Why don't people want to work?

 

This is a question that business owners and economists have been asking for a while now. Starting in May of 2020, the Census Bureau has conducted a monthly Household Pulse Survey in which they ask that very question.

 

At first, the answers were on track with what was expected. A significant plurality of people cited layoffs and furloughs due to the pandemic. But then something unexpected occurred:. Societal forces previously unseen started to emerge.

 

The first unpredicted finding was a surge in retirements – many due to the very real threat of the coronavirus weighed against the value that older Americans placed on their jobs. As it turned out, many of them did not regard their jobs or the income they generated as much as they valued their health and the health of their loved ones.

“I think many economists and forecasters in 2021 continually predicted that, this month, people would suddenly explode back into the labor force, whether it’s because of vaccines, or the summer, or schools reopening,” Glassdoor’s Zhao said. “That just fundamentally has not happened.”

 

A confluence of events, some as a result of the pandemic, played a big role in the jump in retirements. With the stock market doing well for many years, retirement accounts have done extremely well. Additionally, home values have risen dramatically, resulting in piles of equity just sitting there waiting to be capitalized on. Add to that the realization, due to the pandemic, that perhaps it’s better to enjoy life right now then to wait any longer. Also, many of these older workers had known nothing about remote work – and suddenly realized not only was it possible, but it provided a simplified and low-cost work-from-home option. If they had to quit their current job to do it, it was seen as well worth it.

 

A Washington Post analysis found that over 1.5 million more people retired in November 2021 than would have been expected based on pre-pandemic trends. Employment has actually declined in the last year among workers who were 55 or older at the start of the pandemic.

More and more young people have been entering the workforce, especially those ages 16 to 24 since the pandemic started. However, their numbers are insufficient to counter-balance the loss of the older workers.

One thing that has resulted in this shift is that the aging of the workforce has slowed. Not only that, but with the big drop in baby boomers in the workplace, the dynamics will also change This will be a challenge to employers who have relied on the work ethic of their older workers, as well as the attitude these workers had toward their jobs and their loyalty to their employers.

 

According to a recent article in the Washington Post “Retirement isn’t the only force in the worker shortage. The Pulse survey points to other reasons — child-care, a simple desire not to work — but the most powerful after retirement is also the most mysterious: “other.”

 

Nobody knows what “other” refers to, or how long it might endure. Some economists argue that the government benefits that helped fuel consumer spending also enabled more Americans to be pickier about when to return to work. Now that those benefits have ended, more Americans may seek out work.

 

But it will be hard to catch up. The pool of potential workers has shrunk so much that getting back to the number of people employed before the pandemic would require unprecedented success in connecting job seekers and employers.

 

Assuming more people don’t start looking for work, it would require an unemployment rate of 2 percent, lower than at any point since measurement began in 1948 [to catch up]".

 

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