Why Blue Collar Jobs are in Higher Demand
Several factors have converged to create much more demand for goods, and much less for services.
Restaurant, bar, and hotel closures: With many businesses in the service industry shuttered by the pandemic, consumer spending fell off a cliff.
Booming housing market: Home sales are up 19% over last year, buoyed by mortgage rates falling to below 3%. Construction and home improvement demand has followed.
Shift to ecommerce: Before the pandemic, customers did about 40% of their shopping on the internet. Now it’s 60%. Grocery sales account for a lot of this shift, and that required many more workers to get those goods to consumers’ doorsteps.
Spending money at home: While people saved money by not going on vacation or going out to eat, many employees were also working from home. That caused increased demand for goods to be enjoyed at home – everything from games, to workout equipment, to comfy clothes, to renovated home offices.
Despite High Unemployment, Hiring is Still a Challenge
Despite the demand for blue collar workers, and the need for many Americans to get back to work, the two problems don’t seem to be solving one another. Why not?
Fear of catching Covid: While vaccinations have increased lately, a good percentage of the workforce is still susceptible to Covid and are staying home if they can afford it.
Skills mismatch: Ex-hospitality workers used to working in a hotel or fine-dining restaurant may not want to work with their hands in a noisy factory.
Childcare issues: Some people with kids at home are not able to find a way to get their kids educated and also work a full 9-5 schedule out of the home.
Vaccine optimism: Workers don’t want to change industries if their old industry may be coming back in the next few months, due to widespread vaccinations.
Competition with the big guys: Amazon and other companies are paying $15 an hour, so if a company is hiring in an area with an Amazon warehouse, competition for workers may be tight.
Rising Demand = Rising Wages?
Democrats in congress have been pushing to raise the federal minimum wage from $7.25 an hour – unchanged since 2009 – to $15 as part of the next economic rescue package. Republicans, and a few moderate democrats, have been resisting such a big increase. But wages are increasing anyway, without legislation, due to the high demand for workers in some of the industries who need to hire the most.
While these giant companies can afford to pay more, it’s inevitable that smaller businesses will have to raise their wages to compete for workers – or suffer the costs of lost revenue opportunities by leaving vital positions unfilled.
Generac, a company who sells generators, has seen sales grow 25-30% in the past year, and have had to raise wages accordingly:
“The impact of not being able to produce and respond to the demand
surge, the lost opportunity cost of that, is much greater than the
cost to our bottom line of a 30% increase in wages.”
-Aaron Jagdfeld, CEO, Generac
Great Dane trucking manufacturers echoed a similar sentiment:
“My ability to produce is being hindered most by… being able to get qualified workers.”
-Brian Sage, EVP of Manufacturing, Great Dane
*Sources: Wall Street Journal, The Journal podcast, CNBC, Business Insider
Labor Market Insights
Throughout the pandemic, we’ve brought you labor market trends based on our Insights data as well as data from other sources. In this month’s infographic, we look into job posting trends from the start of the pandemic until now in the key industries that make up blue collar jobs.
For the above industries, there is a precipitous fall at the beginning of the pandemic, followed by a slow but steady increase. The holidays saw a huge hiring surge, as expected. The beginning of 2021 shows a strong recovery that puts these industries back to pre-pandemic levels, with plenty of potential to keep rising as the economy recovers.
For a deeper dive
Visit our previous infographics at talroo.com/resources
*** Source: Talroo’s Insights business intelligence tool sifted through 6 billion points of data including job postings and job seeker activity from March 2020 - 2021. Insights also provides major and minor job classification data as well as geographic data from the national level to cities and zip codes.