It seems like there is a shortage of everything these days and no one knows how to fix this. There are a lot of reasons one can come up with to try to ascertain why that is. The first, most obvious reason, is COVID. The economy was shut down last year and people were out of work for a while (some still are even now, more on that later). There are governments in the world (and this country) that are still making COVID related mandates which further hurt economies. There are still dozens of cargo ships waiting to be allowed into port to drop off their cargo to be sold here in the US.
The problem is more than just COVID, although most of the other reasons can be traced back to it. One of the issues is sociological. Many people did not go back to work because they either couldn’t or realized, due to the pandemic, that they didn’t have to. When citizens were forced to stay home due to government mandates, they realized something. They realized that other things in life were important, as opposed to work. So many married people are going back to a one income household, and they realized even with rising prices, that they can do it. They sent kids to daycare before, but since kids had to quarantine so much, they were paying for daycare and having to take off work to care for a quarantined child. So they decided it was more worth it to just stop working and pull the child from daycare and stay with them full time. As a result, there are just less people in the workforce.
What happens when people are not at work? They stay home. What happens when people stay home? They get bored. What do bored people at home do? They try to find things to do. People started buying up a lot of stuff that they wouldn’t ordinarily buy to have stuff to do at home. Bikes, TVs, exercise machines, video game consoles, computers, gardening supplies, etc. were all but impossible to come by due to this. And at times many of those things are still hard to come by. Many ports were not anticipating this nor were they prepared for it.
Many people will not return to work, and for those that do, the jobs to which they return will have changed. They will become more flexible. The pay will also be higher. That is another thing that has happened with the pandemic. People (and companies) are realizing that you can’t live on wages that many jobs have been paying. This is why many companies are raising their minimum wages, for one, The Walt Disney Company just started paying $15/hour minimum wage as of October 2021 (Yahoo News). These companies are having to fight tooth and nail for the workforce that remains and that includes raising pay, benefits, and perks. So, again, the economy will have to adjust to a smaller workforce.
Another thing that has contributed to this supply shortage are the stimulus packages. Remember all that “free” money the government sent because they were forcing people not to work and people still have to pay for stuff? That kept demand at a certain level and in some cases even raised it. Supply went down during this time, because of people not working and the economy being frozen. So prices go up, because when demand exceeds supply, that’s what happens. It’s an economic law. Global supply is STILL trying to catch up to demand which has only risen since the shutdowns. It’s not forecast to equalize any time soon either. So now we have less stuff, and to top it off, the stuff that remains is more expensive.
Speaking of expensive, we have been talking about the price of the goods themselves. Let’s add shipping costs into the equation. Pricing on shipping containers has gone through the roof. In 2020, it cost roughly $2,000 to $3,000 to ship a container overseas(ICIS; The Economist). That number is closer to $20,000 or more now. If this gets much more expensive, maybe it will be more economical to locate some manufacturing facilities in the Western Hemisphere as opposed to the other side of the world.
If these issues weren’t enough, something else has hit the US transportation industry: poor logistics. Many of these ports and rail stations and warehouses don’t have an efficient way to communicate back and forth to make sure the monster that is the import/export business is functioning properly. They do not communicate (effectively) with each other and so goods that are in the pipeline are more likely to see a bottleneck (or two, or three) before reaching their destinations. What happens is that goods just wind up sitting somewhere waiting for someone to come get them to bring them where they need to go. If there is a shortage of workers (there is) at any step in the equation(more than one), goods are going to get held up at that point in the process. When those goods get held up, then all the other goods waiting behind those goods must continue waiting until someone comes and picks the first ones up.
The reason I am writing this is because the biggest consumer driven holiday of the year is fast approaching. This year even more than last year, many people will not be able to get all the Christmas presents they want. Whether that be due to having less money because it’s a one income household or because the goods simply aren’t here, this Christmas seems like it is going to be a little leaner than others. Let everyone just remember that we need to have grace with each other and that’s what the meaning of the season is. Jesus would’ve done it for you, so you do it for your fellow man.
Let's be the change we want to see in the world.