Economist Writing Every Day

I’ve long been a lurker on r/kitchenconfidential. I did a few brief tours in the service industry when I was younger and my partner used to manage a successful upscale restaurant. If you’ve spent anytime in a restaurant after closing in the last ten years, then you probably aren’t surprised by the continuing labor shortage in the service industry. Things have been bad for a while, with a pervasive sense that the industry was dependent on employees with weak outside options (i.e. a criminal record) or high exit costs (i.e. can’t afford to be on entry-level wages in a new career track). As I’ve written before, we’ve been eating on borrowed time: the pandemic game shifted the calculus for a lot of marginal employees who have left the service industry and likely aren’t coming back. The service industry is important, but not such that a great reorganization is likely to have catastrophic short term consequences for broader society.

Which bring us to nursing.

Nurses are burned out.

If the daily threads at on r/nursing subreddit are even mildly representative, the status quo in nursing is unsustainable. It’s not just that the job has become more dangerous, more tiring, and less rewarding. Tough jobs exist all over the place, with employees taking them on in return for higher wages than they might otherwise enjoy. No, the bigger problem in nursing is that it is not what these people signed up for. It has become dangerous and unrelentingly exhausting. It requires increasingly greater education and training that is highly specialized, with little in the way of outside options likely to reward that education and training. Can you think of a job with equivalent background requirements, that places the same physical demands on you, and forces you to interact at a personal level in the general population? I can’t, and if you did, I can almost guarantee that the pay is considerably higher.

The broad shortage of nurses in the US has gotten a fair amount of attention. That article points to a lot of causes, most entirely valid (the idea that travel nurses are a cause, rather than symptom, of the nursing shortage is silly, but we’ll let that slide- the broader point stands), but this is one of those cases where it seems to me the diagnosis is best kept simple: nursing has become a worse a job, in part because of the pandemic, and that has tipped the cost benefit analysis towards labor exiting.

While cooks and nurses decided that the pandemic was a good time to get out, let’s not make the mistake of ignoring one of the most martyred vocations in the US.

Teaching sucks, and this time they mean it.

You could go to r/teachers and read the resignation posts, but there isn’t a lot of new information to be gleaned. Everyone knows teachers are undervalued and underpaid. I was a public school teacher for two years, and I endured lots of third drink questions of “Why?” to go along with daily complaints about pay and “continuing education” requirementss with my colleagues. The rate of exit, was pretty predictable. More than half of teachers left the profession in their first 5 years, the rest stayed for life.

I’ll wait for the data to come out before I make broad pronouncements, but this wave of resignations could be different. If we lose a generation of teachers (>80% of those in their first 5 years), there really will be a massive shortage down the road. The pandemic is interesting because it’s taught us two things:

1. Online teaching is inferior
2. The value of schooling as “mass daycare” is hard to overstate

If we step into massive teaching shortage five years down the road, there’s not going to be a “scale education online” solution. The only solution will be to raise compensation for teachers and bring labor into the industry and, well, the failure to raise teaching salaries is maybe the single greatest of example of the divergence between what people publicly support and what they actually vote for. A mass teacher shortage would certainly given teachers unions across the country the opportunity to negotiate better pay scales, but I’m cynical enough to expect they will find a way to waste it on even more job security for their worst members while ensuring that the best teachers still never see a dime in extra compensation. But hey, prove me wrong, yeah know?

What do Cooks, Nurses, and Teachers have in common?

I can’t help but see what these three vocations have in common in the US labor market – a frequent sense of being trapped. Sure, working grill for $15/hour might not sound like something you couldn’t bring yourself to leave, but if you’re 34 with a high school diploma, a felony drug arrest, and a mortgage to pay, the intermediate stage between the status quo and something better might not seem so great. No, you did not enjoy being threatened by a patient who backed you into a corner and told you he “knows what you are trying to inject in him”, but you have a masters degree in nursing, which makes the pay gap between nursing and not nursing a miserable prospect, especially if you’re going to pay off the student loans that got you the job that makes you miserable. You know you essentially can’t be fired, but you’ve also seen the pay scale by seniority, and the prospect of teaching 5th grade for 25 more years fills you with a dark melancholy you did’t know possible. But your degree is in teaching, which essentially means you’d have to find a way to start from scratch at twenty-six. Or thirty-three. Or forty-one.

But then the pandemic happened and everything you already hated got even worse. So you did it. You quit.

But how many of you quit? How many of you are laying out your exit strategy? What will these industries look like in 2 years? We won’t know for a while, but I do think we’re going to learn which industries have been dependent on squeezing every ounce of juice out of trapped labor pools (with what you might call actual monopsony power), versus those industries where the standard “work sucks” complaints simply get more attention for whatever reason.

Personally, I’m betting on two out of the three, but I’m not telling you which two. Working in two of these industries is going to look very different in the wake of the pandemic, both in terms of labor characteristics and compensation. And one will just return to the previous normal, like it never happened.