The Wall Street Journal had an interesting article about how businesses in Louisville, Kentucky such as UPS are having to up the hourly wage to $20/hour to find and retain workers. This is putting pressure on all other local businesses to compete and find/retain workers.
Interestingly, USA Today is reporting that DoorDash is now requiring ALL employees to act as delivery drivers for the business including corporate employees that aren’t really hourly wage workers and some employees are none to happy about the situation.
Neither article however mentions the core issue with the labor force. In, It’s The Boomers Stupid! We wrote about how older workers are simply opting to retire and not return to the work force and that is the driving factor in the labor shortage and there is no easy fix to the issue.
In Labor, Inflation, Immigration, Boomers – The Perfect Storm – 2022 thru 2030, we talked about how 10,000 boomers retiring each day are draining the American labor force and how reductions in immigration are exacerbating the problem. The problem will grow exponentially from 2022 thru 2030.
And in University Apocalypse 2025, we looked at the other end of the spectrum, young people, or rather the lack of sufficient number of young people graduating high school and enrolling in college.
What does it all mean?
It means that starting in 2022 thru 2030, we will have a reduction of labor and productivity but we will have an increase in demand for goods and services. Boomers, about 70 million, will all enroll in social security and medicare and draw income and health benefits from the U.S. government while retiring from the labor force. Boomers will tap the health care system in larger and large numbers as well as other goods and services while there are fewer and fewer people to perform the work. The net result will be a combination of wage (hyper)inflation and productivity (hyper)deflation. Don’t forget that the global population will continue to grow while the American population growth rate slows or declines.
As we end 2021 and start 2022, we are in for rough seas and we are shoring up our investment portfolio to maximize returns in this new world economy of supply chain disruptions, labor shortages, declining productivity and increasing inflation.
Stay tuned and stay solvent.
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