8 ms·

It's weird to me that there are all kinds of wacky theories in this thread except for you with the obvious answer: the supply of workers exceeds demand so the p

by harryh 9y ago

It's weird to me that there are all kinds of wacky theories in this thread except for you with the obvious answer: the supply of workers exceeds demand so the price (their wage) is not rising. We had a really big recession in 2008-9 folks! You might have read about it? We've been recovering since mid 2010...adding 200k jobs per month or so. But these things take time.

toomuchtodo 9y ago
Appreciate the kind words, but it's still much more complex then that. Businesses get anchored to a certain wage cost. In the article, they mention businesses unable to fill roles at $9 or $17 per hour. Well, there may be unemployed people, but they're not willing to do those jobs at those rates. They're not the market clearing price for those roles. If you're offering a wage for months on end, and you can't fill the role, you aren't paying enough. Full stop. Again, I want to stress that the curious macro nature of what we're seeing is because of a combination of poor statistics and business decisions. I'm sure we're not at full employment yet, and I'm sure business are not willing to pay more for labor until they absolutely have no choice, and I'm sure that time of reckoning is almost here. But not quite yet. Still more slack to pick up, as you mention.
- harryh 9y ago
  Ya, I agree that there is some stubbornness among employers to raise wages and that more jobs than typical are remaining unfilled as they hope to find someone at their $12 price point rather than just ponying up $14 (or whatever). Probably this is due to the unusually large recession we had. The fact is that employers could get away without raising wages for a really long time. No big surprise if it takes them a while to catch on that the end of that line is neigh. But ya, mostly slack. Another 2 years or so. Maybe a bit more. The 2020 census could put the nail in the coffin. A shit ton of people get hired for those things.
  - chii 9y ago
    > $12 price point rather than just ponying up $14 that's interesting, but has anyone asked the question of whether the business can actually remain profitable if the rate was $14 rather than $12?
    - harryh 9y ago
      Corporate profits are up a bit as a % of revenue. Similar labor's share of national income is down a bit. A lot of businesses could afford to pay a bit more. Just a bit though. There hasn't been some sort of sea change like a lot of people seem to think.
      - pas 9y ago
        That could easily happen due to consolidation and averaging over sectors. In some sectors with high barriers to entry giants earn a lot, in other sectors, it's trench warfare with competition and <1% profit margins.
    - kahnpro 9y ago
      If the business can't earn a profit at the market rate for the labour required to run the business, then maybe they shouldn't be in business any more? I mean lots businesses become viable if you only have to pay $1/hr.
      - mistermann 9y ago
        In some cases maybe that's the trigger point where it makes it worthwhile to buy the products overseas (free shipping!) and deal with the uncertainty of when you'll receive it. The current system sometimes seems designed to fail.
        VLM 9y ago
        There's a lot of options other than simply offshoring. Consider externalizing costs, almost no one has a servant pump gasoline for them, I would imagine you have to be very old for "self service gas station" vs "full service gas station" to mean anything to most Americans. Another option is political corruption, I'll donate $ to your re-election campaign if you create a property tax free zone for my business.
  - losvedir 9y ago
    > they hope to find someone at their $12 price point rather than just ponying up $14 (or whatever) One of the issues is that it isn't just ponying up an extra $2/hr. If a company already has, say, 10 employees at the $12/hr price point, they won't be too thrilled about a peer coming in at $14/hr. Most likely, in the short to medium term, they will have to be bumped to $14/hr, too. So rather than being an extra $2/hr, it's actually an extra $2/hr + (10 * $2/hr) = $22/hr.
- mgkimsal 9y ago
  " If you're offering a wage for months on end, and you can't fill the role, you aren't paying enough. Full stop." I do think that's a big part. At local meetup groups, companies come pitch their job openings, and almost always say "we're having a hard time finding folks - and we're paying market rates!" I will sometimes counter with "if you're offering a rate and no one is taking you up on it, by definition, that's not the market rate". It might be in someone else's market, but not yours. The "market rate" for ipads was $499 for a long time, but that didn't mean HP could get $499 for their tablets.
