Blue Collar The New Collar?

Welcome back to this week’s edition of The Supply Times. In this issue:

• A look at the new crisis facing the world’s food supply

• The resurgence of the working class in the labor force.

• Things I’m reading, watching, and listening to

• Experiencing my first live conference since 2020 - Chicago CSCMP

Industry Highlights: Farm-ageddon

A lot of emphasis has been placed on the pinch Americans are feeling at the pump as a result of the Ukraine conflict, but soon, they could start feeling it in an unlikely place—the dinner table. And no, I’m not especially interested in food stories because it’s the month of Ramadan. Well, maybe.

According to Bloomberg, global food prices surged 13% this month—the fastest pace on record. This is due not only to port closures in the region affecting shipping lines, but also because of the critical agricultural staples produced there.

The Russia/Ukraine “breadbasket” region near the Black Sea is the world’s largest wheat producer—an International Food Policy Research Institute report states the region’s responsible for 12% of the globe’s food calories—and Ukraine is the number one exporter of sunflower oil.

Similar to oil, the US relies predominantly on its own grain stocks produced in the midwest, but in order to grow that grain, it needs fertilizer—96% of which comes from Russia, according to the Michigan Potash & Salt Company. And while domestic fertilizer companies claim they can replace that deficit within the next 3.5 years, it’ll come at a price. According to The Wall Street Journal, cereal prices climbed 9.2% this year, the sharpest increase since 1989. Likewise, meat prices have risen 14.8%.

While it’s unlikely these prices will cause mass chaos in the US, more concerning is the global picture as a whole. A recent article from the Center for Global Development said the war and rising COVID cases in Russia and China will cause more issues globally, especially in Middle Eastern and Nor th African nations where groceries comprise nearly half of household budgets. “The lower discretionary income of poorer households limits their ability to maintain food consumption by cutting back on other expenditure and creates hard choices between food and other necessities,” the CGD writes.

Economists hope the inflation surge and supply issues are nearing their peak, pointing to a 3.8% decline in housing and used vehicle prices. But with the Labor Department reporting this week that US inflation jumped to a four-decade high of 8.5% in March, it’s hard to stay optimistic.

The Future of Work: Blue Collars on the Rise

A talent transition is underway in the US at a magnitude that we haven’t seen since World War II, when the wartime economy provided opportunities for traditionally low-wage workers to climb into the middle class. This time, the driving force behind the shift is an increase in tech job openings coupled with the vacuum left by The Great Resignation.

According to The Wall Street Journal, more Americans are making the leap from blue-collar jobs and hourly work to higher-paying roles involving tech skills. These “new collar” jobs are in software and IT, as well as logistics, finance, and healthcare. Management consulting firm Oliver Wyman reported that more than a tenth of Americans in low-paying roles like manufacturing or hospitality have made the jump in the last two years.

Why the sudden change? Many of these tech jobs previously had stricter requirements, such as four-year college degrees or previous job experience. But with more companies racing to integrate more data and automation into their day-to-day business and declining immigration numbers eroding the talent pool, executives are loosening the reins.

Okta—a tech company that provides secure access to business applications—for example, removed college-degree requirements from several of its sales positions in order to both keep up with its growth targets and diversify its workforce. “We’re moving more to looking at motivation and skills and experience, not ‘What college did you go to?’” Okta business development manager Rachele Zamani told The WSJ.

But just because blue-collar workers are movin’ on up doesn’t necessarily mean they’ll be getting that deluxe apartment in the sky. A recent Mercer survey showed 66% of companies didn’t plan to adjust their salary budgets because of inflation, meaning that workers in new, higher-paid positions will have about the same buying power—or less—than they did in their previous job.

The Supply Aside: What I’m Reading, Watching, Listening to, and Thinking About

RE: Supply Chain, Work, and Beyond

• 📕 Read - Author Adam Grant recently did this live lecture with Professor Scott Galloway, and it got me interested in reading Grant’s book, Think Again: The Power of Knowing What You Don’t Know. It talks about how while learning is a critical skill to success, in our rapidly changing world, it’s important to rethink and unlearn things we we “think” we know. A fascinating read about stepping outside of our own egos and challenging our thought processes. And when a book comes highly lauded by both Brené Brown AND me, you KNOW it’s got to be worth picking up.

• 📺 Watch: You know I love a good article from The Wall Street Journal, but their digital department is no slouch, either. They recently published a great documentary called Chain Reaction: Why Global Supply Chains May Never Be the Same. It does an incredible job of contextualizing the world’s supply chain woes in a way that makes sense to the average consumer. It’s one thing to read about it in the paper every day, but seeing it on the screen has a different impact. If a picture’s worth a thousand words, this hour-long documentary is more valuable than the Oxford English Dictionary.

• 👂 Listen: I had the honor of participating in this year’s CSCMP Council of Supply Chain Management Professionals conference. It was great attending the first live conference in over two years. And what made it especially memorable was that had the opportunity of presenting on the topic of ‘Future of Work in the Manufacturing Sector.’ I was fortunate to have a fantastic co-presenter, Juli Domingues, Global HR Business Partner at Mars. After discussing top trends shaping talent in 2022, we got a real-time update on how a world class company is shaping new ways of thinking and working.

• 💡 Think: The recent news coming out of China about the enforcement of their “Zero Covid” policies has me thinking that we’re witnessing extraordinarily oppressive measures in a budding superpower. They’ve got workers living in their offices—or the factory floor—for weeks at a time, and citizens are walking around with prepper-style go bags in case they get yanked off the street and placed into quarantine for weeks without notice. It’s the type of government action that would make great fodder for a Margaret Atwood novel, but this isn’t a dystopian Hulu mini-series. This is real life and it’s downright amazing to observe the lockdown of 25+ million people in pursuit of what they know is a failed attempt at Zero Covid. As an infectious expert recently put it: “The original Covid was like a forest fire that we could put out to some extent, but Omicron is like the wind. How do you stop the wind?”

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