Post COVID customer service

[TexasHusker]

We've often tried to "go local" over the years, only to have the local guy sell out to one of the big players a year or two later. It happened with our alarm company. It happened with our HVAC contractor. It happened with a few others.

Just this year, the lawn guy we've used for quite a few years notified us that he was getting out of the business. He referred me to another local guy. Between the time I reached out to the new guy and the time he got back to me, he had already sold out to a much bigger (though still local) landscaping firm.

It's hard for the independent places to compete because they just don't have the staff, budget, or service (or prices) that comes with size.

I think this last year is presenting small businesses with a once-in-a-generation opportunity.

[disneysteve]

Everywhere I go there are "Now Hiring" signs in the windows. When I ask the managers and staff about them, they say no one is submitting applications.

The labor situation brought on by COVID is complicated. And anybody who thinks the issue is a couple of stimulus checks or boosted unemployment payments is part of the problem.

For example, all of the job gains in the April job report went to men. The number of women in the workforce actually fell by another 64,000 that month. Droves of women have been forced out of the workplace because of childcare issues. In many places, schools are still virtual and many childcare locations haven't reopened yet or have closed permanently so somebody has to stay home with the kids. Many people are hesitant to get back to work until they have been vaccinated. Looking at low wage jobs, that's primarily minorities who are the ones having the greatest trouble getting the vaccine and who were most impacted by the pandemic. A high percentage of deaths were in older people, but many of those older people may have been the caregivers for their grandkids while their parents worked. That's a very common arrangement especially among lower income workers who can't afford childcare.

And the whole situation the past year or so has really made a lot of people reevaluate their working lives in general. Many people don't ever want to go back to an office setting or a long commute. A lot of people started small businesses. Many people who were able to retired earlier than they had originally planned. Heck, I've been crunching the numbers to see if I can realistically retire next year which would be at least 2 years sooner than I had been aiming for.

COVID is going to have a significant long-lasting impact on the labor market in many ways. It accelerated some trends that were already happening and introduced other issues as well.

[james.hendrickson]

The labor situation brought on by COVID is complicated. And anybody who thinks the issue is a couple of stimulus checks or boosted unemployment payments is part of the problem.

For example, all of the job gains in the April job report went to men. The number of women in the workforce actually fell by another 64,000 that month. Droves of women have been forced out of the workplace because of childcare issues. In many places, schools are still virtual and many childcare locations haven't reopened yet or have closed permanently so somebody has to stay home with the kids. Many people are hesitant to get back to work until they have been vaccinated. Looking at low wage jobs, that's primarily minorities who are the ones having the greatest trouble getting the vaccine and who were most impacted by the pandemic. A high percentage of deaths were in older people, but many of those older people may have been the caregivers for their grandkids while their parents worked. That's a very common arrangement especially among lower income workers who can't afford childcare.

And the whole situation the past year or so has really made a lot of people reevaluate their working lives in general. Many people don't ever want to go back to an office setting or a long commute. A lot of people started small businesses. Many people who were able to retired earlier than they had originally planned. Heck, I've been crunching the numbers to see if I can realistically retire next year which would be at least 2 years sooner than I had been aiming for.

COVID is going to have a significant long-lasting impact on the labor market in many ways. It accelerated some trends that were already happening and introduced other issues as well.

Best post of the day.

1) I had no idea about the disproportionate impact on minorities.

2) And its almost certainly correct about the long term impact on the labor market. Maybe 6 to 9 months before the country normalizes.

[TexasHusker]

As a business owner, I can say for certain that free money from the Treasury has impacted our ability to recruit new talent.

I’m not quite sure how recognizing this makes me a part of the problem. I’m writing $60K in payroll checks every two weeks, so I kinda sorta know what I’m talking about, I have no reason to lie.

[disneysteve]

2) And its almost certainly correct about the long term impact on the labor market. Maybe 6 to 9 months before the country normalizes.

If by "normalizes" you mean getting back to where things were in 2019, I don't think that's going to happen. I hate the expression "new normal" but I believe there are going to be permanent changes in our society. I don't think we're ever going back to where we were 18 months ago.

[disneysteve]

As a business owner, I can say for certain that free money from the Treasury has impacted our ability to recruit new talent.

I'm not saying that isn't one factor, but it's only one of many. I see a lot of folks suggesting that it's the entire cause of the problem. Getting a couple of checks might have allowed someone to stay out of work a few weeks longer, but it's only a short-term fix. They still need jobs going forward.

