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July 8, 2021 | Work for What?

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

Tony is a self-taught but respected carpenter. “Cabinetry,” he says. “I love building that stuff.” For the last five years he’s been imparting skills and smarts to his twentysomething live-at-home spawn, Ben. I know these guys, as they’ve worked on a couple of my endless reno projects.

When CERB came last year it meant $4,000 a month, no tax, coming into their household. That was too rich to pass up, and more than enough to pay the bills for a while. So they quit. Instead of being employed by the small-time contractor they’d been with, Tony and Ben started working piecemeal, for cash.

As noted here, Canada has been more generous than any other G7 nation during Covid. It’s why we have a $354 billion annual deficit and a bloating debt. We gave billions to people who lost work, or felt unsafe going to a job. We paid families more for having kids. Seniors got extra in OAS. Companies received rent subsidies, payroll subsidies and big loans that did not need to be paid back in full. The cash gush continues. Worker support payments have been extended to the autumn of 2021. Meanwhile everybody working from home for a tax break this year.

The question looms. What the hell have we done to the work ethic?

Now that the herd is achieving immunity, the health crisis is ending fast and the reopening is everywhere, there are indications the pandemic + government profligacy = a labour crisis. For example, a third of companies in the food/hospitality business are desperate for staff as indoor dining comes back.

Canada doesn’t have great stats, but the Yanks do. These days there are 9.21 million jobs available, unfilled and going begging in America. In May alone 3.6 million people quit their employment. Already the unemployment rate in the States has dropped close to pre-pandemic levels, and the economy is not even close to being in high gear again. Labour shortages are expected to be the biggest single challenge companies will face during the rest of 2021 and into next year.

Over 9 million more jobs than workers in US


Source: Bloomberg

US workers received $300 a week to stay home, but those benefits are ending in most states. New jobless claims have dropped by half since the beginning of the year and the jobless rate nationally is on its way to the 4% range by the fourth quarter. That’s considered to be essentially full employment – when everybody who actually wants to work can walk into a paycheque.

So the problem is not with the economy. It’s with attitudes. And things seem to be worsening.

In Canada the CERB payments, then enhanced EI benefits, have been big competition to minimum-wage jobs. So bars, eateries, clubs and retailers – traditional providers of entry-level employment – are desperate for workers.

The WFH pandemic phenomenon changed minds and behaviours. Surveys show up to 80% of people out of the workplace for a year and a half never want to return. They like the big cost savings of no commute, and they’re addicted to a more indy work-life balance routine. The most militant anti-office WFHers are women and those under 40.

This could be a big problem for major employers who just want to get back to pre-pandemic normality. But it’s also a social catharsis. Suddenly young workers are asking why they should worry about a career path at all when technology, AI, blockchain, DeFi, crypto and the Internet of everything are changing… everything. It’s a gig economy now. Longevity is so 1980s. Employees have no loyalty since they feel utterly disposable.

Besides, what’s the goal? Nobody outside of government gets a decent pension anymore. And crap houses in Toronto or Vancouver cost so much that you need impossible savings of five hundred thousand and the ability to swallow at least a million in debt. How is that a viable life strategy, especially if you want a spouse or kids?

This is where FOMO turns to YOLO. The pandemic, many people say, has shown them that life has more to offer than a career. ‘You only live once’ has been underscored not only by the deaths from virus of 26,000 people but also by the unshackling from routine that this pathogen brought. Suddenly it seems experience is more important than stuff, especially if those material things (like real estate) involve unrepayable debt and the surrendering of personal freedom.

This blog has said the world will likely revert to the way it was. Downtowns repopulated. Highways full. Workplaces bustling. Stores, malls and cities restored. That’s still the likely outcome. Covid didn’t change everything. But it changed enough.

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July 8th, 2021

Posted In: The Greater Fool

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