  - skgoa 9y ago
    It's the same issue as in the car market. The advertized numbers are wishful thinking. The final price on the deal is almost always better. But you don't see those numbers advertized, because those open positions/cars will be spotted quickly and thus the offer will be filled quickly. "Market rate" is a concept that only works when their is open outcry, meaning that offers and agreed deals are visible to other market participants.
  - mistermann 9y ago
    If you're an employer in Canada, you just get together with your buddies, call up your local government official and "convince" him to launch a program where hundreds of thousands of minimum wage "Temporary" Foreign Workers (TFW's) are imported to fill the gap. And if you're a jealous high employer of skilled personnel, you just do the same, and legislation has just recently been passed so skilled workers can now be imported just like TFW's. Now, there will never be full employment across most of the job spectrum so salaries will never have to rise. Add in a top 3 in the world unaffordable housing market, and this is how you eliminate a middle class.
    - gozur88 9y ago
      I did find it odd we have an entire article on wages and no mention of immigration. People, particularly on the low end, are not going to get raises if you import new workers faster than the economy can absorb them.
- killjoywashere 9y ago
  I suspect the liberal arts majors in the C suites are waiting for AI to solve their labor problems. They don't understand how much labor is required to capture AI-caliber data.
- Eridrus 9y ago
  I wonder if the discussion of wages captures everything. Particularly for those we expect to "draw back in" to the labor force. Will a few more dollars an hour change things, or is there something about the nature of the positions that makes them unappealing to people out of the labor force? Also, companies do have a ceiling on how much they can pay without raising prices, and to the extent you want to pay people fairly, you would have to raise wages for all your employees.
- brightball 9y ago
  > Well, there may be unemployed people, but they're not willing to do those jobs at those rates. Yep. That is essentially the crux of it and also why there's a big trade off between unemployment vs a small basic income. With unemployment you collect while having free time and then lose that income stream as soon as you take the job, making the decision to take a job significantly less obvious. With a small (survival level) basic income, having a job means you make more money...period. It's an aspect of the equation that nobody wants to talk about. In low cost of living areas you almost have an incentive to collect unemployment for stretches because of it.
  - Retric 9y ago
    Taking a low paying job can hurt future earnings, but generally I agree with you. I was once reviving enough unemployment that many full time jobs would have been a payout, at the same time unemployment was not even enough money to pay rent. However, taking a job to slow the bleeding would have been more appealing.
- paulddraper 9y ago
  > If you're offering a wage for months on end, and you can't fill the role, you aren't paying enough. Full stop. Right. But don't forget that it's possible for a wage to simulatenously too low and too high. It can be too low to higher anyone, but too high to be profitable to the employer. And in that case, the job is defunct.
Eric_WVGG 9y ago
… then why are employers struggling to fill positions, as per the article? Given the choice between toiling and not being able to make ends meet, or playing videogames and not being able to make ends meet, Americans are choosing Halo. That's not complicated.
- KekDemaga 9y ago
  How do they make money playing video games?
  - Eric_WVGG 9y ago
    They don’t. So what?
    - KekDemaga 9y ago
      How do they live?
      - Eric_WVGG 9y ago
        https://en.m.wikipedia.org/wiki/Hikikomori https://en.m.wikipedia.org/wiki/Hikikomori http://www.theblaze.com/news/2017/04/24/the-number-of-millennials-living-with-their-parents-is-on-a-shocking-rise/ http://www.theblaze.com/news/2017/04/24/the-number-of-millen...
marcosdumay 9y ago
It is true, but it's begging the question. Instead of "why are people unemployed?", it just becomes "why are business not hiring?" Most of the replies are then trying to answer the second question, because the refraiming is very likely a good one.
awkwarddaturtle 9y ago
> It's weird to me that there are all kinds of wacky theories in this thread except for you with the obvious answer: the supply of workers exceeds demand so the price (their wage) is not rising. That's not why. Japan has had full employment for 20+ years. Their wages have steadily declined for 20+ years.

