Above the Fold

Could Labor Shortages Drive Paychecks Higher?

American businesses continue to struggle to find workers. The economic turnaround has swung the pendulum the other way for business owners and employees. This time last year, workers were being scaled back or laid off. Today, companies of all shapes and sizes are having to turn away customers as they simply can’t keep up with demand. 

The pandemic made many workers rethink their hierarchy of values. Many of those close to retirement took the plunge to leave the workforce, while other 9 to 5 workers in major metro areas relocated to find a better life for them and their families. The pandemic has reshaped how America works and while additional unemployment benefits may be keeping a fair number of would-be workers on the sidelines, employers need to come up with a solution to gain quality employees. The simplest solution could be to raise wages; and that might not be a bad thing (so long as it doesn’t prohibit profitability). 

Median household income has been rising sharply over the last six years and currently stands at $78,500. Wage increases have been creeping up, and accelerating over the same time frame, but there are still gaps on the lower-end of the earnings scale. The biggest earnings increases do tend to come at the top end. Perhaps the unnatural economic forces of the pandemic will offer a boost for lower-income workers. 

Three Things 

1. Are You Feeling the Chip Crunch? – With the global chip shortage continuing to worsen, the Wall Street Journal is reporting rising technology costs across the board. Low-cost mobile devices, PCs and even peripherals like printers have experienced price hikes of 20% or more over the last 12 months. With the price index of the top 20 microcontrollers up 15% since last June, corporate leaders from Dell, HP and others are having to ratchet up retail prices on these lower margin devices. Market experts see continued upward price pressure in the short term. 
2. American Airlines Cancels Hundreds of Flights – Apparently weather isn’t the only trigger for flight cancellations. American Airlines cut about 1% of its flights through mid-July because it simply doesn’t have the workforce to handle the onslaught of consumer demand. Weather and crew logistics were a factor according to American Airlines spokeswoman Sarah Jantz. The company is not alone, as the country’s labor market remains extremely tight, and supply chains are still not operating at pre-pandemic levels. 
3. Elon’s Tunnel Vision – The man who seeks to dominate electric vehicles, green energy and space also has an underground vision. Musk heads a tunnel-drilling company, cleverly called “the Boring Co.,” launched in 2016. Though initially focused on passenger transport to ease traffic, his company is now pitching larger tunnels, 21 feet in diameter (enough for two shipping containers side-by-side), that would be used to move freight, according to Bloomberg. 

Did You Know? 

Flying Facts

With long lines and millions of travelers returning to airports around the world, you might find it ironic that less than 20% of the world’s population has ever flown at all. And when you do take that flight, be sure to hydrate, as many aircraft cabins are kept at less than 20% humidity, which is drier than the Sahara desert.