More or Less (Craig Douglass On Consumers)

Perhaps we should have headlined this opinion piece “More With Less.” When it comes to staffing service industries, is that what’s happening, doing more with less? Or is it doing less with less?

Productivity — that’s doing more with less: increasing economic output with fewer hours dedicated to the task. One way to measure pandemic-related productivity — and “pandemic-related” is the reality of the times in which we live — was included in a recent New York Times article about the “pandemic productivity boom.” The Aug. 10 article stated, “Since the pandemic recession bottomed out in the spring of 2020, the nation’s gross domestic product has more than fully recovered, with second-quarter output 0.8% higher than before coronavirus. The number of jobs decreased 4.4% in the same span. Productivity growth accounts for most of the wedge between those.”

There are examples of the changing workplace during our economic recovery, a recovery that is now in jeopardy due to those who have chosen not to get vaccinated. From restaurant wait staff to hotel cleaning crews to sanitation workers, the previously employed who left these types of jobs during the initial phases of the pandemic are not returning in like numbers.

It could be argued that service-related jobs have relatively low productivity, while jobs in sectors that include greater technology or automation are high productivity, outputting more work with fewer people. And high productivity jobs pay more. For instance, as the Times story pointed out, manufacturing jobs assisted through automation paid an average of $28.23 an hour, while restaurant jobs paid on average $15.23. These are pre-pandemic numbers.

Those who are now returning to work are either looking for better-paying jobs or returning to similar jobs previously held but negotiating for higher salaries and better benefits. It’s a seller’s market.

Job openings continue to surge. The most recent measurement showed that available jobs increased from 9.5 million in June to 10.1 million in July. “Now Hiring” signs are common in business storefronts and on employment websites, including hiring seeking to fill lower-wage, low-productivity, service-sector jobs.

A government report aptly named JOLTS, the Job Opening & Labor Statistics Survey, noted that professional and business services have the most job openings, followed by retail, restaurants and bars.

Not only are there job openings but many employees have quit their jobs, mostly in retail, restaurants and other hospitality segments. As Business Insider posits, “The increase in quits suggests workers are confident of finding jobs elsewhere and are possibly exploring new sectors as economic recovery continues.”

What’s a business in need of workers to do? Well, what some are doing involves what attracts workers’ attention first, and that’s wages. Higher wages to be exact. For example, hospitality jobs have seen two dramatic increases: an increase in those leaving the industry and an increase in wages being offered to those who will come back to the industry. In fact, according to the Washington Post, since March 2020, weekly salaries in hospitality — restaurants, leisure and lodging — have increased over 25%. That’s the highest bump up in over two decades.

Jolts and surges. There are plenty of them, economically speaking. Surges in job vacancies. Surges in wages to fill those vacancies. But also a surge in the delta variant of the COVID-19 virus. That particular surge could alter the current trends in overall economic recovery, some good, some bad.

If the virus variant materially restricts economic activity for businesses relying on in-person participation — from audiences on Broadway to revelers on Beale Street — the economic recovery as we know it will be kaput. And fundamental changes in the way offices are run and business is conducted will accelerate — a normal not new but heretofore unknown.

Developing technologies and innovations are sure to continue their acceleration, too, to fill the gap. Consumer experiences will become re-isolated, remote, one-on-one, rather than congregant. Screens and clicks. Streams and picks.

One in-person experience that needs to see renewed acceleration is vaccinations. And that would change what’s coming next. More or less.

Craig Douglass is the executive director of the Regional Recycling & Waste Reduction District.