An Entirely Too Familiar American (Anti)Inflationary Anecdote

One of the more compelling aspects of the last LABOR SHORTAGE!!!!, in an outright contradictory way, was how it was made up of entirely anecdotes. Lacking data, especially wage data, the narrative was instead kept up and alive by the media hyping every small creative innovation companies were using if only to avoid having to actually pay their workers and prospective workers the market-clearing price.

The stories have returned in 2021 already granted a similar seriousness if for those same reasons. Inflation sells, or at least the idea of it is in demand.

But the data remains ambiguous – at best. And even where this is the case, there’s more to question than to commend from the perspective of any prospective labor shortfall. Like JOLTS data released yesterday, the raw numbers appear to support the idea that companies once again aren’t willing to pay what’s required to satiate their purported overdrive for workers.

It could be a number of possible reasons but the most likely, certainly in my view (FWIW), is likely to have started with low starting pay supplemented by promises of better pay down the road. Companies, especially small and medium-sized businesses, the same who claim to be most hard-pressed to find workers, are and have been deeply hurt by the recession. Thus, the pay mis-match.

Also like 2018, but having been taken now to an extreme in the wake of the deep, damaging 2020 recession. Businesses may want some more workers but just don’t have the true capacity (or sustained optimistic vision to take risks) to pay them enough.

Or pay them at all?

Since the labor shortage has been all about anecdotes, this one’s a real doozy:

American Airlines is asking its headquarters employees to volunteer at Dallas-Fort Worth International Airport this summer as the carrier faces an influx of summer passengers due to pent-up pandemic demand…Those headquarters employees, who work in fields such as network scheduling, planning and communications, won’t be paid for the additional shifts and must volunteer outside of their normal job duties. [emphasis added]

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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