There are several factors contributing to the U.S. labor shortage. It has to be considered that generous unemployment compensation, both state and federal, has had a significant affect upon labor availability. It is understandable to invoke a government funded financial support program during a pandemic. But there is debate over the federal extended unemployment benefits.
22 states have opted out of the Federal unemployment compensation in hopes of enticing people back to work. Companies have sweetened the compensation as well to attract employees. That tactic can get expensive since existing employees will likely take exception to new workers starting at a higher salary than they did or may be at currently. Naturally, that burden would have to be met by extending the compensation to the entire team to ensure employee retention. Of course these additional expenses must be reflected in the cost of the product or service. I’m sure most people have noticed the cost of everything is on the rise.
There may be more than money in the mix here. For over a year we’ve been legislated to stay home. Aside from essential workers most of the country had a 14 month paid vacation. That wasn’t too difficult to get used to and, in fact, become comfortable with. That psychological dependence upon government financial support may be more difficult to break than people realize. Add to the issue that most people may have become complacent, and accustomed to their new pandemic normal. Most are not in any kind of “game shape” to return to normalcy so quickly. It’s like asking a fighter who hasn’t trained in over a year to go 12 rounds with a champ.
Research from Bank of America recently found that the pandemic-era benefits indeed do keep people from looking for work but only if people made less than $32,000 per year before, which is less than half the national median income. For these low-income workers, it makes sense not to work but to collect benefits, while for higher-income earners it doesn't. Sure, when the benefits dry up the labor shortage will likely subside. Hopefully between now and September (when the unemployment payments end) people will work on their psychological and physical training to be prepared to re-enter the workforce in game ready condition. But, until then, expect the labor struggles to continue.
Commercial Truck Drivers Are In Great Demand
Truck drivers are about as rare as hens teeth today. It not only affecting the trucking industry. It’s everywhere. I haven’t seen the recycle truck in a month. The airlines are cancelling flights left and right. Package and mail service is a slow as its ever been. The affect of most of these delays range from a mere inconvenience to socially disruptive. It’s the trucking industry that drives this country however. Prolonged driver shortages in the trucking will most certainly have a negative affect on our Covid rebound.
Truck drivers and logistics support staff are indispensable to our lifestyle. They keep food, clothes, medicine, books, gadgets, and almost anything else you can name, on our shelves. Between 2019 and 2020 alone, there were over 14 million job postings for truck drivers. In other words, they are in extremely high demand, and failure to meet this demand over the long term will have widespread consequences on our economy and daily life. Given how seamlessly American logistics function from a consumer standpoint, it can be difficult to fully grasp the size, scale, complexity, and importance of our logistics network and workforce. We press a button and wait for a package, or swing by the grocery store or pharmacy in total confidence that we’ll find what we need on the shelves. The unthinkable could happen. Don’t head out to the food store for any panic buying yet. But, if you run into a truck driver at the convenience store maybe pay for his or her coffee.
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Stay Safe Everyone.
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Author
Michael Gaughan
Technology Officer
Land Link Traffic Systems
Land-Link, a well respected professional organization, has been providing its clients with effective transportation and logistics solutions since 1978.
