3 ms·

Labor Costs Will Explode After the Pandemic. Here's How

10 points by zt 6y ago

RcouF1uZ4gsC 6y ago
> While that might turn out to be true short-term, it ignores the lesson of history, which is that pandemics have always resulted in labor unrest--often to the point of armed insurrection. The pandemics (except for the 1918 flu) listed actually caused demographic collapse. It took over a hundred years for the populations to recover. I don’t think anyone thinks COVID-19 will cause anything like that. In addition, those pandemics killed a lot of young, previously healthy people, whereas with COVID-19, the mortality rate among young, previously healthy people is really low. These pandemics in the past caused a labor shortage by killing a large percentage of people in their prime. Again with the exception of 1918, the economy of the day depended heavily on manual labor, hence the labor shortage was felt more acutely. This is not the case now. I think the article is making superficial comparisons to reach a conclusion that is unwarranted.
- mywittyname 6y ago
  The flaw I see with your counter-argument is the assertion that people must die for the pandemic to have long-term effects. I don't necessarily agree. Covid19 does absolutely affect young people at high enough rates to cause a devastating labor shortage. They might survive, but if factories, militaries, and police forces suffer the temporary loss of 50% of their workers during the same six month period, that could be bad. Political groups could capitalize on the weakened state of the situation and permanently change society. We already have outbreaks at major food factories. These people may not be dying, but they aren't working and getting temporary workers is going to be difficult.
- giantg2 6y ago
  I'm not sure if I would agree or disagree with the conclusion. I could see it going either way. I do agree with you that the examples the author gives do not directly support the conclusion. The first two examples were essentially about taxation. Sure, the reason taxes went up was because people died and the rulers expected the same output, but that was a choice by greedy leaders forced upon people (in a power structure quite different from ours no less). The third example has little to do with the pandemic. I would argue (just as vaguely as the author has on their point) that the end of the war and other catalysts simulated the economy into the roaring twenties. That stimulated economy makes employers more likely to improve working conditions either because they are more financially viable or there is more demand for labor which gives laborers more power in negotiating.
csense 6y ago
The problem with unionizing and demanding better wages is that workers who do it will be replaced with cheaper alternatives, namely, overseas workers or robots. People on the street recognize this, at least the overseas workers part. It's a big reason why Trump was elected. Biden seems to have figured it out; he recently released a quite hawkish political ad accusing Trump of being too pro-China. Actually it's good if labor costs explode: That means ordinary people are earning more, and a robust middle class is essential for a healthy society. It might have painful consequences for quarterly P&L, but if the plebs can afford a nice middle class lifestyle, they're unlikely to storm the mansions with torches and pitchforks. If you own a company, you should read "exploding labor costs" as "pitchfork insurance."
- deleted 6y ago
  [deleted]

10 points by zt 6y ago

> While that might turn out to be true short-term, it ignores the lesson of history, which is that pandemics have always resulted in labor unrest--often to the point of armed insurrection. The pandemics (except for the 1918 flu) listed actually caused demographic collapse. It took over a hundred years for the populations to recover. I don’t think anyone thinks COVID-19 will cause anything like that. In addition, those pandemics killed a lot of young, previously healthy people, whereas with COVID-19, the mortality rate among young, previously healthy people is really low. These pandemics in the past caused a labor shortage by killing a large percentage of people in their prime. Again with the exception of 1918, the economy of the day depended heavily on manual labor, hence the labor shortage was felt more acutely. This is not the case now. I think the article is making superficial comparisons to reach a conclusion that is unwarranted.

mywittyname 6y ago
The flaw I see with your counter-argument is the assertion that people must die for the pandemic to have long-term effects. I don't necessarily agree. Covid19 does absolutely affect young people at high enough rates to cause a devastating labor shortage. They might survive, but if factories, militaries, and police forces suffer the temporary loss of 50% of their workers during the same six month period, that could be bad. Political groups could capitalize on the weakened state of the situation and permanently change society. We already have outbreaks at major food factories. These people may not be dying, but they aren't working and getting temporary workers is going to be difficult.
giantg2 6y ago
I'm not sure if I would agree or disagree with the conclusion. I could see it going either way. I do agree with you that the examples the author gives do not directly support the conclusion. The first two examples were essentially about taxation. Sure, the reason taxes went up was because people died and the rulers expected the same output, but that was a choice by greedy leaders forced upon people (in a power structure quite different from ours no less). The third example has little to do with the pandemic. I would argue (just as vaguely as the author has on their point) that the end of the war and other catalysts simulated the economy into the roaring twenties. That stimulated economy makes employers more likely to improve working conditions either because they are more financially viable or there is more demand for labor which gives laborers more power in negotiating.

csense 6y ago

The problem with unionizing and demanding better wages is that workers who do it will be replaced with cheaper alternatives, namely, overseas workers or robots. People on the street recognize this, at least the overseas workers part. It's a big reason why Trump was elected. Biden seems to have figured it out; he recently released a quite hawkish political ad accusing Trump of being too pro-China. Actually it's good if labor costs explode: That means ordinary people are earning more, and a robust middle class is essential for a healthy society. It might have painful consequences for quarterly P&L, but if the plebs can afford a nice middle class lifestyle, they're unlikely to storm the mansions with torches and pitchforks. If you own a company, you should read "exploding labor costs" as "pitchfork insurance."

deleted 6y ago
[deleted]