While the COVID pandemic has provided swings in demand throwing the supply chain out of balance, it also ushered in this labor issues which have made the post-pandemic recovery much more difficult. And this difficulty is expected to continue as it is expected that employee shortages will be a long term situation.
There are a number of reasons for the labor shortage. An article in the Wall Street Journal (link below) and other sources provide insights including these:
- COVID vaccination status - many employers have issued mandates for COVID vaccinations which has resulted in many deciding to leave rather than comply
- Mothers of with young children deciding to leave or needing to leave the workforce due to childcare. Childcare facilities are also facing a labor shortage and therefore have reduced capacity. In other cases, mothers have decided to forgo the extra wages they would have earned to stay at home and reduce their risk.
- Older people who had continued to work after retirement age have decided to fully retire. In some cases, that means taking early retirement. In other cases, forgoing extra income and making a go of it on their current retirement payments. Again, much of this may be related to avoiding the risk of becoming ill with the virus while working.
- For those willing to work, there are plenty of job openings giving people choices. And there are many who have decided they want more out of their job...whether that be higher wages, better working hours, better working conditions, or a little of each. Some are sitting it out waiting for the right opportunity, living off current savings while they search. And with numerous openings, some people are job jumping, perhaps with the notion of prolonging unemployment benefits.
- Absenteeism is also high. A NAMI executive reports meat companies being challenged with 20% absenteeism of 20% on any given day. I spoke with one retailer who stated they are forced to live with call offs - either take people when you can get them or force people who are present to work longer hours.
An article in the National Law Review discusses the use of immigration as a solution. Having multitudes of people crossing the boarder will do little for jobs requiring some level of expertise, but perhaps by working on easing Visa restrictions, companies can pull in talent from areas where there are excess skilled workers.
Clearly this all then represents a challenge for food safety - from being flexible to changes in the supply chain, to ensuring enough trained people are present to ensure safe production. Companies will need to adapt their operations because there does not appear to be getting any better in the short term. investments in technology and/or making changes to HR strategies will be areas of focus. It is hard to run full speed when a company has an insufficient number of skill workers to properly operate.
Food Processing Magazine
https://www.foodprocessing.com/articles/2021/end-flap-supply-chain
Opinion: The Supply Chain as Scapegoat
The pandemic didn’t cause problems with the supply chain; it exposed them.
By Pan Demetrakakes, Senior Editor
Oct 25, 2021
The supply chain” has been getting a lot of blame lately.
It has taken the fall for everything from steel not getting to equipment manufacturers to cheese puffs not getting onto store shelves. The phrase “supply chain issues” gets more than 9.7 million Google hits. If you listen to any food company CEO speaking with stock analysts, you are almost certain to hear a reference to supply chain issues – especially if his or her company’s results were less than stellar.
But what does “supply chain issues” – or even the entire concept of “the supply chain” – mean, exactly?
In a provocative essay in the Oct. 4 issue of the New Yorker, Amy Davidson Sorkin argues that blaming the supply chain has become almost a copout: “Referring to supply-chain issues...can be a useful shorthand when a problem arises, but it’s an insufficient one.” In other words, almost every so-called “supply chain issue” has a fundamental root cause.
That root cause is usually labor. As Davidson Sorkin says in her essay: “What’s often at the heart of a supply-chain issue is a labor issue.”
Think about it. The supplies from overseas, of stainless steel, computer chips and everything else needed to make processing and packaging machinery that are languishing on overseas freighters – it’s because there aren’t enough people to staff the ports. The ingredients that aren’t making it to the processing plants – there aren’t enough workers in the plants that process the ingredients. The products from those plants aren’t making it onto store shelves for the same reason. And of course, everything is exacerbated by a lack of truck drivers.
Now, the overwhelming temptation is to blame all the world’s supply chain problems on the pandemic. And it’s true that many of the problems we’re seeing came about during the height of a pandemic that is, regrettably, not over yet. But it’s also true that many of those problems were not so much caused by the pandemic as exposed by them.
It’s always been tough to get people to drive long-haul trucks or to work in a dank, freezing-cold plant, slicing up hog carcasses. The pandemic simply intensified that problem. It did so, first by making enough workers sick so that the pressure on the remaining ones ratcheted up, then by giving them enough options – through other jobs or heightened unemployment benefits – that they had time to at least rethink their current job trajectories.
Perhaps the purest form of using the pandemic and the “supply chain” to mask labor problems can be seen in the United Kingdom, where supermarket shelves are beginning to go bare and stores are warning that consumers may not be able to find everything for a traditional Christmas meal. Things are so bad over there that the meat industry is calling for prisoners to be recruited from behind bars to work in meat processing plants.
Rest of article (https://www.foodprocessing.com/articles/2021/end-flap-supply-chain)
But what does “supply chain issues” – or even the entire concept of “the supply chain” – mean, exactly?
In a provocative essay in the Oct. 4 issue of the New Yorker, Amy Davidson Sorkin argues that blaming the supply chain has become almost a copout: “Referring to supply-chain issues...can be a useful shorthand when a problem arises, but it’s an insufficient one.” In other words, almost every so-called “supply chain issue” has a fundamental root cause.
That root cause is usually labor. As Davidson Sorkin says in her essay: “What’s often at the heart of a supply-chain issue is a labor issue.”
Think about it. The supplies from overseas, of stainless steel, computer chips and everything else needed to make processing and packaging machinery that are languishing on overseas freighters – it’s because there aren’t enough people to staff the ports. The ingredients that aren’t making it to the processing plants – there aren’t enough workers in the plants that process the ingredients. The products from those plants aren’t making it onto store shelves for the same reason. And of course, everything is exacerbated by a lack of truck drivers.