[disneysteve]

And TH, serious question. How do you know that stimulus money has impacted your hiring? Potential applicants wouldn't come in and tell you that. They just wouldn't apply in the first place. How do know what's keeping people away isn't lack of childcare, for example?

[TexasHusker]

And TH, serious question. How do you know that stimulus money has impacted your hiring? Potential applicants wouldn't come in and tell you that. They just wouldn't apply in the first place. How do know what's keeping people away isn't lack of childcare, for example?

Folks are pretty honest. We’ve contacted a number of folks who have left us and subsequently filed for unemployment. We get an alert of course, contact them to say we will rehire you immediately, and they will respond “ok, I’ll think about it”, or “I’m only wanting to work a few hours a week now.” We have had MANY applicants fill out job applications and say “I’m not really wanting the job, but TWC is making me fill out applications.

I have no reason to lie.

[TexasHusker]

Oh and it’s much, much more than a couple of checks...

[james.hendrickson]

If by "normalizes" you mean getting back to where things were in 2019, I don't think that's going to happen. I hate the expression "new normal" but I believe there are going to be permanent changes in our society. I don't think we're ever going back to where we were 18 months ago.

Disneysteve, I mean if there is demand for childcare, markets will inevitably respond. It just takes some time for this to happen.

[disneysteve]

Folks are pretty honest. We’ve contacted a number of folks who have left us and subsequently filed for unemployment. We get an alert of course, contact them to say we will rehire you immediately, and they will respond “ok, I’ll think about it”, or “I’m only wanting to work a few hours a week now.” We have had MANY applicants fill out job applications and say “I’m not really wanting the job, but TWC is making me fill out applications.

I have no reason to lie.

I wasn't accusing you of lying. I was truly curious how you would know. If you are reaching out to former employees, that could give you some indication if they specifically tell you it's because of unemployment. Of course, there could also be other reasons (like childcare) that are preventing them from coming back or working the same number of hours.

Of course, this also isn't a new issue. This has happened for years. My MIL used to play this game a lot. She would leave a job and collect unemployment for the maximum time she could. Then and only then would she find herself a new job.

Benefits end eventually though. You can't stay on unemployment forever, so the folks passing up good job opportunities because of that are going to get a rude awakening one of these days.

[disneysteve]

Disneysteve, I mean if there is demand for childcare, markets will inevitably respond. It just takes some time for this to happen.

The childcare industry was struggling before the pandemic. It is highly regulated but very low paid. It's very tough to succeed in that field. The pandemic put many places out of business and they won't be back as their owners and staff were forced to find new jobs. Until our nation makes childcare a priority, it's going to continue to be a huge problem, especially for woman and especially for lower income workers. You can't take a job making $15/hr when the average cost of daycare is $1,000/month.

[TexasHusker]

Luckily, we are an employer of choice in our industry and in our city. We have little turnover.

But the root of this situation is free money. Yes, childcare is an issue, but that’s because the childcare workers aren’t working any more - they are receiving and spending free money. It’s not because of covid at least in Texas. Schools and childcare have been open since late last summer here.

This is a very troublesome situation for our country.

[ua_guy]

Consider me completely unsympathetic. I can see where people would rather be on unemployment in lower tiers of income, moreso in hourly jobs where benefits, time off, are scarce. But this isn't true in higher levels of incomes where unemployment doesn't actually replace what a good job pays.

If the cost of labor has gone up, then markets will just have to pay more. Supply and demand. Complaining about is an option, as is raising wage and introducing other benefits to attract the workers you need.

There's no moral judgement, however. No obligation, "people should work". Workers should do what's right for themselves and their families.

[TexasHusker]

Consider me completely unsympathetic. I can see where people would rather be on unemployment in lower tiers of income, moreso in hourly jobs where benefits, time off, are scarce. But this isn't true in higher levels of incomes where unemployment doesn't actually replace what a good job pays.

If the cost of labor has gone up, then markets will just have to pay more. Supply and demand. Complaining about is an option, as is raising wage and introducing other benefits to attract the workers you need.

There's no moral judgement, however. No obligation, "people should work". Workers should do what's right for themselves and their families.

Rich government payments from $ trillions of new deficit should not be competing against employers. Completely asinine. Unemployment is $50K a year right now in many states. Why should you and me be subsidizing - with our own earnings - other people to not work? I just don’t get it.

Wages are rising. But don’t complain when your prices go up accordingly. They have to. No sympathy.