The Great Awakening

The pandemic, labor shortages, and a supply chain debacle have opened our eyes to many subjects like immigration, wages, retirement, remote work, working conditions, and many other factors that impact our everyday lives. These major events have provided clarity around many of these issues and on this episode Andrew Flowers, Labor Economist with Appcast sits down with The Chad and Cheese to start digging into a wide variety of these issues.

Because at the center of all the economic banter is, TALENT!


Disability Solutions helps forward thinking employers create world class hiring and retention programs for people with disabilities.

INTRO (1s):

Hide your kids lock the doors. You're listening to HR is most dangerous podcast. Chad Sowash and Joel Cheeseman are here to punch the recruiting industry, right where it hurts complete with breaking news, brash opinion, and loads of snark buckle up boys and girls.

Joel (20s):

Oh yeah. What's up everybody. It's your favorite guilty pleasure. The Chad and cheese podcast I'm your cohost Joel Cheesman joined as always by my partner in crime Chad Sowash.

Chad (32s):


Joel (33s):

And today we're talking economics, everybody on the show. Andrew Flowers, Labor Economist from Appcast. Andrew, welcome to the show.

Andrew (46s):

Hey, thanks for having me. I'm excited to be here now.

Joel (48s):

You sound excited. Well, aside from labor economists, what should our listeners know about Andrew Flowers?

Andrew (55s):

Well, I am a dad, a husband, and a fan of a really, you know, a underdog football team, the New England Patriots.

Chad (1m 6s):

So, so your new QB is starting to come around. That was a hell of a lot quicker than I think anybody thought would actually happen. So you've gotta be happy as hell right now.

Andrew (1m 16s):

Yeah. It's going to be exciting. This offensive rookie of the year, Mack Jones, you know, pencil it in. It's a fun time here in new England and Massachusetts, but I'm not all play. I'm not all only just sports up. I do love talking about data and economics and all that nerdy stuff.

Chad (1m 37s):

Which is what we're going to do today. That's for sure.

Joel (1m 41s):

Our listeners need to know you're also a former Indeed employee, which we will not hold against you.

Chad (1m 45s):

But he got out.

Joel (1m 46s):

Yeah, he got out.

Chad (1m 48s):

Yeah, he did get out.

Andrew (1m 49s):

Yeah. And in former former Federal Reserve, 538 guy. So all the places that people sometimes love to hate on, but...

Chad (2m 1s):

Federal reserve and also ESPN. I mean, that shit just doesn't mix. How did that work? How did that happen?

Andrew (2m 9s):

It's a great question. I think Nate Silver, when he left the New York Times and started 538 under ESPN, was looking for some people who knew data. And the Fed is one spot where I was a trained. So I was excited to jump ship, because again, you know, while the Fed was great, I'm a sports fan.

Joel (2m 28s):

We only have top-notch guests on this show. I just want to add that.

Chad (2m 31s):

That's good. Shit. Let me tell you that. Well, top-notch, who can actually use that big brain to talk about the great resignation? Are we sick and tired of all these greats that are happening in the great resignation? The great reshuffling, the great retirement. What the hell is actually going on?

Joel (2m 49s):

Explain it to me, Andrew.

Chad (2m 53s):

4.4 million people quit last month, right? So can we break that down a little bit? I mean, this all seems, yeah.

Joel (3m 4s):

Break it down like you were at a cocktail party.

Andrew (3m 6s):

Yeah. It's quit-y right. The upside of giving up of it, of quitting. And we see just these quit rates, which is just the share of workers in a given month who voluntarily, you know, leave their job. These quit rates are at all-time highs at 3% for all employees across the board, but it's particularly high for workers in lower-wage industries. And COVID sensitive industries to think of like retail or restaurant works workers. You see quit rates above 6% in September. And so quitting is really at an all-time high. And it's a big contributor that this great resignation is a big contributor to the broader labor shortages that I know employers face, that recruiters face, but let's just dig in for a second on like, what is, what is it?

Andrew (3m 56s):

Because some people think, okay, resignation does that mean people are just giving up on work and moving to a commune to, you know, grow their own organic food and, you know, leave the workforce. No, when people quit by and large, they quit because they think the economy is strong and because they have another job lined up.

Chad (4m 18s):

Okay. Well also, and let's get into the psyche of workers, right? Because we've called them central. We have all these really minimum wage workers who we've gotten really, I think, into their psyche called them essential. Now they understand that they are essential for the supply chain, but yet they're not receiving essential wages. So do you think that because of, not just because of COVID, but also because of many of these people seeing that they were essential to moving and keeping the economy running, that they believe they deserve more cash and you know, maybe a better existence in life.

Andrew (5m 4s):

I think there's definitely something to that. That workers, particularly lower-wage workers, those frontline essential workers are talking about. They realize that this is their moment to strike that. Not literally strike though. In some cases, you'd see strikes at John Deere and other places, but this is their moment to take advantage of the leverage that they have given that it's a really difficult time to fill open positions if you're a recruiter. And so the workers in these industries who are switching jobs, we find based on data are actually seeing the largest wage increases, right? So wages are going up in general for all workers, but particularly for lower-income workers, lower-wage workers, and particularly for job switchers.

Andrew (5m 46s):

So that's part of t you can call it the great resignation. I also call it a poaching phenomenon where workers know that they can get a better job. It doesn't mean that they're leaving their industry per se, but they're taking advantage of the tight labor market and getting a raise by switching jobs.

Joel (6m 2s):

And what role does the gig economy have on the frontline workers? How many are just, you know, driving Uber's and delivering Door Dash instead of working at a full-time job and how does the government calculate gig jobs if they do it all?

Andrew (6m 20s):

They really don't. That's a great question. The monthly jobs report that gets all this press attention about, you know, how many jobs we created that headline number comes from surveys of businesses that, you know, are reflecting on their payroll, like the actual full-time workers. And so they don't count gig workers. Now, when you call in other surveys, when the government calls people and say says, Hey, do you have a job? And if they, you know, drive for a delivery service, and so they're a gig worker, they can respond, yes, I have a job and so they're counted in those surveys, but typically in terms of employment, no, it's gonna miss a lot of gig workers. The bureau of labor statistics does do a, what they call a contingent worker survey, a gig worker survey, but it's not regular.

Andrew (7m 3s):

The last data came out, I think in 2018 or 2019. So it's way out of date and really stale. But to your point, in terms of gig workers and how they're adjusting in this environment, I think it makes good work relatively a really hard sell for a lot of workers, because if you have open opportunities and we have 10.4 million job openings in the U S and a lot of them are in full-time salary positions and employers are just desperate to hire. So why would you necessarily take a gig job if you have those openings to, to choose from? And so it really comes down to do you prioritize flexibility in your schedule? Do you like the fact that you set your own hours?

Andrew (7m 45s):

And in our data at Appcast, we find that recruitment costs for gig work has just exploded and unsurprisingly, right? Who wants to necessarily drive when there are COVID risk, when there are other opportunities out there. Again, we have solutions for gig employers, but it's just a challenging market to recruit gig workers, period.

Joel (8m 7s):

So is it your consensus that the gig economy is having very little impact on people leaving the workforce and doing that based on your comment around recruiting, you know, Uber drivers and Door Dash delivery folks is so challenging. Is that what I'm hearing you say?