Closed for Business

By Ian Aikens | September 7, 2019

Did you see the article in the news about Faro Italian Grille, a popular eating spot in Laconia, closing early this summer for lack of workers? (See References below).

While the current low unemployment rate (if you can believe the government’s figures) is good news for those in need of a job, the other side of the coin is the current economic situation is creating havoc with businesses trying to survive. What caused this dilemma and what could be done to alleviate it?

The most obvious factor is the lack of foreign workers due to the ever-increasing crackdown and curtailment of immigrants into this country. Regardless of how one feels about legal and illegal immigration, the unavoidable fact is that American businesses need foreign labor to survive. The US economy has 7.6 million jobs open but only 6.5 million people looking for work. (The subject of work force participation and the growing number of folks dependent on government programs is a whole other subject that I may delve into at some point in the future).

Since the Department of Labor began tracking job turnover 20 years ago, this is the first time the pendulum has swung this way—and the gap is growing each month. Interestingly, while it’s common knowledge that employers have been short on workers in the science and technology field for years, the labor shortage has now crept down to blue-collar jobs like healthcare aides, restaurant workers, and hotel staff. Rather than the oft-heard proclamation that immigrants are “taking jobs away from Americans,” the reality is there simply aren’t enough native-born Americans to (willingly) do those jobs to keep the economy moving along smoothly. In the various hearings I attended in Concord this year, an oft-repeated complaint I heard was healthcare facilities in dire need of workers. “Who will take care of our old folks?” was a common theme.

Speaking of old folks, a huge part of the problem is the changing demographics of American society. Baby boomers, those who were born from 1946-1964 and about 80 million strong in the US, are retiring en masse these days. According to the AARP, 10,000 baby boomers are turning 65 every single day (that’s nearly 7 every single minute), and some sparsely populated states have a very high concentration of them. Maine has the most at 36.8%, and New Hampshire is a close second. While 65% of baby boomers plan to work past age 65, it turns out that 60% of retired workers had to stop working earlier than planned due to layoffs and health issues. In addition to the growing number of folks on the older end, families are having less kids these days, which means fewer young people in the future to do the work.

Another factor that comes into play here is students staying in school longer these days and entering the workforce later. According to the National Center for Education Statistics, the number of “kids” enrolled in post-secondary degree-granting institutions increased by more than 52% between 1990 and 2014. When you look at college dropout statistics, this is a terrible trend: one-third of college students drop out entirely, and more than half enrolled take more than 6 years to graduate. Furthermore, 28% of students drop out before they even become a sophomore. At community colleges, it’s even worse with 43% of students dropping out with no degree. This is often due to the majority of students taking remedial classes for what they were supposed to learn in high school. This trend of staying in school longer and longer and extending childhood doesn’t bode well. No wonder one hears so much these days about college students turning into snowflakes and “triggered” simply by viewpoints different than their own.

Back in California, I rented out a room to a graduate student who at age 30 had never worked at a regular job for even one day in her entire life—and she was still going to school. (I often remarked to others that by the time she’s done with all her studies and is ready to get a job, it will be time to retire already.) A friend of mine who hails from Europe once told me that it’s not unusual in Europe for “kids” to study until their mid-20’s and then go to work. With more and more calls lately for “free college” to beckon young people to stay in school longer when staggering numbers of them—those who actually finish college—end up taking menial jobs not even in their fields of study, this makes no sense. Especially when there are already plenty of jobs that need to be filled. Granted, they may not be glamourous jobs, but there’s still something valuable about independence, practical work experience, being out of the ivory tower, and growing up, even in 2019.

So, back to the original problem for businesses like Faro’s, where do we go from here? While “open borders” are hardly feasible in the current political environment, how about something like the Bracero Program, which was established by President Roosevelt by executive order (unlike his infamous Executive Order 9066 which directed the internment of 120,000 Japanese-Americans) in 1942 and lasted through 1964? It allowed nearly 5 million Mexican citizens to enter the US legally and temporarily work on farms and railroads, and in factories, while many young Americans were overseas in the military in WWII. Like any government program, it had its share of bureaucratic problems, but it did serve the useful function of bringing in workers that were desperately needed—and giving people living south of the border an opportunity to earn a better living here. (Some call this exploitation, but you have to compare the working opportunities in Mexico versus what they faced in the US—if it was that much worse here facing “exploitation” and discrimination, why did they choose voluntarily to come north?)

Hilariously, while researching this article, I ran into another government program that definitely did not pan out. It was established in 1965 shortly after the Bracero Program ended, when American farmers complained to the government that the Mexican workers had performed jobs that Americans refused to do and their crops would rot in the fields without them. Leave it to a government bureaucrat to come up with a real zinger: called the A-TEAM, which stood for Athletes in Temporary Employment as Agricultural Manpower, its grand plan was to recruit 20,000 American high school male athletes to work on farms in California and Texas during summer harvest seasons. The end result: fewer than 3,500 of the A-TEAM signed up for work, and many of them soon quit or went on strike complaining of the back-breaking work, oppressive heat, low pay, and poor working conditions. Needless to say, the zinger was zapped after the first summer. Moral of the story: US businesses need foreign workers to do a lot of the lesser jobs that native-born Americans simply will not do.

As to the more recent trend of extending childhood well into what used to be adulthood, that’s a trend worth reversing. Of course, if students themselves, their families, their donors, and their banks are willing to pay the costs, no problem, but not at the public trough. The only real benefactors of sticking it to the taxpayers are the institutions that charge more with the additional “free” tuition money floating around, and of course all the bureaucrats who feed on the largesse. One good suggestion I ran into was for employers in the real world (voluntary economy) to reduce educational requirements and increase internal on-the-job training. If they can’t get more foreign workers in here to help out, that’s just what they might be forced to do anyway.

More foreign workers, fewer useless degrees, more real-world working experience—that might help businesses like Faro’s in the future, but too late for this season.

References:

Drapcho, Adam (Laconia Daily Sun). (2019, August 1). Weirs Restaurant Closes for Lack of Workers. Retrieved from www.laconiadailysun.com/news/local/weirs-restaurant-closes-for-lack-of-workers

Faro Italian Grille. (2019). Faro Italian Grille. Retrieved from www.faroitaliangrille.com/