Hello and welcome to another episode of the Working Conversations podcast where we talk all things leadership, business, communication and trends in organizational life. I'm your host. Dr, Janel Anderson.

I have to tell you, and this is going to be a little bit of a rant. I am sick and tired of hearing people complain that no one wants to work anymore. It is a tired refrain that pops up everywhere from social media rants to casual conversations. Well, today we're setting the record straight. In this episode, we're diving deep into the realities behind these complaints, exploring the real reasons for the labor shortage and debunking the myths about work ethic and job market dynamics. So buckle up, because we are about to uncover the truth and bust some myths.

All right. Now, I'm sure you know the scenario. You're at a restaurant and the service is a bit slow, or maybe you're trying to get customer support and it's taking forever. You're on hold for what feels like too long, or you're in a big box store and you can't find anyone working in any of the aisles near where you are, where you need some help. What's the reaction from some people? No one wants to work these days, or young people just don't want to work.

I am so, so irritated with that complaint, because with the young people that I talk to, that is simply not true, and the data about the labor market says that it's not true either. So let's dig a little deeper in and do some myth busting and see what's really going on.

First of all, we have to understand the labor shortage when we put first things first. We need to give some context around this. Now we are experiencing a significant labor shortage right now in the US, talent scarcity is on the rise as of 2024 the US labor shortage currently sits at 70% which is 5% below the global average. What that means is that seven in 10 employers are unable to find suitable employees for their vacancies. That is a big deal. 70% of employers are unable to find relevant workers with the right set of skills. And it's not just a post pandemic phenomenon.

Now labor markets are a little bit looser than they were at the end of 2020 when things were really, really tight. Nonetheless, they are still historically tight and signs that labor demand was exceeding labor supply existed even prior to the Covid 19 pandemic. So this is something that's been a long time coming. 2017-2018 we were already feeling it, and then, of course, into the pandemic. It got even worse. So this issue has been brewing for a while now.

Let's look at some numbers. Just recently, the unemployment rate ticked up to 4% in May 2024, from 3.9% in April 2024, according to to the jobs report that was just released on June 7 by the Bureau of Labor Statistics now the unemployment rate had been lower than 4% since February of 2020, and job gains were well above projections in May, with a total coming in at 272,000 so it's clear that the labor market dynamic, of course, is evolving.

So it's clear, of course, that the labor market is dynamic and it is evolving. But from 3.9 to 4% it's pretty minuscule, and even a 4% unemployment rate is historically low, even if it did tick up by that tiny amount these last couple months. And again, that all ties back to the labor shortage.

So why do we even have a labor shortage? What's driving this shortage? Well, there are several factors at play here. Of course, part of it does come back to the pandemic, and there are some aftershocks. So the Covid 19 pandemic reshaped the labor market in ways we could never have predicted, very unprecedented ways. Many workers were laid off or furloughed, and entire industries had to shut down for a while, and as the economy began to recover, the labor market just didn't bounce back.

Uniformly, many workers reevaluated their career choices in light of a life threatening global pandemic, and they also looked at their work life balance and their overall priorities. And it's not that they necessarily chose to not come back to work, but they chose to maybe do other things, maybe they started their own business, or maybe childcare was a problem in their family, until they stayed home to raise children for a bit and then we're coming back into the workforce.

So the pandemic did have something to do with it, but again, it's really important to remember that this was brewing well before the pandemic, and a lot of it has to do with demographic shifts.

So the baby boomer generation is retiring in droves, and they have been predicted to retire for decades. But first the recession of 2008 2009 had them not retire, and then the pandemic had not had them not retire, and now they are finally starting to retire. So combination of the post pandemic issues that I was just mentioning, plus baby boomers, who were and have historically been the largest segment of the workforce for a really long time, are retiring. So this wave of retirements is contributing to that shrinking labor pool, and then there are fewer younger workers entering the workforce, so that's resulting in a significant gap to fill.

Now it's not that there are fewer workers entering the workforce because they don't want to work. It's that there are fewer younger workers entering the workforce because there are fewer younger people, there are fewer younger Americans, and by and large, humans on the planet. So go take a listen to episode 93 the labor shortage and what it means for you and your burrito, where I explain the precipitous drop in the birth rate in the United States over the past 17 years and what it means for the labor market. Now we'll link that up in the show notes, but just let me remind you that there is this precipitous drop in the population in the United States.

The birth rate has been dropping since 2007 and so that means there are just far, far fewer young people to enter the workforce, whether that be at t as teenagers in fast food and quick food restaurants, or, you know, to make, as I talked in Episode 93 to make your burrito at Chipotle. There just are fewer of them. And it's not that they don't want to work again. All the young people that I talk to are scrambling for jobs. There's fierce competition for those jobs amongst the young people. They want them. They want to work. They want spending money, all right?

Well, another factor, though, is a skill mismatch, and there is a growing disconnect between the skills that employers need and the skills that workers possess. So part of that has to do with technological advancements and the rapid evolution of certain industries, because they have outpaced the workforce's ability to adapt, respond, and skill up, and there are a number of government initiatives that are underway to try to upskill workers and get workers who want jobs or who want to do job transitions and career changes into the right skills that will make them suitable candidates for those jobs.

Now let's look at the real story behind the complaints. Let's address those common complaints about customer service and this perception that no one wants to work again.

It's not that people don't want to work, it's that they're looking for better opportunities and work environments that meet their needs, and of course, the labor shortage.

