You may have read the fascinating story entitled "Ketchum Idaho has Plenty of Jobs but Workers Can't Afford Housing" in the Wall Street Journal Wednesday and thought to yourself how the heck is that possible? How can there be such a terrific place to work but no infrastructure to handle the workers?
There's a very simple answer. When rich people with the ability to be untethered take advantage of it they don't go to places with infrastructure for tens of thousands of people. They go to far more exclusive places that can't handle the onslaught.
I find there is a great naivete built into these stories that truly surprises me given how cynical journalists can be. The pandemic has released the hybrid work environment and many of us, lo and behold, have Zoom (ZM) and will travel and not to where you live now.
The phenomenon in Ketchum is a phenomenon that is being played out in every single amazing little town in America: wealthy people unleashed upon the country in its least expected way. It's almost as if there is a Rich Rush like a gold rush, where people descend on a bountiful area that simply can't handle it and very strange things happen.
It reminds me of a trip we took to the Bakken to experience the oil boom in that North Dakota basin first hand. I made sure we went to see a McDonald's (MCD) in the town of Williston where workers were paid $26 an hour because they couldn't afford to live there otherwise. The McDonald's could have chosen to go out of business but there was, well, too much business to not stay in business.
But it wasn't like that originally. When the boom began they couldn't "find" any workers. But what that really meant was they wouldn't pay enough to find the workers they needed. The Bakken showed me that if you pay enough this problem can be alleviated.
That's what's going to have to happen in the Ketchum's of the world. The Rich Rush is bringing with it the baggage of services that the rich need and if you want to cater to those services you are going to have to pay workers a lot more than you are used to or want to. That's an unintentional consequence of what's happening when the well-off can work where they used to vacation.
Now we are at the toughest moment, the moment that I dealt with when I talked to businessmen in the Bakken. You see they had seen a similar boom once before for oil that then busted and a lot of businesses expanded and then were crushed for doing so.
I think that we are seeing these wrenching stories in large part because it's just plain too risky for businesspeople to expand to only find that the companies their new patrons work for have called them back to work. If hybrid work goes away they will go like the towns that catered to the Bakken, fighting ghost town status.
So here's what has to happen. Slowly but surely businesses in these towns will realize that the combination of the untethered rich and the ever improving Zoom has created a permanent mismatch that's worth catering to. If they can't, then others, better organized, more efficient, will come in and solve this worker problem by paying much more, like the unheard-of $26 an hour McDonald's employee.
The beautiful areas of the U.S. have to come to grips with the notion that hybrid work is here to stay and the less well off have to get their fair share if they are going to work in these often seasonal small towns.
I say the public policy implication revolves around police, fire and teachers, the ones with truly fixed incomes that will be driven out and won't get the raises they need. But Ketchum and other towns with available jobs? They are illusory. The solution is, as President Biden has whispered: Pay more. Just like in Williston, North Dakota. Or else, someone else will and make outstanding profits doing so.