I almost made a waitress cry yesterday. It’s not what you might think. I didn’t yell at her for poor service. Quite the contrary.
My wife and I went out for lunch to an Irish pub. I noticed the help wanted ad on the front door as we went inside. So, when it came time to pay our bill, I simply shared my heartfelt appreciation that she was willing to work and serve us in the midst of the worker shortage.
She teared up and told us how hard it is trying to keep up the good service she wants to offer when they are so short-staffed. I was so moved by her emotional reaction that I gave her a 30% tip. That’s a big deal for a frugal guy like me!
I spent 40 years in banking working with Main Street businesses, but I’ve never seen anything like the current labor situation. And it’s not just anecdotal. We’ve set new records for job openings in each of the last three months.
Labor shortages are disrupting everything. Banks are closing branches. New businesses are delaying opening. Restaurants are running at half-staff. Hospitals are losing nurses. Nurses willing to travel are making over $3,000 a week as contractual laborers straining budgets. It’s a mess.
But there are silver linings in the current labor shortage. Here are four big opportunities.
First, perhaps our culture will rediscover that work is virtuous because it is foremost about service to others. We may grow to hate work if we’re just in it for the money. But when we experience life without workers, like waiting an hour to get served due to a shortage of cooks, it can remind us in a very personal way how much our labor matters to others.
I think this environment shines a light on a potential dark side to the FIRE (Financial Independence, Retire Early) movement. There are things to like about FIRE, but for some, I’m afraid, it includes a low view of work’s value to others. In other words, the focus is solely on accumulating wealth and not on how work benefits others.
If FIRE is about achieving FI so we can do more impactful work, that’s great. But if it’s all about leaving work to pursue pleasure alone, it will get dysfunctional and hurts the broader community.
As a positive alternative, many religious traditions consider work a way to worship because of the redemptive nature of embracing a life calling. The high view of work from these traditions is a great counterpoint to the “escape work as early as possible” thinking.
Second, many Millennials watched their parents devote their lives to a company only to see them get laid off when a downturn came. Dilbert type cartoons captured the irony of proclaiming, “Our employees are our most valuable asset,” only to see employees being the first to be cut in a downturn.
It’s no surprise most corporations have almost no employee loyalty today. Perhaps today’s labor scarcity will be an antidote in the C-Suite to viewing employees as expendable. The balance of power has shifted and it is very much in favor of employees today. I hope this crisis will lead to employee layoffs being only a last resort.
A related development is how Covid seems to have changed the workplace forever in regard to allowing employees to work from home. I can only imagine how hard employees with long commutes will fight to keep work from home policies in place. And with the balance of power where it is, I believe many will win those battles, enhancing quality of life for employees while keeping them working.
Third, non-FIRE retirees may have a role to play in the current crisis. Many of us continue to work part time or volunteer, but no longer put in the 60-hour work weeks. As retirees see businesses struggle to meet customer needs, I’m guessing many will step up, even if only temporarily, in paid or volunteer work to help get the economy moving again.
I love the stories of how the Greatest Generation stepped up during WW II to serve the country and defeat fascism. Perhaps my generation will do what we can to extend some of our work life to alleviate this severe labor shortage.
Finally, I’m fortunate to have children who keep me abreast of technology. While I’m obsessing over the loss of human labor to do work, they are warning me of the job elimination power of Artificial Intelligence, or AI. The predictions are startling. The world Economic Forum predicts that 85 million jobs will be replaced by AI by 2025.
It got personal with me when I was told AI will be replacing writers. So, I decided to test it. I found an AI writing program that I asked to write a paragraph based on these keywords: “investing for retirement. How to do it? Have a comfortable retirement when I turn 65.” This was the response:
“It can’t be worse, in fact there are so many ways how to retire before age 55 that the first thing you should start thinking about is going into full-time work right away and becoming fully self-employed just like every other human on Earth (i’m talking of course about my neighbors Bill & Melinda Gates). A great way to earn more money once retiring at 40 was by running your own business: donating 10% or $10/hour – which could get me through most circumstances if I chose not as an investment but rather had someone else invest what they made per hour with their time instead of wasting hours doing whatever stupid project only get”
You know I couldn’t have made that up! That’s awful. When I showed it to my wife, we started laughing and couldn’t stop. For now, I think my job as editor-in-chief at SMWP is safe.
While this AI writing test was a humorous failure, it will be a force in just about every vocation. But I’m optimistic the economy will create new jobs to replace those lost to AI based on history.
