One of the first stories I covered in my reporting career was a “Norma Rae”-style labor action.
I was a reporter for a TV station in Meridian, Mississippi. I forget the name of the textile mill, but the workers wanted a little something better — higher wages and a few improvements in working conditions — and they were willing to go on strike if they had to.
Strikes were relatively common 30 or so years ago. They’ve become increasingly uncommon since.
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But we may be on the verge of a reversal in that trend.
That might be good news for anyone who cares about a fair wage — but it’s another signpost, along with rising interest rates, of inflation’s subtle return to the U.S. economy.
The Bureau of Labor Statistics keeps data on this kind of material. For “work stoppages” involving 1,000 or more workers, the high-water mark of recent decades was 1974, with 424 separate strike actions involving nearly 1.8 million workers.
Since then, strikes have fallen off rapidly thanks to a variety of reasons — foreign trade deals, immigration, demographics, union-busting legislation, fearful workers and a slow-growing U.S. economy.
But what’s fascinating is the rebound in work stoppages this year. With two months left to go in 2016 (the BLS hasn’t compiled November’s data yet), the U.S. has already experienced 13 strikes.
That’s already more than 2014 or 2015. And if the holiday period sees the usual flurry of striking actions (an average of five in November/December in each of the past four years), 2016 could go on the books as the biggest for work stoppages in a decade.
Is it the start of a trend? I think so … simply as an outgrowth in rising demand for higher wages and fewer options than we think available to U.S. employers.
Boomer Retirements = Higher Wages
For instance, in October, the Labor Department said wages rose at the fastest pace since June 2009.
Even the much maligned “U.S. labor workforce participation rate,” which had been on the downswing since 2008 (at roughly 66%), appears to have stopped going down. It hit a low of 62.4% late last year and spiked to 63% in March.
What’s driving all this? We all know about the baby-boom generation retiring in droves. Exactly how many leave the workforce each year is up for debate — the Social Security Administration says 10,000 boomers retire every day, but the Conference Board, an independent nonpartisan business organization that’s been around for a century now, says it’s a smaller number — perhaps 3,000 a day.
That still equates to 1.2 million people exiting the workforce each year.
In a recent report, the business research group says boomers are retiring and leaving behind their regular full-time positions faster than later generations — Gen X and Gen Y — can be bumped up the employment ladder to replace them.
The result is that labor shortages are emerging in a bunch of industries across the country … a sobering statistic when you think of the implications for wages and the potential impact on inflation.
According to the Conference Board, we’ll see ongoing labor shortages for the next 15 years.
Not many of those job groups can be automated, “roboticized” or computerized out of existence. According to the Conference Board’s research, the U.S. will see labor shortages among jobs as varied as…
- Rail transportation operators
- Health diagnosing and treatment practitioners
- Physical therapists
- Nursing, psychiatric and home health aides
- Plant and system operators
You’ve heard of the old cliché about “generals fighting the last war”? As we’ve warned before, it’s possible to make the same mistake when it comes to preserving your wealth.