Employed But Not Working?

I’ve been self-employed and working at home since before the pandemic.

When I tried to work from home full-time after my daughter was born, I was told no by all the banks.

Fast forward just a few years later and the whole banking system is working from home full-time, at least for the office people.

I’m sort of a bit jealous that I’m not working right now, at least the traditional work.

I feel like I’m missing out on free money.

You see, before the pandemic, when I went to the malls or grocery stores, they were pretty empty during “working hours”. That’s one thing I liked about being self-employed: Being able to avoid the crowds and go at my own time.

After the pandemic, when I go to the malls, the parking is full and there are line-ups at stores in malls such as Vaughan Mills. For example I remember this one Tuesday at 2pm in the afternoon with no sale and the lineup wrapped around the store at Nike.

And each time I went to a mall, Yorkdale or Vaughan Mills, it was so busy. So much busier than before the pandemic.

With unemployment at record lows, I would characterize the situation as people are employed, but, not working (as much) 🙂

I’ve also read how candidates and workers are demanding to be able to work from home full-time. Not part-time or hybrid, they want full time WFH.

Yes, I asked for that too, before the pandemic, in order to stay home with my newborn daughter, with my wife at home for the first year.

Before the pandemic, it’s standard for a company to inform candidates where they are working and when. They are supposed to be employees. But, not now.

Now employees are dictating the place of work and the hours!

See what is happening around the world:

Apple employee petition demands flexibility against return-to-office policy (US)

https://appleinsider.com/articles/22/08/22/apple-employee-petition-demands-flexibility-against-return-to-office-policy

Return-to-office showdown with workers looms as companies set Labour Day deadline (Canada)

https://financialpost.com/fp-work/return-office-showdown-labour-day-deadline

1 in 3 now work from home as more employees demand flexibility (UK)

https://www.bigissue.com/news/employment/work-from-home-1-in-3-covid-flexible-working/

WFH forever? Two years into a work-from-home revolution, some may never return to the office (Australia)

https://www.abc.net.au/news/2022-04-04/wfh-forever-two-years-on-some-workers-will-never-go-back-to-the-/100949678

Singapore Workers Spurn Jobs That Don’t Offer Hybrid Work Option (Singapore)

https://www.bloomberg.com/news/articles/2022-08-16/singapore-workers-spurn-jobs-offers-not-offering-hybrid-work#xj4y7vzkg

Self-Employed vs Employee

I’m jealous because I became self-employed for this kind of flexibility. But, the difference between self-employed and traditional workers traditionally was that self-employed take on more risk, but, also have the flexibility to work your own hours and location while employees are supposed to listen or “work” for their employer.

Self-employed also have to find our own work and we have to pay our own benefits. Paying our own benefits I think is a key difference between self-employed and employees. Employees get all these benefits in exchange for working for the employer.

Current employees are getting this self-employed flexibility and full benefits such as health insurance, life insurance, disability insurance, personal days, sick days, vacation days, covid days, paternity and maternity days, pension contributions, and who knows what else, all covered by the employer. If you’re with the government, the sick days can even accumulate!

If I was an employer, I would start hiring contractors way more if employees kept this up. You can get the same talent and save on the employee benefits expense. And we won’t complain, we never ask for benefits anyways, we buy our own! That’s why we’re self-employed.

With this in mind, what’s the point of being self-employed, I ask myself? I’m so tempted to go back to traditional work!

I have to say employee workers really have it all right now. And if it lasts, and I do think it will in the long run, that’s great for workers and the future generation of workers. Having a work / life balance is absolutely important.

In the immediate short term, I would take it while it lasts.

Why don’t I think it will last in the near term?

Well, productivity is falling so fast. With everyone shopping during working hours, or visiting the beach, and then stopping work after the business day ends, obviously, people are working less.

We have negative GDP while having record low unemployment. So, if everyone is working why is GDP going down?

Even Kevin O’Leary said that this has never happened in history where we have full employment yet back to back quarters of negative GDP.

What’s going on?

The short answer is: There are probably too many new WFH workers who aren’t working as productively as before in their new comfy environment. They’re visiting malls, beaches, grocery stores, and doing whatever errands they feel like. It’s showing in the data. In Canada, we have 7 quarters of declining productivity according to Trading Economics. This coincides with the pandemic and when everyone started working from home.

source: tradingeconomics.com

On top of that, current management is used to the old style.

Until the WFH group who are slacking off, work more productively, there’s going to be negative conseqences for all the remote workers.

Also, you need enough of the newer and younger generation to get into management and change the philosophy. Until then, there’s going to be a lot of friction.

People’s incomes are increasing too. They’re demanding it even though they know they would take less money to be able to work from home. But, it’s not happening, people are asking for more money and requiring to work from home.

This has led to increased profit warnings and productivity is going down. How could it not if people are shopping during business hours and not making up for it later?

Take a look at this headline from Bloomberg on 2022-08-18.

Companies aren’t blind. Sure, they’re keeping people on to maintain and run their business. But, at some point, if productivity keeps falling, they’re going to do the inevitable: Layoff workers.

So, looking at the big picture, you’ve got full employment, companies having to give out raises, inflation at multi-decade highs, people dictating their work location and hours, and productivity falling like a rock because they’re all at the malls or beaches.

It’s no surprise GDP went down. But, will it go down a third quarter?

It’ll be interesting to see what the next GDP numbers come in at. (Update 2022-08-28: Yes, it went down again. So, that’s 3 consequtive quarters.)

At some point, employers will have to lay people off to cut costs if GDP and productivity keeps declining.

The craziest thing is people getting extra expenses for working from home even though they demand to work from home!

That’s like a candidate saying I demand to work in Hawaii even though the employer has an office for the candidate in their city. But, the costs are much more in Hawaii so he/she wants increased pay to cover it, and then getting it!

Even if productivity stops it’s fall, companies are already increasing their budgets for robots and automation.

AI is also helping eliminate human workers. AI is better than radiologists at interpreting x-rays, they’re better than financial and business analysts, they’re replacing legal work, managers will have less “people management” issues, and many other professions in all sorts of industries will slowly or quickly get replaced.

Profit warnings are increasing, debt is at record levels globally, we just spent trillions of dollars just for operational costs instead of innovation.

It was the biggest global waste of money ever. Just imagine if we spent the extra trillions of dollars on figuring out how to cure or alleviate cancer or heart disease, how to improve traffic congestion, help clean water, and all sorts of useful things as opposed to giving out money for consumers to spend on restaurants, games, or pay their bills?

Countries around the world are spending more on military and security because of Russia and now China, and that is just wasted money. Spending on military and security is the opportunity cost of an unsafe or insecure world.

People think that spending on police, security, and military is a good thing. I’m not against them at all. But, you have to understand that spending on these things is because we have an unsafe world. Think about it, if we had a safe world, we wouldn’t have to spend as much on police, security, and military. This is why it’s actually an opportunity cost of an unsafe world.

Back to the economy, China is in a massive property bubble that is currently bursting. They just publicly re-affirmed their commitment to take back Taiwan at any cost, including by force if they ultimately need to.

So, take it while it lasts, but, prepare for the worst. I do think that at some point, companies will be laying off big time if the recession gets worse.