The Economy is Broken, and Employees are Uniting

Luay Rahil
Photo credit: Canva

Come closer. I need to tell you something you are not ready to hear, "The economy is broken, and it is waiting for you to go back to work."

Economists predicted that the economy would recover once schools reopen and the expanded unemployment benefit expires. However, that didn't happen.

Last month, The Labor Department reported that our workforce shrank to the lowest point in a very long time. The slow return of workers is causing heartache and headaches to many politicians, academics, and economists to help our workforce go back to work and help the economy recover.

This slow recovery is causing the world to run out of resources. I have talked to economic development experts, and the length of this problem blindsided them. They thought that once school reopens and expanded unemployment benefits ended, employees would go back to work. That didn't happen.

On the other hand, some experts say, "We don't have a labor shortage. We have a wage shortage." However, I can debunk that by saying that the labor shortage is not limited to low-wage jobs, and many employers offered more money, and employees didn't come back to work.

The issue is a multifaceted problem that can't be solved by throwing money at the employees. So let's discuss some of these factors.

High Tech vs. High Touch Jobs

Some employees are still concerned about their health, and they would rather work in a high-tech job and not a high-touch job. So that creates a major problem for the service and health care industries. Nurses, food workers, teachers would rather get jobs that don't involve touching other humans.

Some service workers have left the industry and found more lucrative jobs that pay more and provide them with separation from customers. But, unfortunately, you can't pay these employees enough to go back to work in restaurants where they are underpaid and underappreciated.

Other employees stayed home for an entire year, adjusted their spending habits, and are comfortable with one income now. Reba is a friend of mine, she has two kids, and she used to pay 70% of her income to daycare, so she decided to stay home. No amount of money can convince her to come back to work before her kids go to public school.

The public sector is struggling just as much—government payroll shark by 123,000 jobs last month, most of these losses in education. So when government employees refuse to go back to work, you need to know that we have a serious problem in this country.

Economists are worried about two things: more people opt out of the workforce, or employers fail to adapt to the new circumstances. Unfortunately, I hate to say this. This trend impacts more women than men and ultimately hurts the progress that was accomplished in the last 70 years.

Freedom and Flexibility

Employees are looking for opportunities that employers can't afford to offer. They want freedom, flexibility, fit, and a good salary. They want to have autonomy over their schedule, have flexibility with working remotely, feel that they fit the organization's culture, and make good money.

It feels that the entire workforce formed a union, and they are negotiating with employers without having to come together collectively, and I believe employees will lose in the end unless if they channel their newly found power in the right direction.

The Clash of Powers

Jeremy Heimans and Henry Timms distinguish between old and new power in their book, New Power, "The old power works like a currency. It is held by few and is zero-sum. Once gained, it is jealously guarded, and the powerful have a substantial store of it to spend. It is closed, inaccessible, and leader-driven."

New power "Operates differently, like a current. It is made by many. It is open, participatory, and peer-driven. Like water or electricity, it's most forceful when it surges. The goal with new power is not to hoard it but to channel it."

The power has shifted, and employers don't understand how to deal with employees who created new power. For example, if an employee can work for DoorDash instead of working for a restaurant, he would make more money, create his schedule and have the freedom to work in any city that he likes. In this case, restaurant owners don't have the power any longer.

The new power empowers the individuals. However, individuals need to channel their power and energy correctly. Movements without any structure don't last. For example, Occupy Wall Street movement started strong and disappeared. They lacked structure.

The Fight is Raging

In this case, the employers represent the old power and will fight the new power because it means a rebellion against them. However, the only weapon they have used is money, and employees are looking for more than that.

In this clash of power between employees and employers, none of them are losing. On the contrary, employees who can afford to stay home are staying home, and employers adjusted the customer's expectation to wait longer and accept lesser service.

I know that most service industries in North Texas are struggling. I went to Chiptole two days ago, they had three employees, and customers cleaned their own tables. How long before customers have enough?

Who is Losing?

The losers in this war are single mothers and employees who can't afford to stay home. They have to work harder and longer than before. All of them are working harder, getting abused by owners and consumers at the same time.

I know restaurants owners who improved their profit margin by saving 50% of their labor costs. But, the question remains, how long before we can lose most of our fast-food workers? Nurses? Teachers?

I won't encourage my kids to work in any of these industries, and I doubt that fast food restaurants will exist in 30 years. The cost of service will be prohibitive to provide. It is the basic supply and demand principle. If the demand for employees exceeds the supply, we have to pay more employees more money to work. How much more before Big Mac costs $15?

When will most employees go back to work? Who is going to win the battle, new power or old power?

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Writing on business, culture, leadership, and social issues.

Fort Worth, TX

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