and affected people's choices and perceptions of work. For example, takeaway food delivery services, which were previously difficult to implement widely in the United States, have risen on a large scale during the epidemic, so some people who originally did not have high work incomes may start to try food delivery services.

Finally, under the economic stimulus of the US government, the Federal Reserve maintains low interest rates, inflation has remained high, the restart of domestic production lines in the United States has been slow, coupled with the restructuring of global supply chains, there is higher demand for some products, such as used cars, real estate, furniture and food, etc., resulting in the current soaring prices.

The data showed that the average wage of U.S. workers increased by 4% year-on-year in September, but inflation reached 5.4% over the same period.

Against this backdrop, if the average employee thinks their income is not immune to inflation, they may choose to look for a higher-paying job.

Reason three: changes in labor relations

The pandemic has unencumbered labor inequality in the U.S. system, arguing with Harley Shaiken, a professor at the University of California, Berkeley:

"We have entered a new era of industrial relations, and now it is the era when labor is at the helm and proposes to management that it needs to be remedied."

U.S. companies are struggling to cope with surging market demand and a supply chain crisis. Labor value is highlighted. In the case of low wages, workers are reluctant to return to jobs that endanger physical health and safety, so they take strikes and other ways to fight for their rights and a better life.

According to Cornell University's labor action tracker, there have been at least 176 strikes in the United States this year so far, including 17 in October.