More on Worker Shortages and Inflation

A "tilt" toward leisure over income?

An addendum to Sunday’s blog. 

Sunday, I focused on the delayed choice of many workers, their temporary pull-back from the job market as they assessed their options.  These are workers that will move back into the job market, perhaps, as I argued, with higher wages (a good, to my mind). 

Other workers, however, are unlikely to return. Many are making a rational chose to become part of a one income family and/or take early retirement.  During the pandemic people improved their home environment, not only upgrading their entertainment facilities but generally making at-home living (i.e. cooking, entertainment centers and craft hobbies) more attractive.  Home investments changed the work/leisure tradeoff.  Should I take retirement or keeping working and buy more luxuries?  Should I take advantage of a new lifestyle I’ve come to value during the pandemic or work more hours?

On related line of thought. We have all noted that restaurants are reducing their hours. The reason may not only be lack of workers, or higher costs for labor, but also reduced consumer demand.

We may have an oversupply of some common fare restaurants.  Top eateries still seem to operate at before pandemic hours and are busy, even with higher prices. Others, particular the ubiquitous mall restaurant, are fighting to survive a smaller customer base.  Maybe this is because of a continuing concern with the virus, but perhaps also because of the stay-at-home attitude I discussed above.

Afterall, you don’t stay open longer, even if you can find workers at customary levels of pay, if the extra hours run in the red.