In Indiana, hospitals can’t keep healthcare workers because Walmart is offering higher pay and lower risk. Why work at a hospital with sick patients and worry about them dying when you can work at retail and check people out or stock shelves?
For lower-level positions, the hospital competes with the local Walmart store, where wages are rising. He monitors the pay offered by the retailer as well as the other large local employers, a hose manufacturer and an irrigation equipment supplier. “What used to be an $8 job now is $15,” said Bruntz, a 52-year-old who once worked as an accountant for KPMG. “That’s the only way we get people to come to work.”
ArcaMax
In Iowa, a nursing home filed for bankruptcy because they couldn’t find enough workers to take care of the patients.
QHC Facilities LLC filed for bankruptcy last week, citing “crippling staffing and employee retention issues” in a court filing. The Clive, Iowa-based company operates eight skilled nursing facilities and two assisted living homes with a total of about 750 beds in the state and 300 workers.
Bloomberg
Across many states, new minimum wage laws went into effect and it is becoming clear that many businesses, especially small to medium size businesses haven’t thought about how to re-define their business model in a new higher labor wage inflationary environment. Large corporations have analytical team that conduct future projections and adjust their pricing models accordingly and they have deeper pockets so they can afford to retain or higher people at higher wages.
CNN has a very nice table summary of new minimum wages across Arizona, California, Colorado, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, New Jersey, New Mexico, New York, Ohio, Rhode Island, South Dakota Vermont, Virginia, Washington. The new wages range anywhere from $9.20/hour to $15/hour but as we noted in What’s Happening With Hourly Wages? T-Rex Will Eat First, many companies are already paying way above $15/hour.
To understand the problem graphically, data from Pew Research on rates of baby boomer retirements combined with trends in JOLTS (job opening and turnover) from the BLS. On average over the last 10 years, boomers were retiring at a rate of about 2.0 million and in 2020 that rate jumped to 3.5 million. It is no coincidence that the JOLTS number increased significantly from an average of 6 million job openings to nearly 10 million and growing.
It’s the boomers stupid! American society is top heavy baby boomers and that cohort of people is on its way to retirement. By 2030, ALL baby boomers will be over the age of 65 and have the option to opt for social security and enroll in medicare for health insurance. Given that 80% of the wealth is controlled by 20% of the population, we imagine that 80% of boomers will opt to retire as soon as possible. The key problem of course, is that boomers carry with them decades of experiences and knowledge that won’t be easily replaced by younger generations.
The only thing to do is plan your investment portfolio accordingly.
Stay tuned and stay solvent.