You go to your favorite restaurant, only to find that there’s one harried waitress serving 10 tables. Or you take your car into the shop, only to be told that it will take two days to replace the cracked infindibulum because they’re short-handed. Or you arrive two hours early for your flight, only to see a line snaking around the ticket counter and the two employees trying to deal with hundreds of angry passengers.
One of the more annoying features of modern life is dealing with companies that simply don’t have enough help. Ever since the Great Recession began in 2007, companies have been pushing workers to work longer and harder, no longer aiming for just-in-time staffing but for just-before-death staffing. And this has helped keep corporate earnings break records year after year since 2009.
But there are some signs that skimping on staff is starting to hurt business as the unemployment rate kisses 5%. Just this morning, the National Federation of Independent Business released its Small Business Optimism index for October, which was unchanged at relatively modest levels from September.
The biggest complaint in the survey was government red tape and taxes, but that’s always the biggest complaint in the survey. More interesting: 55% said they hired or wanted to hire new workers, but 48% said they couldn’t find qualified applicants. When you can’t find qualified applicants, that often means you aren’t paying enough. Most people have a good idea of what their skills are worth.
In October, 21% of small business owners said they raised wages, although that was down two percentage points from September. Sooner or later, however, they will probably have to be more aggressive about raising wages to attract the help they need — or they will become that business that used to be really good and efficient, but just can’t seem to keep up any more.
Some companies are already raising wages, albeit reluctantly. Walmart has launched a new ad campaign touting the increased spending on wages it plans, bringing workers to the princely sum of $9 an hour this year and $10 the next. “A raise in pay raises us all,” the spokesman intones. The company has long been criticized for its low pay.
For investors, higher wage demands may well mean a short-term decrease in earnings, particularly for small-company stocks. On the other hand, money you pay to workers is excluded from taxes. And sooner or later, those workers will have more money to spend at other small (and large) companies. Perhaps a raise in pay does raise us all.