Dec. 28, 2021

Where Are All The Workers?

It's impossible to talk about the year 2021, without including the overwhelming effect that the Pandemic and the Vaccine have had on our country and our economy.

Those effects are now starting to really show up in the economic data that comes over my desk each day. What strikes me currently is the impact that these health issues are having on the Labor Markets in particular.

And even though it's early in the process, and certainly all of the data is not yet conclusive, there are certain trends that are building, which may give us insight into where we are headed.

So although this might be premature by any academic standard. It's what we do in investments. We try to gain early insight into where things are headed.

Our objective isn't to be academically perfect. Our objective is to get the jump on the competition. And perhaps,  present an insight that others haven't yet come to.

And any discussion of health is bound to have a great deal of influence over the labor markets.

Now to set the stage, as I see it there are two camps in the country: the pro-vaxers and the anti-vaxers. From what I'm told the pro-vaxers are about 2/3rds of the population, and the anti-vaxers are about a third. I really have no idea if that's correct, but that seems to be the accepted estimate.

Now both groups have a dis-incentive to go into work currently. As for the pro-vaxers, there is the ever-present threat of catching the disease.

And it may surprise you to learn, the anti-vaxers are almost equally disinclined to go to work for fear of those who have been vaxed may shed metabolites, such as the spike protein.

We don't need to go into the science behind all that here. But the critical part to realize in our discussion is that virtually everyone has a reason to not go to work. A feeling that work may not be as safe as we previously thought.

I point your attention to the tremendous lines at the Covid Testing Stations that we saw this weekend, a line which included several of my family members, as an indication of just how focused the American people are on this issue.

So understanding that Covid is front and center on the nation's mind. And that people may be reticent to go to work. Let's see if there are any data points that might confirm a trend in the economy.

Now what began this thinking was the announcements by the Airlines over the Christmas Holiday, that something like 5 or 6,000 domestic flights were delayed or canceled.

“We have a labor issue,” said the airline spokesmen. Simply not enough staff to board passengers and baggage and fly the planes.

Now all year we've been reading that there are a tremendous number of jobs available, but no one to take them. Earlier this year the number of job openings peaked at just about 12 million.

And although the number has come down for a couple of months, right now it looks like we're headed back up to that record. And I'm sure that some of those job openings are in the Airline Industry.

Another worrisome statistic in the labor market is the number of workers who are quitting their jobs. 10 years ago we were averaging about 1.5 workers who would leave each year.

Just two months ago that number doubled to 3 workers leaving their jobs per year. That in and of itself can put a tremendous strain on the factories, offices, and yes even airlines to continue operating at maximum levels.

This brings us to our final indication that this economy is facing some labor force headwinds. As a significant number of workers are still reticent to return to work.

Overall, we know that before the pandemic struck, in February 2020, we hit an all-time high, with 164.6 million workers employed. Today we're about 2 ½ million workers below that level. Representing a decline of about 1 1/2% of the total workforce.

Now a simple analysis would say that today's economy continues to function below optimal levels.

Three simple data points tell us that from a labor perspective this economy is experiencing trouble.

An all-time record number of job openings.

An all-time record number of workers quitting their jobs.

Roughly 2 ½ million fewer workers are employed today, than when the Pandemic began, less than 2 years ago.

Add these three together, and you have an indication that this economy may seriously slow unless we can bring labor back.