Now, the overwhelming temptation is to blame all the world’s supply chain problems on the pandemic. And it’s true that many of the problems we’re seeing came about during the height of a pandemic that is, regrettably, not over yet. But it’s also true that many of those problems were not so much caused by the pandemic as exposed by them.
It’s always been tough to get people to drive long-haul trucks or to work in a dank, freezing-cold plant, slicing up hog carcasses. The pandemic simply intensified that problem. It did so, first by making enough workers sick so that the pressure on the remaining ones ratcheted up, then by giving them enough options – through other jobs or heightened unemployment benefits – that they had time to at least rethink their current job trajectories.
Perhaps the purest form of using the pandemic and the “supply chain” to mask labor problems can be seen in the United Kingdom, where supermarket shelves are beginning to go bare and stores are warning that consumers may not be able to find everything for a traditional Christmas meal. Things are so bad over there that the meat industry is calling for prisoners to be recruited from behind bars to work in meat processing plants.
Rest of article (https://www.foodprocessing.com/articles/2021/end-flap-supply-chain)
Wall Street Journal
https://www.wsj.com/articles/labor-shortage-missing-workers-jobs-pay-raises-economy-11634224519
4.3 Million Workers Are Missing. Where Did They Go?
Many economists expect the shortage to last years, and some think it could be permanent
Scarce labor is becoming a fixture of the U.S. economy, reshaping the workforce and prodding firms to adapt by raising wages, reinventing services and investing in automation.
More than a year and a half into the pandemic, the U.S. is still missing around 4.3 million workers. That’s how much bigger the labor force would be if the participation rate—the share of the population 16 or older either working or looking for work—returned to its February 2020 level of 63.3%. In September, it stood at 61.6%.
The absence comes as U.S. employers are struggling to fill more than 10 million job openings and meet soaring consumer demand. In another sign of just how tight the labor market is, jobless claims—a proxy for layoffs across the U.S.—fell to 293,000 last week, the first time since the pandemic began that they fell below 300,000, the Labor Department said Thursday.
Workers are quitting at or near the highest rates on record in sectors such as manufacturing, retail, and trade, transportation and utilities, as well as professional and business services.
Participation has fallen broadly across demographic groups and career fields, but has dropped particularly fast among women, workers without a college degree and those in low-paying service industries such as hotels, restaurants and child care.
The participation rate experienced its biggest drop since at least World War II in the early months of the pandemic. It partly rebounded last summer and since then has hovered near the lowest level since the 1970s, despite sturdy economic growth and the strongest wage gains in years.
https://www.wsj.com/articles/labor-shortage-missing-workers-jobs-pay-raises-economy-11634224519
Wall Street Journal
WSJ - https://www.wsj.com/articles/where-did-all-the-workers-go-labor-shortage-biden-administration-11633725434
Where Did All the Workers Go?
Bidenomics has led to a labor shortage that is hurting the economy.
So what’s causing the worker shortage? One possible culprit is government and employer vaccine mandates that set ultimatums for workers. President Biden’s vaccine order first applied to nursing homes, which lost jobs in the month. Many states and school districts have also imposed mandates, and state and local education employment fell 161,000. The White House claims its vaccine mandates will boost job growth, but not if unvaccinated workers quit.
National Law Review
https://www.natlawreview.com/article/how-labor-shortage-impacting-supply-chain-would-immigration-reform-help
How the Labor Shortage is Impacting the Supply Chain: Would Immigration Reform Help?
Friday, October 29, 2021
As the COVID-19 pandemic continues to present challenges to the US economy, labor shortages are contributing to the ongoing supply chain disruptions facing many industries. Companies are finding it difficult to find the right candidates for the jobs they’re looking to fill while millions of Americans are quitting their jobs or threatening to strike or walking out for better working conditions.
One industry in particular affected by the labor shortages brought on by COVID-19 is the shipping and warehousing industry. At the Port of Los Angeles, for example, there aren’t enough workers to unload goods from ships, causing shipping delays across the US. Additionally, a shortage of truck drivers is contributing to the problem. Ninety percent of leaders who spoke to the U.S. Chamber of Commerce said labor shortages are impacting economic growth in some areas.
To help remedy the problem, President Joe Biden announced the Port of Los Angeles will be open 24/7, with logistics companies FedEx and UPS making similar pledges. Another potential solution is increasing immigration through offering more worker visas in order to bring in more workers to the country.
Difficulty Hiring During COVID-19: Labor & Visa Shortages
US Chamber of Commerce Chief Policy Officer Neil Bradley told CNN Business that immigration is one of the key ways to solve the labor shortage. However, despite immigration’s potential to add additional employees to the workforce, the number of immigrants US employers can hire has remained flat. Additionally, while there are options for workers with a high level of education, there aren’t as many visa options for employers needing seasonal or temporary worker visas or workers in many service industry roles.
The Chamber of Commerce requested Congress and the White House to double the cap on employment-based visas, specifically to double H-1B temporary worker visas and H-2B visas for seasonal workers.
“When we see these workforce gaps in the nonprofessional roles for instance, US companies are not typically able to turn to the US immigration system to help fill that need,” said Caroline Tang, immigration shareholder in the Austin office of Ogletree Deakins. “Across the board, there's just a tighter labor market now in terms of candidate availability, people willing to do certain types of work or wanting to come back to work in environments where they will be more physically closer to other people, which oftentimes are the roles that really heavily impact our supply chain.”
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