As we are coming out of our Covid downtime many people have serious decisions to make. Life returning to normal means that many of the moratoriums will be coming to an end, student loans will soon become due, forbearances will end, evictions and foreclosures will start again, and choices will have to be made.

One of the big choices that many people are trying to make is whether to go back to work or not. In point of fact, many people are actually making a little more money on unemployment benefits than they would have been earned if they had been working. In that scenario, it seems like the choice is obvious…stay home; after all, who would want to go to work for less money, than you would make just sitting at home and watching TV?

There is small problem with this thinking. In the short term it might seem like a good idea; more money/less work, but it might end up hurting you in the long term.

Currently there are more available jobs than people to fill them. That is normally a great thing, but simple supply & demand economics means that when the supply of labor is low, and the demand for labor is high, then the cost of labor will go up.

Employers who need help will have two options, 1) pay more money for labor, or 2) adjust the business in some way to compensate. We are seeing both of these options playing out all across America. Employers are paying more to get good people. When that doesn't work, businesses are adjusting their hours, automating processes to avoid hiring new people, and making other adjustments to compensate for having fewer employees.

Those actions are happening right now. If you are banking on the old jobs being available when your unemployment compensation runs out in a few months you might be disappointed. Remember, if your old employer had to increase wages to hire a new employee, they may not have the budget to hire you, even at your old rate of pay, and they can't lower the wages of the person that they hired in your absence.

For employers that are automating certain tasks, those jobs are permanently gone and will never return. Cameras are replacing security guards. Software is replacing back-office bookkeepers. Scanners are replacing cashiers.

Every day, the internet, apps, and software are creating innovative ways of minimizing labor costs for small businesses, but unfortunately that means less need for people to accomplish the same task.

To complicate this situation, you have to remember that everybody else's unemployment benefits will expire about the same time that yours will run out, and so now you will be competing with all of those people for the same pool of jobs at exactly the same time.

That means that in the future 1) there are no guarantees that the job market will remain as open as it is now, 2) there are no guarantees that your old job will be waiting for you when you are ready to go back to work, and 3) there is no guarantee that the wages will remain as high as they are right now.

For those reasons, it might be a good idea to lock in a good paying job now, while employers are motivated to pay more for labor. It might be less overall money than you may be making on unemployment, but if you can establish yourself as a valuable asset for a company right now, you ensure that you will have long term job security.