9 ms·

Unemployment Is So 2009: Labor Shortage Gives Workers an Edge

69 points by dpflan 9y ago

adventured 9y ago
"Over the next 20 to 25 years, a labor shortage is going to put a binding constraint on growth." Over the next 20-25 years the labor shortage is going to spur vast new investment into productivity gains after ~15 years of relatively weak productivity growth. Labor shortage is only a problem if you fail to boost productivity. Ideally labor and population growth slows or flatlines while productivity soars thanks to robotics, AI, general automation improvements, etc. - with the end result being, finally, another big leap forward in the standard of living (particularly for the bottom 3/4). The absolute last thing the US needs is more people as we enter a potential boom age for automation.
- s73ver_ 9y ago
  " with the end result being, finally, another big leap forward in the standard of living (particularly for the bottom 3/4)" Only if those people still have jobs.
frgtpsswrdlame 9y ago
Here's a link around the paywall: https://outline.com/7XaW7b https://outline.com/7XaW7b And can I say I hate this article? I hate this article. Take this: In 2008, in the midst of the recession, the average hourly pay of production and nonsupervisory workers tracked by the Bureau of Labor Statistics — those who toil at a cash register or on a shop floor — was 10 percent below its 1973 peak after accounting for inflation. Since then, wages have regained virtually all of that ground. So we've only almost recovered from the recession on this metric and we've almost broken even with how good workers were doing in 1973? That sounds like a pretty shit recovery to me. More than seven years after the recession ended and the job market began to bounce back, only 60 percent of Americans over the age of 16 are working, about 2.5 percentage points fewer than just before the economy took a dive. Here's another metric where we haven't even made it back to '08 levels! And the answer requires removing a roadblock standing in the way of this potential golden age: Even if demand for workers is rising, it may not be for the kind of workers on offer, those sitting on the sidelines of the labor force. “The jobs in demand are more skilled than the workers we have,” Professor Krueger told me. Because the article won't describe a solution to this "roadblock" can we all take a guess at what it's going to be. I'll give you two choices: (A) Encouraging firms to hire under-developed american workers and train them in-house to do these jobs. (B) Loosen immigration restrictions so we can hire cheap overseas labor. On the supply side, Professor Kearney and Professor Abraham suggest that being cautious about raising the minimum wage, which could price some workers out of jobs, and reforming disability insurance to encourage recipients to seek jobs. Oh for fucks sake. So simultaneously we are about to enter a labor shortage but we can't raise the minimum wage? A labor shortage is the best time to raise the minimum wage! And of course rather than encouraging any one of our numerous solutions we definitely need to cut disability. This is the grossest bit of neoliberal propaganda I've seen in a while.
- mlillie 9y ago
  Yep, completely agree. Especially love the last point. A labor shortage sounds like the perfect time to implement a wider social safety net. But this article (not to mention the interviewees) displays a clear bias against labor.
- ubu7737 9y ago
  I don't really agree. It's not like raising the minimum wage will train workers for tasks they can't already perform. The shortage of laborers in specialized task domains is endemic to our changing times, and I think framing the challenge as an old-school labor rights issue is just... terrible and stupid.
  - frgtpsswrdlame 9y ago
    That's just ahistorical, there have always been labor shortages through history, especially since industrialization. That's what makes it an old-school labor challenge. How do we get firms to pay for training? Well probably the same way we got them to do 8 hour days, overtime, paid vacation, weekends, etc.
3pt14159 9y ago
I remember reading articles like this in early 2007. Just look at this table: http://www.multpl.com/unemployment/table http://www.multpl.com/unemployment/table A recession is coming soon. Prolonged low unemployment rates are a pretty reliable sign that the economy is overheating. So are pricy Forward P/E ratios. So are property bubbles. https://www.economist.com/blogs/graphicdetail/2016/08/daily-chart-20 https://www.economist.com/blogs/graphicdetail/2016/08/daily-... Also, I disagree that we have a labor shortage. I think we have a skill shortage. If we had double the machine learning experts we might need half the number of commercial drivers, and there are a lot more drivers out there than AI developers.
