Ep. 420: Enhanced Unemployment Benefits Are Hurting Retailers

TEK2day Podcast

Federal programs such as the CARES Act/ Pandemic Unemployment Assistance and other COVID-related Federal handouts are hurting retail businesses. Retail used to be a great way for young people to gain valuable sales and customer experience early in their career. Many readers will have held hourly jobs at grocery stores, restaurants and the like during their high school and college years. Many adults work these jobs for additional income. The geniuses in Washington D.C. have turned this labor market on its head. Many Americans who would normally work these jobs now make more money collecting COVID-related Government benefits. As a result grocery stores, wine & liquor retailers, gyms, food service establishments and other retail operations are having difficulty staffing operations at a time when customers are returning. The penalty is two-fold: 1.) Opportunity Cost – lost revenue due to insufficient staff; 2.) Wage Inflation – businesses will be required to increase hourly wages in order to provide an incentive for people to return to work. Higher wages of course will cut into profits. It is one thing for a labor market to tighten due to a healthy, productive economy (the U.S. is not net productive as trade deficits are widening). However, it is quite another for labor markets to tighten because the Federal Government is competing with American businesses. Check out our Amazon Kindle Book: "Stagflation Is Imminent": https://www.amazon.com/dp/B091NB9V7M/ref=cm_sw_em_r_mt_dp_D2TYT6MA6P6P3X7RH0YP