Worker Shortage Might Be Excellent News For The Economy
A worker shortage might be excellent news for the economy! Maybe, just maybe, firms will awake and see workers’ substantial contribution to their success. Some CEOs take unconscionable sums and destroy their firm’s value, unlike many frontline workers who create value. During the pandemic, CEOs took vast sums as they laid-off workers. Some firms sought bankruptcy protection, but hat didn’t stop their greedy CEOs from snatching hefty bonuses.
We have a worker shortage and firms are scrambling to hire whomever is willing. Some firms, like McDonalds have paid signing bonuses. Canada’s Loblaw and its competitors paid a bonus to frontline workers when the pandemic began. They stopped it after three months in unison with their competitors. When government confronted them about this collusion, they claimed it happened independently. Go figure! It’s like you caught your three-year-old with her hand in the cookie jar and she said, Mom, “Cookie Monster did it!”
Worker Shortage Inevitable With Shoddy Treatment
Loblaw’s behavior disturbs me. During the bonus period, profits soared. Per se, that’s no problem. I favor firms making profits. To be sure, I am against government taxing profits. But paying workers the bonus during the pandemic shouldn’t hinge on profits. It was just right. Meanwhile, my wife and I shopped at a Loblaw store and workers continued their excellent service despite Loblaw’s slight.
Leaders must realize frontline workers are the firm’s foundation and treat them well, not as cogs turning out CEOs bonuses! When employers treat workers like machines, they disengage. Gallup said, over several decades, they and other researchers found a strong link between employees’ workplace engagement and the company’s overall performance. Yet employers refuse to accept this. But there is good news: surveys show some firms break the mold and treat workers with respect: Cisco, Apple, Accenture, IBM, FedEx are a few.
Next Quarter’s Earnings Drives Businesses
Companies see next quarter as the prize, so they exploit workers and fudge next quarter’s numbers. I repeat: I am against government taxing business. However, I favor the Biden Build Back Better provision to tax share buybacks that the House passed, and it is before the Senate, even if it might have only a modest effect on share buybacks. Companies shouldn’t be spending billions buying back shares while exploiting workers.
Firms should present to shareholder meetings options to use buyback funds. Choices might include effects of paying bonuses to frontline workers with buyback funds. Shareholders should hear about potential strategic investments, too. Another option is stopping buy-backs for five years after layoffs. Executives, too, shouldn’t get bonuses within five years of layoffs. We must get rid of worker exploitation that enhances CEO bonuses.
The Business Roundtable Stakeholder Capitalism Disappeared
The Business Round Table (BRT) had a revelation in 2019 and decided maximizing shareholder value is not a corporation’s sole purpose. That metrics from the 1980s is wrong, it said. I wrote then that the BRT “… came up with lovely platitudes about looking after stakeholders and quickly ditched it and returned to their greedy practices… ” They continued to move away from those bromides during the pandemic.
Let the worker shortage continue! It might be the force to rid firms of myopic, greedy incompetent CEOs. To be sure, the scarcity will cause disruptions in supply chains and elsewhere, but workers’ creativity, if allowed, will solve these challenges. Here is the million dollar question: Will enough firms decide to scrap the quarterly rat race and concentrate on building robust businesses for the long-term?
Worker Shortage
Prior to September 2021, many countries were experiencing worker shortages across various industries. Factors contributing to this shortage include demographic changes, economic shifts, and the impact of the COVID-19 pandemic. Here are some key points regarding the worker shortage:
- Demographic changes: Many developed countries have aging populations, which means a significant portion of their workforce is approaching retirement. This demographic shift creates a gap between the number of workers available and the labor demand.
- Skills gap: In some industries, there is a lack of skilled workers with the specific qualifications and expertise required for certain jobs. This mismatch between available skills and job requirements can lead to a shortage of qualified candidates.
- COVID-19 pandemic: The pandemic had a significant impact on the labor market. Many businesses faced closures, layoffs, or reduced working hours, leading to a loss of jobs. Some workers also left the workforce due to health concerns, childcare responsibilities, or career changes prompted by the pandemic. As economies recover, businesses are facing challenges in finding workers to meet increased demand.
- Industry-specific shortages: Certain sectors, such as healthcare, technology, and skilled trades, have been particularly affected by worker shortages. These industries often require specialized training, certifications, or advanced degrees, leading to a limited pool of qualified candidates.
- Geographic disparities: Worker shortages can vary across different regions and cities within a country. Urban areas may have a higher demand for labor, while rural areas struggle to attract workers due to limited job opportunities, lower wages, or inadequate infrastructure.
- Immigration policies: Changes in immigration policies or restrictions can impact the availability of foreign workers, especially in industries heavily reliant on immigrant labor.
It’s important to note that the situation regarding worker shortages can change over time, and specific information about the worker shortage in 2023 would require up-to-date sources. I recommend referring to reputable news websites, business publications, or government reports for the most current information on this topic.
Worker Shortage In Economy
Worker shortages in the economy refer to situations where there is a significant gap between the demand for labor and the available workforce. This shortage can have various causes and implications for different sectors and regions. Here are some key points regarding the worker shortage in the economy:
- Labor market dynamics: In a healthy economy, there is usually a balance between labor supply and demand. However, several factors can disrupt this equilibrium, leading to worker shortages. These factors include demographic shifts, changes in industry demand, technological advancements, and economic fluctuations.
- Demographic changes: Aging populations and declining birth rates in many countries have resulted in a shrinking labor force. As the baby boomer generation retires, there may not be enough young workers to fill the vacant positions, leading to worker shortages.
- Skills mismatch: Rapid technological advancements and shifts in industry demands can create a gap between the skills required for available jobs and the skills possessed by the workforce. This skills mismatch can lead to shortages of workers with the specific qualifications and expertise needed for certain roles.
- High-demand sectors: Some industries, such as healthcare, technology, engineering, and skilled trades, often face worker shortages due to high demand and specialized skill requirements. The growth of these sectors and the need for a highly skilled workforce can outpace the supply of qualified workers.
- Regional disparities: Worker shortages can vary across different regions within a country. Urban areas and regions with booming industries may experience more significant labor shortages compared to rural areas, where job opportunities and wages may be limited.
- Impacts on businesses: Worker shortages can pose significant challenges to businesses, including reduced productivity, increased labor costs, and the inability to meet customer demands. This can hinder economic growth and development.
- Government policies: Governments can play a role in addressing worker shortages through policies aimed at skills development, education and training programs, immigration policies, and incentives for businesses to attract and retain workers.
It’s important to keep in mind that the specific details and impacts of worker shortages in the economy can vary depending on the time and location. To get the most up-to-date and comprehensive information on this topic, I recommend referring to reputable news sources, economic reports, and research studies.
Prepare and write by:
Author: Mohammed A Bazzoun
If you have any more specific questions, feel free to ask in comments.
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