- maxxxxx 9y ago
  "I think we have a skill shortage. " To be more precise we have a lack of will to train people. The big companies sit on piles of cash, complain about worker shortage but they are not willing to invest in their workers.
  - pm90 9y ago
    Its just not as simple as that. Most people wouldn't be willing to go through all that retraining unless they had a compelling reason to do so. I agree that the environment could be more conducive to encourage people to get education; many companies do have that in place.
    - ForRealsies 9y ago
      How can government motivate people?
      - malandrew 9y ago
        Two questions and one observation: (1) Why is it the government's job to motivate people? Shouldn't people be motivated by their own self-interest? (2) The rise of bigger government and a welfare state might even be contributing to the problem, but debasing the impetus to train. Some carefully considered welfare can provide relief to an acute problem, but long term welfare is counterproductive.
TheAdamAndChe 9y ago
> How to get [the workers] back [into the workforce]? > Give high-quality education, childcare, tax credits, and don't raise the minimum wage. Wow, these authors just don't get it. Quality of life for the lower and lower-middle class has been declining for decades. Worker leverage is at an all-time low. Most households require two wage-earners to live any sort of quality of life. Jobs are becoming more and more centralized to a handful of urban centers around the country, and jobs that don't require high levels of education have mostly been outsourced. Socioeconomic mobility is declining massively. Then the authors imply that instead of raising wages or shifting the worker/employer leverage balance, they just want to shuffle more of them through school? Why not create an economic environment where businesses have an incentive to give an increasing quality of life for its workers over time? Instead of shuffling more workers through a broken education system, why not train & promote internally? Why not promote & create jobs that don't require decades of education and experience to live a comfortable life? Why not do something about our anti-trust and global trade laws so that more areas than big urban centers experience economic growth? Uneducated people in our country shouldn't be pushed out of our economy. Edit: To those downvoting me, could you please explain why? If I'm wrong in any way, I'd love to learn from your view on it.
- mlillie 9y ago
  They're neoliberal Bootstrap Boys who just love the idea that their own hard work in earning "skills" got them that $100k salary, and that anyone else can, too! They'd rather not face the facts of privilege in this country.
- dvt 9y ago
  Meta: I'm also wondering why you're being downvoted. I'm noticing brigading-style downvoting recently on HN (which is the main reason I avoid the cesspool of Reddit). Sad to see HN head in the same direction.
  - gozur88 9y ago
    Yes. HN is becoming more like Reddit as time goes on. It was probably inevitable as the site became less focused on startups. EDIT: I should probably add that's just in relation to the voting. The moderators keep the site from getting as nasty as Reddit, and as long as they do I'll like HN better.
rdtsc 9y ago
What is going on, I was told right here by the bright armchair economists of HN that jobs are _never_ coming back, it's over and done. > Professor Krueger suggests that the increase in opioid prescriptions could account for about 20 percent of the decline in men’s labor-force participation from 1999 to 2015, and 25 percent of the observed decline in women’s labor-force participation. Joking aside. That is a scary statistic. Unless you've been through West Virginia or Rust Belt states, then it is believable.
- chrisbennet 9y ago
  >Professor Krueger suggests that the increase in opioid prescriptions could account for about 20 percent of the decline in men’s labor-force participation from 1999 to 2015, and 25 percent of the observed decline in women’s labor-force participation. It seems likely that lack of work and resulting depression would drive drug use as well. Depressed people often "self medicate".
- jabv 9y ago
  A friend was talking to a young girl in a school in WV. Friend: What would you like to do when you grow up? Girl: I wanna draw, like my daddy. Friend: Wonderful, is your daddy an artist? Girl: Naw, he draws a check every month. (ie, her dad receives some type of welfare check every month (perhaps disability, unemployment, etc.), and this is what she aspires to do)
