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  • Andy Hitch

Labor Shortage - What the Hell is Wrong with People?

I've been an employer on and off for over 30 years. In between times, I was an employee working tough jobs. So, I have mixed feelings and opinions about the current labor shortage.

Starting pay in my business for nearly the last decade has been $12 an hour for an unskilled basic job. In just 6 months I have had to increase my starting pay to $18 just to get people to apply. Even at that, I'm only seeing bottom of the barrel prospects.

Just 11 years ago I was more than happy to have a job at a factory that started at $17 an hour. That was great pay back then. I had to work 6 days a week and second shift to get that money. Now, even McDonalds and Walmart are starting people at $18 an hour or better.

While I'm happy to pay $18 an hour because I do believe minimum wage needs to go up, I'm extremely concerned about the mindset so many prospects have these days.

I personally believe the COVID lockdown changed the mindset of working Americans. I think everyone got so much time at home with family and time to do things, it changed their outlook on life in general. I think maybe many people discovered the value in personal time (something this country has never seen). Now, they're demanding more personal time and a work culture based on minimal hours and responsibility. The problem is, some of these people are expecting the same rate of pay or even more.

We don't just have a labor shortage, we have a shortage of quality employees.

In order to make my current employees happy, I've drastically increased my rate of pay, gone down to a 4 day work week with 3 days off in a row, and wildly increased vacation time. Overtime used to be something people looked forward too when it paid time and half. Now, I even struggle to get people to work 4 days at 8 hour shifts.

It's an employee market right now, but it won't stay that way. Not with how the economy is looking. Things will eventually balance out. Things always have a way of balancing out in the end. Problem is, I think it will swing the other direction soon and those bottom of the barrel employees are gonna be S.O.L.

There is another factor I think very few experts, if any, are looking at. The economic boom has given folks the ability to start small businesses and be successful. I lost almost a dozen good people in 2021 to small business ownership. I own an ATV rental company. I swear to you, I could have rented pogo sticks and made bank in 2020 and 2021. However, that's changing fast. Where a person could sell just about anything on Etsy, Amazon, ebay, facebook, or wherever else, they won't be for very long. Not and make enough money to live. The smart, strong, and committed will survive. The rest will re-enter the work force and we'll have quality prospects once again.

Flipping in-demand products has become a seriously profitable business. Here are a few examples:

  1. I know a used car dealership that buys every new Toyota 4runner that comes in at 4 or 5 different new Toyota dealerships. For this reason, you can even think of buying a 4runner at MSRP from a Toyota dealer. You can only find them at used dealerships at over MSRP. Even regular everyday people are doing this as well. Hell, even I did it. I bought my dirt bike for 8K and sold it for 10K after putting over 100 miles on it and scratching it up.

  2. People are buying ATV's, motorcycles, cars, boats, and all sorts of stuff and they're flipping them on Facebook Marketplace for more than they paid. They're making a good living at this right now because of the supply chain issues.

  3. I have a buddy who was lucky enough to buy a 2022 Corvette for MSRP from a GM dealer. He sold the damn thing for 25K over what he paid just 2 days later. Christ, that's a half a year's wage for this guy. He was smart. He took out a second on his house to pull it off. He's done other vehicle types as well.

Here's another factor, and I'll use my wife as the example: She has had a 401K for 20 years. It's been gaining roughly 7% since day one. Since May of 2020, she has gained 47%. That is one HELL of a jump in just two short years. Granted, she was aggressive with it when she saw the serious dips in major companies like United Airlines and such. She bought a ton of airline stock in May of 2020.

I personally know a few people who've retired way early because of the gains they made in their 401K. Yet another reason we've lost quality work force.

There are those who blame the demand for products on the federal stimulus payouts. That's bullshit. $300 here and there and another $1400 in a year doesn't do it. That only allows people to pay off a credit card (maybe). It doesn't afford them to go out and buy a $25,000 boat. Now, getting an extra $600 a week for over a year, while collecting their regular unemployment, and then working under the table somewhere or flipping in demand products for profit, that's a different story all together. This is a major reason why we have a shortage of goods and workforce. A lot of people who normally don't make much money in their lives capitalized on the situation and it has thrown everything and everyone for a loop.

Like they say, "what goes up, must come down". The booming economy is on it's last leg. We all know it. We all see it coming. The only thing keeping the work force limited currently is the supply chain shortage due to the lack of manufacturing in 2020 and the demand for products at that time.

I've been in business during booming economies and I've also barely survived the great economic collapse of 2008. We're not headed for another great collapse (I don't think), but we are headed for a serious downturn. People's 401K's and small businesses will stall here soon. Part of me will hate to see this happen because I too, will take a financial hit. However, my business will weather it. Another part of me looks forward to the downturn so I can get some stability in my staffing. Life is real hard for an employer right now.

Having said all that, I honestly do hope it stays this way. Yes, it will be hard on me as an employer, but it's the right thing for Americans. Wages have been too low for too long and corp. America has been shafting workers since day one. It's about damn time things changed.

Andy Hitch

Backbone Adventures

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