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Then the big question is if work is a aplenty, and workers scarce. Why is it so hard for such a large portion of the population to find good work? Why doesn't

Then the big question is if work is a aplenty, and workers scarce. Why is it so hard for such a large portion of the population to find good work? Why doesn't all of that work turn into jobs?

arrosenberg 10y ago
That work requires government initiative and investment. Many of the depressed areas keep voting for politicians who are convinced government doesn't work and they are determined to prove it. Thus, the labor force remains depressed instead of fixing the obscene number of infrastructure issues in the rust belt. Can you imagine if they spent the next 4 years spending some money to fix up the cities to make them attractive to young people? It might bring new investment, jobs and life to the area.
- pdonis 10y ago
  > That work requires government initiative and investment. No, it doesn't. It requires initiative and investment, but there's no reason why those things have to come from the government. > Many of the depressed areas keep voting for politicians who are convinced government doesn't work and they are determined to prove it. Many other depressed areas keep voting for politicians who are convinced government can work--but they are unable to prove it.
pdonis 10y ago
> Why doesn't all of that work turn into jobs? Because the market that is supposed to match workers with jobs is highly inefficient. There are a number of possible causes of this, but I think a major one is regulation, which greatly increases the cost of hiring a worker. Any market with large transaction costs is going to be inefficient. That's one of those "economics 101" things that many people tend to forget.
- JamesBarney 10y ago
  Which regulations do you think are the greatest impediment to hiring?
  - snrplfth 10y ago
    Here's a few examples: - High implicit labour prices. When you add up all the required costs to hire somebody (minimum wage, healthcare costs, payroll taxes, etc.) it's no surprise that there's going to be some portion of the population which can find no work at that price. - Unnaturally high costs in the most productive areas. Cities with lots of jobs will naturally have high costs, but a lot of regulations, like zoning law and building codes essentially put a high minimum price on living in particular places. This makes it very hard for people to move to the work. - Licensing and accreditation. There's tons of jobs (many of them service-sector jobs) that require a license, lots of permits, and often particular kinds of schooling to be able to legally do them.
    - JamesBarney 10y ago
      I agree that your zoning/NIMBY laws could be improved through federals laws, and licensing could and accreditation could be limited. But on your point about implicit labour prices I have to disagree. At least with the costs listed. The implicit labor costs increase the de facto minimum wage. But payroll taxes are 7.5%, federal minimum wage is currently $7.25/hr, fine for not covering healthcare costs ends up being ~ 1$ an hour. So we end up with a de facto minimum wage of $8.80/hr. This means that it only prevents jobs that produce less that ~$9/hr of value. Which I don't think many people would classify as a "good" job. But it also has all of the effects both positive and negative of a minimum wage. The negatives are that any potential jobs that generate less than $8.80/hr wouldn't be created, but it also brings the positives which are that any employees that generate more than $8.80/hr an value but who due to negotiating power would have made less get a raise.
  - pdonis 10y ago
    snrplfth gave some good examples. Here are a couple more: - Various laws and regulations that micromanage the hiring process, e.g., forcing employers to show evidence that it is "fair". - Various laws and regulations that make it difficult to fire a worker even if they are genuinely unproductive.

Then the big question is if work is a aplenty, and workers scarce. Why is it so hard for such a large portion of the population to find good work? Why doesn't all of that work turn into jobs?

arrosenberg 10y ago

That work requires government initiative and investment. Many of the depressed areas keep voting for politicians who are convinced government doesn't work and they are determined to prove it. Thus, the labor force remains depressed instead of fixing the obscene number of infrastructure issues in the rust belt. Can you imagine if they spent the next 4 years spending some money to fix up the cities to make them attractive to young people? It might bring new investment, jobs and life to the area.

pdonis 10y ago
> That work requires government initiative and investment. No, it doesn't. It requires initiative and investment, but there's no reason why those things have to come from the government. > Many of the depressed areas keep voting for politicians who are convinced government doesn't work and they are determined to prove it. Many other depressed areas keep voting for politicians who are convinced government can work--but they are unable to prove it.

pdonis 10y ago

> Why doesn't all of that work turn into jobs? Because the market that is supposed to match workers with jobs is highly inefficient. There are a number of possible causes of this, but I think a major one is regulation, which greatly increases the cost of hiring a worker. Any market with large transaction costs is going to be inefficient. That's one of those "economics 101" things that many people tend to forget.

JamesBarney 10y ago
Which regulations do you think are the greatest impediment to hiring?
- snrplfth 10y ago
  Here's a few examples: - High implicit labour prices. When you add up all the required costs to hire somebody (minimum wage, healthcare costs, payroll taxes, etc.) it's no surprise that there's going to be some portion of the population which can find no work at that price. - Unnaturally high costs in the most productive areas. Cities with lots of jobs will naturally have high costs, but a lot of regulations, like zoning law and building codes essentially put a high minimum price on living in particular places. This makes it very hard for people to move to the work. - Licensing and accreditation. There's tons of jobs (many of them service-sector jobs) that require a license, lots of permits, and often particular kinds of schooling to be able to legally do them.
  - JamesBarney 10y ago
    I agree that your zoning/NIMBY laws could be improved through federals laws, and licensing could and accreditation could be limited. But on your point about implicit labour prices I have to disagree. At least with the costs listed. The implicit labor costs increase the de facto minimum wage. But payroll taxes are 7.5%, federal minimum wage is currently $7.25/hr, fine for not covering healthcare costs ends up being ~ 1$ an hour. So we end up with a de facto minimum wage of $8.80/hr. This means that it only prevents jobs that produce less that ~$9/hr of value. Which I don't think many people would classify as a "good" job. But it also has all of the effects both positive and negative of a minimum wage. The negatives are that any potential jobs that generate less than $8.80/hr wouldn't be created, but it also brings the positives which are that any employees that generate more than $8.80/hr an value but who due to negotiating power would have made less get a raise.
- pdonis 10y ago
  snrplfth gave some good examples. Here are a couple more: - Various laws and regulations that micromanage the hiring process, e.g., forcing employers to show evidence that it is "fair". - Various laws and regulations that make it difficult to fire a worker even if they are genuinely unproductive.