NumberSix 9y ago
Ah! A Labor Shortage! But even as they forecast a brighter future for the working class, these economists also worry that the new age of tight labor markets and rising wages will create a different sort of challenge. As Alan B. Krueger, a Princeton University economist who was the chief economic adviser to President Barack Obama, put it, “We are heading for a labor shortage.” Emphasis on labor shortage added. Now where have I heard that before? Oh, yes: 2003 (depths of a recession) http://aoaconsulting.com/yahoo_site_admin/assets/docs/Will_There_Really_Be_A_Labor_Shortage.190155250.pdf http://aoaconsulting.com/yahoo_site_admin/assets/docs/Will_T... http://knowledge.wharton.upenn.edu/article/what-labor-shortage-debunking-a-popular-myth/ http://knowledge.wharton.upenn.edu/article/what-labor-shorta... 2004 https://www.fastcompany.com/50595/labor-shortage-myth https://www.fastcompany.com/50595/labor-shortage-myth 2005 https://www.shrm.org/hr-today/news/hr-magazine/Pages/0305covstory.aspx https://www.shrm.org/hr-today/news/hr-magazine/Pages/0305cov... 2010 (depths of Great Recession) https://www.cbsnews.com/news/skilled-labor-shortage-frustrates-employers/ https://www.cbsnews.com/news/skilled-labor-shortage-frustrat... https://www.tlnt.com/a-coming-labor-shortage-the-evidence-just-doesnt-support-it/ https://www.tlnt.com/a-coming-labor-shortage-the-evidence-ju... 2012 https://secure.marketwatch.com/story/the-looming-us-labor-shortage-2012-03-14 https://secure.marketwatch.com/story/the-looming-us-labor-sh... 2013 http://businessroundtable.org/media/blog/the-u.s.-skills-gap-real-and-growing http://businessroundtable.org/media/blog/the-u.s.-skills-gap... https://www.us-immigration.com/us-immigration-news/us-immigration/labor-shortage-increases-demand-for-immigration-reform/ https://www.us-immigration.com/us-immigration-news/us-immigr... http://www.nasdaq.com/article/weekly-review-the-upcoming-labor-shortage-cm248466 http://www.nasdaq.com/article/weekly-review-the-upcoming-lab... http://money.cnn.com/2013/06/13/news/economy/trucker-shortage/index.html http://money.cnn.com/2013/06/13/news/economy/trucker-shortag... 2015 https://tickertape.tdameritrade.com/investing/2015/06/skilled-unskilled-labor-shortage-100228 https://tickertape.tdameritrade.com/investing/2015/06/skille... https://www.tradesmeninternational.com/news-events/the-construction-labor-shortage-where-did-all-the-skilled-labor-go/ https://www.tradesmeninternational.com/news-events/the-const... Where did all those construction workers laid off at the end of the housing bubble go? It seems that for employers and their hirelings, there is always a labor shortage or a looming labor shortage.
- RobertoG 9y ago
creaghpatr 9y ago
>For instance, restricting immigration is not the smartest policy when workers are scarce. >Raising barriers to imports — inviting retaliation from trading partners — is exactly the wrong approach, especially now that the workers in cheap labor markets that put such pressure on American jobs promise to become big consumers of things made in America. Regular NYT readers will have guessed where the article was going right from the title's code word "labor shortage".
- jrs95 9y ago
  >Raising barriers to imports — inviting retaliation from trading partners — is exactly the wrong approach, especially now that the workers in cheap labor markets that put such pressure on American jobs promise to become big consumers of things made in America. Stop paying people in America to make things so that people will buy stuff made by Americans...makes sense to me.
ng12 9y ago
> For instance, restricting immigration is not the smartest policy when workers are scarce. Says who? God forbid a country put it's citizens above the holy dollar.
- gozur88 9y ago
  I'm with you. Labor shortages are what incentivize business to train people and pay more. You can't simultaneously complain about worker pay on the bottom end and advocate policies that reduce the value of their labor.
- tosser350 9y ago
  and yet people wonder why middle class wages and living standard have dropped. Letting 11+ million unskilled workers into the country who have no protection under federal labor laws is a big part. I'm always amazed how the left has been brainwashed to defend mega-corporations on illegal immigration
jellicle 9y ago
> Workers lose ground for 50 years straight > Corporate profits now higher than ever before in human history > Recent news says workers may lose slightly less ground this year than in previous years > Panic! Quick, raise interest rates and chop off the economy at the knees! Quick, import more foreign workers to keep wages low!

