Unemployment, Labor Shortages and The Caf
One of the most common questions heard on campus nowadays is: “Why are the prices in the caf so high?”
The answer to this question is not simple and has a lot more to do with global issues than one might think. It boils down to unemployment rates, labor shortages, and supply chain disruptions caused by COVID all around the world.
So what exactly is unemployment and why do I keep hearing about it in the news? What is a labor shortage and what does that mean for supply chains? And, most importantly, what do any of these things have to do with my salad in the caf costing more than it used to?
The simplest place to start is with unemployment. The Bureau of Labor Statistics defines unemployment as being available for work but not currently having a job. Put very simply, if you could be working but you’re not, and you are actively looking for employment, you are defined as unemployed. However, this number does not include the number of people who are employed in a job that does not provide them sufficient hours to meet their living needs or people who are simply underpaid. In fact, according to the Bureau of Labor Statistics, a person is defined as employed so long as they work just “1 hour as a paid employee”. Thus, the official unemployment rate that is put out by the Bureau of Labor Statistics can clearly be a little misleading in painting a full picture of who is making enough money to live in the U.S, along with not accounting for wages, hours and standards of living. In March and April 2020, at the start of the pandemic, unemployment skyrocketed into the double digits, hitting record numbers as entire industries shut down. Millions of people lost their jobs. Since then, the unemployment rate has slowly come down with unemployment for October 2021 reaching 4.6%, a relatively normal rate year over year.
So, how do unemployment and other factors affect the labor market? How does that affect the supply chain? And, most importantly, why does that mean the Sky Cafe still isn’t open? Following the outbreak of COVID, many people have reevaluated what it means to be a worker in today's world, and what their work-life, mental health, and overall well-being are worth to them. People are quitting their jobs at record rates — 4 million in April 2021 alone — and many jobs are being left unfilled for months at a time. Many older workers laid off from their jobs in manufacturing have gotten COVID, and they are being laid off as a sign that they should retire, even though jobs are now relatively easy to find. With the world economy reopening, there is an increased demand for all kinds of supplies and materials, but, because of the labor shortage, there are not enough workers to manufacture supplies, load and unload shipments, or truckers to drive materials around the country. All of this has led to massive supply chain issues, which has led to increased costs despite low levels of unemployment.
So why does the Sky Cafe remain closed? Ultimately, supply chain issues plaguing the U.S. and the rest of the world have been caused by global labor shortages. With more people ready to quit jobs where they feel they are being mistreated, and more job openings than people looking for jobs, the supply chain crisis does not seem to be approaching its end. And so long as there are issues with getting supplies and the costs of running the cafe are higher than what the eatery could reasonably bring in, odds are no one will be getting a steak from the twelfth floor of Belfer anytime soon.
Photo Caption: Rising inflation has been tightening our wallets in all aspects of life.
Photo Credit: Pixabay