Hard Truths About This Economy

This phrase “great resignation” began in fall of 2020 just as the pandemic heated up. As businesses closed, many to never reopen, workers went home and many of them are still there. This has led to a workforce shortage in practically every area of our economy. The Bureau of Labor Statistics reports that 47 million Americans left their jobs in 2021.

I had an opportunity to speak this week to a group of young leaders in our community through the Rotary Youth Leadership program. Thank you to this fine organization for mentoring these young people. 

I was impressed with their questions and comments. When I asked about their future plans, every single person planned to attend college. Several expressed a desire to teach. One young lady planned to study political science and attend law school. Others were still deciding on their future.

When I asked if anyone planned to go into law enforcement, not a single hand went up. That is upsetting and somewhat surprising. I remember when most young men, at some time in their youth, desired to be a police officer or a trooper. Not anymore. Police departments around the country are suffering from a tremendous shortage of officers. Winston-Salem is approximately 100 officers short. One of the saddest things is that many of those who do want to serve, are unable to pass the necessary competency test. That doesn’t speak well for our education system. (we will discuss that in a later column.)

As our police presence shrinks, crime rises. It does not take a rocket scientist to figure out why. Many officers have retired as respect for law enforcement has diminished and violence on officers has put their safety at greater risk.

Whatever each of the young Rotarian leaders decides, there is likely a job waiting for them. There is a severe workforce shortage in practically every field. Companies are desperate for help and are trying everything they can to recruit and retain a workforce.

A recent report by the U.S. Chamber of Commerce spells out some disturbing statistics. There are more than 11 million jobs available and only six million workers who are unemployed. A total of 3.25 million workers have left the workforce during the pandemic. 

The Chamber has some theories about why. Americans have added $4 trillion to savings since 2020. Enhanced unemployment was part of the reason why. There were 68% of claimants who earned more on unemployment than when working. Who wouldn’t take that deal? But paying people not to work is harmful to the economy as a whole. 

The workforce rate for women has dropped significantly. The participation rate for working mothers dropped from 70% to 55%. Many mothers began to stay home when childcare centers and schools closed down and there was no available childcare. Many women have not rejoined the workforce, and some never will. 

Male workforce participation rate is not good. Over the past 50 years, the worker participation rate for working aged men has dropped by 10%. In January 1970, the rate was 80%. In January of 2020, it stood at 69%. It has dropped dramatically since the pandemic also. What happened to these workers? 

Nicholas Eberstadt of American Enterprise Institute says, “By and large, non-working men don’t do civil society.” He says this practice is “fundamentally degrading,” and it is made possible by a number of “disability programs” that make it possible to stay home and not work. He further points out that these men spend their days watching the big screen and playing video games. Rarely are these men participating in society, volunteering, attending worship, involved in family activities or public forums. 

Dr. Eberstadt cites a few reasons for this trend. Other than the “disability” reason, he says the opioid crisis and video game culture has “disabled” American working men. He also pointed out that the cultural shift of steering men away from the traditional role as providers has worsened the situation. He states that traditional male employment jobs like construction and law enforcement have become stigmatized. 

It does not appear that the situation is going to improve soon. Fortune Magazine recently reported that a survey revealed that 41% of full-time employees and self-employed workers, “are considering leaving their jobs this year.” 

We are currently in a recession, no matter how much the Biden administration tries to spin the truth. A lot of families have been in a recession for a lot longer than the official numbers let on. We can never fully recover from an economic downturn without a sufficient workforce. If the economy booms and nobody shows up to participate, recovery will not be possible.