COMP NEWS – The great resignation has affected the supply chain industry in a major way which has had an impact on US inflationary pressures.
The so-called “Great Resignation” of American workers quitting their jobs in record numbers is one of the factors driving supply chain problems and generational increases in inflation for food, cars and other items.
Higher diesel and overall energy costs along with shortages of truck drivers and other supply chain workers are prompting freight and logistics companies to increase wages and fuel surcharges. Those costs get passed on to retailers and eventually consumers.
In fact, more than 20% of those who voluntarily left their jobs in 2021 were employed in the logistics, transportation, retail, and wholesale trade industries. This, combined with an increase in demand as online ordering and fulfillment gains popularity has spelled trouble for the logistics labor market.
A record 47.4 million U.S. workers quit their jobs in 2021. The turnover rates include 11 million employees who voluntarily exited their jobs in the logistics, transportation, retail and wholesale trade positions, according to the U.S. Bureau of Labor Statistics, which also puts utility positions in with the supply chain grouping.
Supply chain sectors have close to 1.9 million job openings nationwide — including in the trucking industry that gets products from ports, farms and factories to store shelves and consumers’ pantries and fridges, according to BLS.
Oftentimes these labor shortages mean that employers must provide higher wages in an attempt to attract and retain talent. These costs are then passed down the supply chain, working their way to the consumer.
Food prices were up 7.0% in January and overall prices are up 7.5% compared to a year ago, according to federal inflation numbers released Feb. 10. The U.S. had 7.0% inflation rate in 2021 — the highest in 39 years.
Labor shortages across the economy — including among truck drivers and logistics workers — put upward pressures on wages making it more expensive to get products to consumers.
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