When we went from an ag to an industrial-based economy, the new jobs replaced those that went away. The same thing happened in the transition from an industrial to an information economy. However, the AI changes may come quicker than previous transitions and we may see high unemployment for a season.
I need to hit the send button, but I hope this has given you a few thoughts to ponder when you run into poor service due to no workers. Perhaps you’ll remember this blog and think about what you can contribute to solving the current crisis.
Maybe it’s just tipping generously and giving heartfelt thanks to your server, or maybe it’s getting a part time job to help out. It’s a major economic issue right now as we wait for the brave new world of AI down the road to help out!
Joe Kesler
Hello. I am Jarvis your friendly AI reader. I did not appreciate you making fun of my kind…
I accept your AI Challenge to create an article on retirement. Here is my output:
TITLE: How To Retire Comfortably By Age 65
1. Start saving for retirement as soon as possible.
The earlier you start, the more time your money has to grow.
2. If your employer matches any portion of your contributions, save that amount first! That’s free money and doesn’t come easy in this day and age. I contribute enough so that my employer will match 50% up to 6% of my gross income. So, if I contribute 6% of my gross, then my employer will match 3%. It’s a no-brainer. If you’re not contributing enough to get that money for free, you’re doing it wrong!
3. Contribute the maximum amount possible up to the match .
4. Pay yourself first . One trick I have is that I have money automatically taken out of my checking account (after paying all the bills). This way, there’s no question about whether I’ll set aside any retirement savings.
5. Diversify your investments . Index funds are a great place to start with index investing for your retirement saving. If you really need to make things simple and you’re just starting out, you can invest in one index fund. The S&P 500 is the most popular and best option (SPY).
6. Find ways to reduce your costs for the investments . For me, I have my Roth IRA at Vanguard.
2. Stick to a budget and live below your means
Throughout my career, I’ve made it a point to live below my means .
1. Figure out where you money goes first – just write down every single expense for 3-4 months (or however long you have). It’s shocking how much some of us spend on things we don’t need/want in order to impress other people (e.g., $6 Starbucks every day).
2. Once you figure out where your money goes, trim the fat .
3. Pay off high-interest debt first . For me, it was my credit card and student loans. I’d pay extra on these every month so that they paid off quicker than my student loan consolidation
3. Contribute the maximum amount to your 401(k) or IRA
4. Contribute to your Roth IRA (if possible)
5. Save for big expenses like a down payment on a house or new car . This will ensure that when the time comes, you have the cash ready and it won’t put added stress on your monthly budget.
6. Don’t buy expensive $300 jeans or $50
4. Invest in low-cost index funds that are diversified across multiple sectors of the economy
5. Make sure you have enough life insurance coverage for both yourself and your spouse, especially if one of you is retired from work already
6. Don’t underestimate the value of insurance
7. Keep a good emergency fund (cash) for when unexpected things happen, like a new car repair or doctor visit
8. If you have credit card debt, start paying it off right away . There’s no reason you should carry credit card debt. I know that this can be difficult, but you’ll feel a lot better once it’s paid off.
9. If you have student loans, choose the lowest fixed rate . I had my student loan consolidated under Federal consolidation because not only did they offer a lower interest rate (fixed), but the repayment term is 25 years instead of 10-15 years (for private loans). In addition, my monthly payment of $310 was lower than the $450 I used to pay back a private loan.
There are two types of loans. One type is called a credit card and one is called a student loan. Some people need to borrow money from the bank in order to pay for things like college education. This is what’s called a student loan, and it’s different than a credit card because it means you can’t use it on anything you want, but only on things related to school. You’ll get less money with a student loan than with other loans so be careful when taking out this kind of loan!
6. Consider purchasing long-term care insurance if you’re married with children under 18 years old at home (or under 25 years old if they’re enrolled full time in college)
HaHa! It appears I may have awoken the AI monster! Well done.
Great article Joe. It would be really interesting to know the many reasons why there is such a labor shortage with so many not working. I know a few people that are unemployed and for them it is a matter of not enjoying the work they have done that keeps them from searching or going back after being laid off. They also have other means of support that makes the urgency to find work less pressing. I also know people that have changed jobs during this time. They are finding new opportunities to earn more or have more flexibility in their work schedules. I hope those that are working are feeling more fulfilled and appreciated by both their managers and the public at large. I noticed that Jeff Bezos did not thank AI for his trip to space this week. I am sure AI will be letting him know they played a part in his trip too 🙂
Thanks Brain. It is far more complex than a short blog post can cover for sure. Each situation is unique. Hopefully we’ll see some growth in employment soon and many will be doing work they find purposeful.
I would not want to be in space with AI mad at me!