by harryh 9y ago

toomuchtodo 9y ago

Appreciate the kind words, but it's still much more complex then that. Businesses get anchored to a certain wage cost. In the article, they mention businesses unable to fill roles at $9 or $17 per hour. Well, there may be unemployed people, but they're not willing to do those jobs at those rates. They're not the market clearing price for those roles. If you're offering a wage for months on end, and you can't fill the role, you aren't paying enough. Full stop. Again, I want to stress that the curious macro nature of what we're seeing is because of a combination of poor statistics and business decisions. I'm sure we're not at full employment yet, and I'm sure business are not willing to pay more for labor until they absolutely have no choice, and I'm sure that time of reckoning is almost here. But not quite yet. Still more slack to pick up, as you mention.

harryh 9y ago
Ya, I agree that there is some stubbornness among employers to raise wages and that more jobs than typical are remaining unfilled as they hope to find someone at their $12 price point rather than just ponying up $14 (or whatever). Probably this is due to the unusually large recession we had. The fact is that employers could get away without raising wages for a really long time. No big surprise if it takes them a while to catch on that the end of that line is neigh. But ya, mostly slack. Another 2 years or so. Maybe a bit more. The 2020 census could put the nail in the coffin. A shit ton of people get hired for those things.
- chii 9y ago
  > $12 price point rather than just ponying up $14 that's interesting, but has anyone asked the question of whether the business can actually remain profitable if the rate was $14 rather than $12?
  - harryh 9y ago
    Corporate profits are up a bit as a % of revenue. Similar labor's share of national income is down a bit. A lot of businesses could afford to pay a bit more. Just a bit though. There hasn't been some sort of sea change like a lot of people seem to think.
    - pas 9y ago
      That could easily happen due to consolidation and averaging over sectors. In some sectors with high barriers to entry giants earn a lot, in other sectors, it's trench warfare with competition and <1% profit margins.
  - kahnpro 9y ago
    If the business can't earn a profit at the market rate for the labour required to run the business, then maybe they shouldn't be in business any more? I mean lots businesses become viable if you only have to pay $1/hr.
    - mistermann 9y ago
      In some cases maybe that's the trigger point where it makes it worthwhile to buy the products overseas (free shipping!) and deal with the uncertainty of when you'll receive it. The current system sometimes seems designed to fail.
      - VLM 9y ago
        There's a lot of options other than simply offshoring. Consider externalizing costs, almost no one has a servant pump gasoline for them, I would imagine you have to be very old for "self service gas station" vs "full service gas station" to mean anything to most Americans. Another option is political corruption, I'll donate $ to your re-election campaign if you create a property tax free zone for my business.
- losvedir 9y ago
  > they hope to find someone at their $12 price point rather than just ponying up $14 (or whatever) One of the issues is that it isn't just ponying up an extra $2/hr. If a company already has, say, 10 employees at the $12/hr price point, they won't be too thrilled about a peer coming in at $14/hr. Most likely, in the short to medium term, they will have to be bumped to $14/hr, too. So rather than being an extra $2/hr, it's actually an extra $2/hr + (10 * $2/hr) = $22/hr.
mgkimsal 9y ago
" If you're offering a wage for months on end, and you can't fill the role, you aren't paying enough. Full stop." I do think that's a big part. At local meetup groups, companies come pitch their job openings, and almost always say "we're having a hard time finding folks - and we're paying market rates!" I will sometimes counter with "if you're offering a rate and no one is taking you up on it, by definition, that's not the market rate". It might be in someone else's market, but not yours. The "market rate" for ipads was $499 for a long time, but that didn't mean HP could get $499 for their tablets.
- skgoa 9y ago
