At the intersection of The Great Resignation and Remote Work is an opportunity for employers, employees, and consumers to cooperate and mend some of the damage to the economy.
August 8, 2022
By: Bobby Casey, Managing Director GWP
Culture and government are institutions that lay the groundwork for how a society functions. I’m not saying government is essential to a functioning society, as much as I’m saying it is a larger institution with a lot of control over society, however contrived.
A government can only go so far before the people lose trust and give up hope. It’s not often seen as an all-at-once thing as much as a gradual phenomenon. We all have our individual limits.
I opted out and became an entrepreneurial digital nomad early on. I was done before I began! The system was a non-starter for me. But the vast majority of people in the early 2000s still found the system to be compatible enough to plug along.
Fast-forward 20 years and a strange confluence of trends are hitting at the same time. Unto themselves they aren’t enough to shake a society. But combined they are quite dangerous.
It’s difficult to say what order these should be, but they are all at play.
Government Fiscal Malfeasance
This was happening for a long time. 1913 was a critical year where the Federal Reserve was instituted, the US came off the gold standard, and the Federal Income Tax was codified.
Since then, the US has been primarily running on fumes and imagination. The only thing really propping the US dollar up was war and an agreement with Saudi Arabia to be the reserve currency for the sale of OPEC oil.
Today the US is in a decades-long losing protocol of monetizing its debt through inflationary policies. The central bank is robbing people of the value of their money; and the tax regime is relentlessly coming for “their fair share” of what others have earned. People are losing money faster than they can make it because their economic candles are being burned from both ends.
Government Policies and Regulations
Forcing the shutdown of an economy or even the majority of it as it did in 2020 was bound to have profoundly negative effects the world over. I’m rather annoyed that the public conversation regarding the current economic situation around the world doesn’t hearken back to how lock-downs played a huge role.
But it wasn’t just the lock-downs. It was the utter betrayal of trust, and having no real way out of it. Finding out that the media spin was largely fabricated and untrue, and then slowly realizing them giving up their livelihoods never really saved lives is a rough realization.
Now people are behind on their rents, mortgages, and debts, still trapped by decisions made over two years ago. Businesses have also closed down for good.
Stark examples include the vaccine mandates that lead to the trucker protests; the net zero green agenda that has Dutch farmers protesting; the closure of oil refineries and the anti-fossil fuel political climate and the surging cost of gasoline.
Producer Morale
This is another one that has been a long time in the making. From businesses divesting out of high tax and high regulation states into other more business friendly states, to corporations inverting out of high regulation high tax countries in favor of lower tax lower regulation countries, businesses large and small are “Going Galt”, so to speak.
With a growing anti-capitalist sentiment, and a cancel culture toward anyone who engages in labor practices that don’t align with their first world view.
You’re punished if you take a position on a particular issue. You’re punished if you don’t. You’re punished for trying to keep prices low by trying to keep overhead low, you’re punished if you raise prices.
There’s no winning because feelings toward appearances supersede basic economics.
Worker Morale
Wages aren’t really keeping up with the cost of living and inflation. If parts are more expensive, then products and services are more expensive. If the things cost more, then why hasn’t the cost of labor gone up commensurate to the value of the currency? If my job was worth $50,000 USD in 2010, and the dollar has since depreciated in value 15%, giving me a salary adjustment of 15% makes sense. It’s not a raise. But money has been debased but my labor has not.
But people work more, and pay more while making less. And it’s the most vulnerable that feel this. The poor and under-skilled folks trying to work their way up but can’t seem to make any headway.
Companies are cutting corners to avoid raising prices, and they are vilified because that leaves the remaining staff taking on more responsibility for less pay.
People are quitting. Not just quitting jobs, but quitting on trying. They are being overcome with apathy.
What has all this amounted to?
A lot of brokenness. A lot of layoffs are coming from the Big Tech industry: Netflix, Meta (aka Facebook), GoPuff, Coinbase, and Redfin to name a few.
We’re told we have a healthy job market! In the US there are approximately 10.7 million job openings. But it appears no one wants them.
There are plenty of jobs that aren’t getting filled by people who are perfectly capable of doing them, but just won’t bother and see no value in doing it.
Unfilled labor means reduced production. Reduced production means reduced supply. Reduced supply and high demand means higher prices. This is untenable. The Great Recession Blog observes:
“What you are really seeing is deep signs of stagflation. Production is down because labor supply is way down. Besides not being able to get parts and materials due to Covid– and sanction-related supply chain breakage, manufacturers also cannot get workers. That means gross domestic production HAS to fall. That means prices are likely to rise more due to scarcity. That is a recession by definition, and when it happens when prices are rising anyway because of scarcity worldwide, then you have a stagflationary recession.
“The bottom line there is that, if workers don’t return to work, the ratio of producers to consumers will remain seriously deficient, which means there will not be enough goods or services for all of us who want to consume them, forcing prices to remain high, even as the economy shrinks….”
Something has to give. But big employers are still very obstinate about flexible work schedules. It’s like a mental tar pit for many. As I discussed a year ago in “Why the Hesitation to Embrace Remote Work“, people have it ingrained into their brains that being physically present is indicative of productivity.
Elon Musk believes remote workers are just faking it.
He’s not entirely wrong, but he’s not entirely right either. People pretend to work in the office as much as they do at home. As we discussed in the aforementioned blog, it’s called “Presenteeism” where people feel the need to prove they are working by signaling they are present.
So coming in early or staying late, doesn’t necessarily mean you produced more, but managers (likely ones similar to Musk) associate that with a good work ethic. The same is true digitally when people move their mouses around to signal they are available or show up for meetings they don’t need to be in.
Companies need to decide what production is worth in volume and quality rather than in time. If someone can fill your empty role for $75,000 per year, but get the work needed done in 30 hours, let them do it. It’s worth $75,000 per year, not 2,080 hours a year. They don’t owe you the time, they owe you the work.
Giving people the flexibility to produce value for you is a drastic switch from what the workplace is used to. There’s always some bean-counter asking you to quantify your value and your work into hours. Okay but that means you think my work is worth less if I spend less time on it… which makes no sense. Yet if I spend months on it, I’m lollygagging and wasting company money.
Consumers are putting companies in no win situations with their culture wars. Employers are putting their workers in no-win situations with their rigidity for in-office and constant work day presence.
Take 30 minutes and listen to how Chris Do breaks down the value of a job. It really is simple, disciplined, logical, and profound. This is the change the economy and work force really needs.
We need to get back into a mode of cooperation with our focus on the future, not the past. Driving into an expensive office, wasting an hour commuting each day, stressing out about not being there longer… people are done with it.
The economy contracts until the players in it learn to work together and come to terms.
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