Now remember the great resignation many workers left jobs that didn't offer satisfactory conditions, and they were seeking more work life balance, higher wages, improved working conditions. A report by McKinsey and Company found that 40% of workers considered quitting their jobs in 2023 people aren't lazy. They're just valuing their time and well being more than ever, and they're looking for the absolute right organization and right role to plug their skills into so that they can feel that they are the contribution that they want to be, and that they have that work life balance that's going to make them a well rounded human.

Now let's also talk about remote work and telework, because that plays into this as well. So the pandemic normalized remote work for many employees. Many employees wanted that remote work opportunity, that opportunity to telework, but their organizations just didn't support it. A Gallup poll found that 54% of remote capable employees prefer a hybrid work arrangement. So yes, they want to work from home a good chunk of the time. They don't mind going into the office once in a while, that's the hybrid work arrangement. Yet not all employers are accommodating this preference, and employers are starting to demand that workers come back into the office. And So flexibility is no longer necessarily a perk. It's becoming a standard expectation of the labor market. So employers need to be wise to that and find ways to make flexible work arrangements work for them.

Now we also have to address wage stagnation and care responsibilities, because that's a big piece of it here in the US as well wage stagnation. So despite rising costs of living and the tremendous inflation we've been experiencing over the past couple of years, wage growth has not kept pace for many low and middle income workers. This wage stagnation has decentivized participation in certain sectors of the economy. And again, I don't think it's necessarily that people don't want to work. It's they can't afford to work and have their children in child care, so people are not willing to work for wages that don't support a decent standard of living or support them getting the care for the rest of their family.

So again, let's dig a little bit deeper into the child challenges of both child care and elder care. The lack of affordable options has forced many individuals, particularly women, out of the workforce. The National Women's Law Center reported that over 1.4 million fewer women were in the labor force in 2023 compared to pre pandemic levels. Now these aren't people who don't want to work. They're people who are unable to work due to systematic issues. If it costs more to have your children in child care than you're earning in your job.

Then, of course, it makes economic sense to stay home with those kids, at least until they're school aged, and then think about reentering the workforce. Now, we can't leave this topic without talking about the role of immigration. So stricter immigration policies have also contributed to the labor shortage here in the US, many industries, especially agriculture, manufacturing and hospitality, rely heavily on immigrant workers, and without these workers, there simply aren't enough people to fill all the job vacancies.

Now what's ironic is some of the same people that I hear complaining that no one wants to work also want a closed border policy in the US to limit immigration. You know, who really wants to work? Immigrants coming to the United States to build a better life. So clearly, the people who are complaining that no one wants to work don't understand the importance of immigrant labor and how it helps us all.

Enough said. Now I did mention at the beginning of this episode that might be a bit of a rant. Okay, yes. Now there's also some misconceptions about work ethic, and it's important to address the generational stereotypes that contribute to these misconceptions.

Younger generations, such as millennials and Gen Z are often depicted as lazy or entitled, but research shows that they value meaningful work flexibility and fair compensate and fair compensation, a Deloitte study found that 75% of millennials would consider taking a pay cut to work in an environmentally responsible company. These values reflect a shift in what work means to people, and it's not a matter of a work ethic. It is that idea of finding meaningful work that fits one's life.

So the employers also have a role to play here. They need to adapt to the changing expectations of the workforce, and this includes offering competitive wages, flexible work arrangements and opportunities for career growth. Companies must invest in training and development programs to bridge that skill gap. I was talking about earlier, partnerships with educational institutions and government initiatives can absolutely help reskill and upskill the workforce to fit these new jobs that just, quite frankly, didn't exist 510, years ago.

Now, on the policy front supporting care, infrastructure, child care, and in fact, there's a big Child Care incentive and financial package that has just run out over the last year or two for most states that the federal government was offering, and some states like Minnesota and Massachusetts have stepped up and filled that gap, where they're offering incentive money to childcare operations to stay open and not close their doors, Because the need for child care is so strong, so government policies that provide affordable child care and elder care can really bring more people into the workforce, since those folks wouldn't have to stay home, and that caregiving responsibilities, then and minimum wage increases and supporting collective bargaining can also ensure fair compensation for workers.

So there's definitely some policy things we can do, and then embracing technology is another solution. Automation can fill some of the gaps. Of course, it still can't make your customized burrito perfectly every time. So it should complement, rather than replace, human workers. Emphasizing human centered technology that augments worker capabilities can lead to more productive and satisfying work environments for everybody.

All right, I'll take a deep breath here. Now I know that this was a bit of a rant, but this is something that really gets under my skin, when ill informed people are complaining that people don't want to work, and that's really not the case. So I hope this episode has helped dispel some myths, and I hope it encourages a more informed dialog about the current state of the labor market.

So the next time you hear someone say, no one wants to work, or young people don't have a good work, you know that there's a lot more to this, and I hope you help fill in the gaps. The labor shortage is a complex issue, and it's influenced by demographic shifts, wage stagnation, childcare challenges, and the evolving value of values that workers have. So it's not a lack of work ethic. It's about finding the right fit in a rapidly changing world.

Remember, my friends, the future of work is not only about technology. It's about the values we uphold, the communities we build, and the sustainable growth that we all strive for. We need to keep exploring, keep innovating, and keep envisioning the truly remarkable possibilities that lie ahead. As always, my friends, stay curious, stay informed and stay ahead of the curve.

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