  It's the same issue as in the car market. The advertized numbers are wishful thinking. The final price on the deal is almost always better. But you don't see those numbers advertized, because those open positions/cars will be spotted quickly and thus the offer will be filled quickly. "Market rate" is a concept that only works when their is open outcry, meaning that offers and agreed deals are visible to other market participants.
- mistermann 9y ago
  If you're an employer in Canada, you just get together with your buddies, call up your local government official and "convince" him to launch a program where hundreds of thousands of minimum wage "Temporary" Foreign Workers (TFW's) are imported to fill the gap. And if you're a jealous high employer of skilled personnel, you just do the same, and legislation has just recently been passed so skilled workers can now be imported just like TFW's. Now, there will never be full employment across most of the job spectrum so salaries will never have to rise. Add in a top 3 in the world unaffordable housing market, and this is how you eliminate a middle class.
  - gozur88 9y ago
    I did find it odd we have an entire article on wages and no mention of immigration. People, particularly on the low end, are not going to get raises if you import new workers faster than the economy can absorb them.
killjoywashere 9y ago
I suspect the liberal arts majors in the C suites are waiting for AI to solve their labor problems. They don't understand how much labor is required to capture AI-caliber data.
Eridrus 9y ago
I wonder if the discussion of wages captures everything. Particularly for those we expect to "draw back in" to the labor force. Will a few more dollars an hour change things, or is there something about the nature of the positions that makes them unappealing to people out of the labor force? Also, companies do have a ceiling on how much they can pay without raising prices, and to the extent you want to pay people fairly, you would have to raise wages for all your employees.
brightball 9y ago
> Well, there may be unemployed people, but they're not willing to do those jobs at those rates. Yep. That is essentially the crux of it and also why there's a big trade off between unemployment vs a small basic income. With unemployment you collect while having free time and then lose that income stream as soon as you take the job, making the decision to take a job significantly less obvious. With a small (survival level) basic income, having a job means you make more money...period. It's an aspect of the equation that nobody wants to talk about. In low cost of living areas you almost have an incentive to collect unemployment for stretches because of it.
- Retric 9y ago
  Taking a low paying job can hurt future earnings, but generally I agree with you. I was once reviving enough unemployment that many full time jobs would have been a payout, at the same time unemployment was not even enough money to pay rent. However, taking a job to slow the bleeding would have been more appealing.
paulddraper 9y ago
> If you're offering a wage for months on end, and you can't fill the role, you aren't paying enough. Full stop. Right. But don't forget that it's possible for a wage to simulatenously too low and too high. It can be too low to higher anyone, but too high to be profitable to the employer. And in that case, the job is defunct.

Eric_WVGG 9y ago

… then why are employers struggling to fill positions, as per the article? Given the choice between toiling and not being able to make ends meet, or playing videogames and not being able to make ends meet, Americans are choosing Halo. That's not complicated.

KekDemaga 9y ago
How do they make money playing video games?
- Eric_WVGG 9y ago
  They don’t. So what?
  - KekDemaga 9y ago
    How do they live?
    - Eric_WVGG 9y ago
      https://en.m.wikipedia.org/wiki/Hikikomori https://en.m.wikipedia.org/wiki/Hikikomori http://www.theblaze.com/news/2017/04/24/the-number-of-millennials-living-with-their-parents-is-on-a-shocking-rise/ http://www.theblaze.com/news/2017/04/24/the-number-of-millen...

marcosdumay 9y ago

It is true, but it's begging the question. Instead of "why are people unemployed?", it just becomes "why are business not hiring?" Most of the replies are then trying to answer the second question, because the refraiming is very likely a good one.

awkwarddaturtle 9y ago

> It's weird to me that there are all kinds of wacky theories in this thread except for you with the obvious answer: the supply of workers exceeds demand so the price (their wage) is not rising. That's not why. Japan has had full employment for 20+ years. Their wages have steadily declined for 20+ years.