69 points by dpflan 9y ago

"Over the next 20 to 25 years, a labor shortage is going to put a binding constraint on growth." Over the next 20-25 years the labor shortage is going to spur vast new investment into productivity gains after ~15 years of relatively weak productivity growth. Labor shortage is only a problem if you fail to boost productivity. Ideally labor and population growth slows or flatlines while productivity soars thanks to robotics, AI, general automation improvements, etc. - with the end result being, finally, another big leap forward in the standard of living (particularly for the bottom 3/4). The absolute last thing the US needs is more people as we enter a potential boom age for automation.

s73ver_ 9y ago
" with the end result being, finally, another big leap forward in the standard of living (particularly for the bottom 3/4)" Only if those people still have jobs.

frgtpsswrdlame 9y ago

Here's a link around the paywall: https://outline.com/7XaW7b https://outline.com/7XaW7b And can I say I hate this article? I hate this article. Take this: In 2008, in the midst of the recession, the average hourly pay of production and nonsupervisory workers tracked by the Bureau of Labor Statistics — those who toil at a cash register or on a shop floor — was 10 percent below its 1973 peak after accounting for inflation. Since then, wages have regained virtually all of that ground. So we've only almost recovered from the recession on this metric and we've almost broken even with how good workers were doing in 1973? That sounds like a pretty shit recovery to me. More than seven years after the recession ended and the job market began to bounce back, only 60 percent of Americans over the age of 16 are working, about 2.5 percentage points fewer than just before the economy took a dive. Here's another metric where we haven't even made it back to '08 levels! And the answer requires removing a roadblock standing in the way of this potential golden age: Even if demand for workers is rising, it may not be for the kind of workers on offer, those sitting on the sidelines of the labor force. “The jobs in demand are more skilled than the workers we have,” Professor Krueger told me. Because the article won't describe a solution to this "roadblock" can we all take a guess at what it's going to be. I'll give you two choices: (A) Encouraging firms to hire under-developed american workers and train them in-house to do these jobs. (B) Loosen immigration restrictions so we can hire cheap overseas labor. On the supply side, Professor Kearney and Professor Abraham suggest that being cautious about raising the minimum wage, which could price some workers out of jobs, and reforming disability insurance to encourage recipients to seek jobs. Oh for fucks sake. So simultaneously we are about to enter a labor shortage but we can't raise the minimum wage? A labor shortage is the best time to raise the minimum wage! And of course rather than encouraging any one of our numerous solutions we definitely need to cut disability. This is the grossest bit of neoliberal propaganda I've seen in a while.

mlillie 9y ago
Yep, completely agree. Especially love the last point. A labor shortage sounds like the perfect time to implement a wider social safety net. But this article (not to mention the interviewees) displays a clear bias against labor.
ubu7737 9y ago
I don't really agree. It's not like raising the minimum wage will train workers for tasks they can't already perform. The shortage of laborers in specialized task domains is endemic to our changing times, and I think framing the challenge as an old-school labor rights issue is just... terrible and stupid.
- frgtpsswrdlame 9y ago
  That's just ahistorical, there have always been labor shortages through history, especially since industrialization. That's what makes it an old-school labor challenge. How do we get firms to pay for training? Well probably the same way we got them to do 8 hour days, overtime, paid vacation, weekends, etc.

3pt14159 9y ago

I remember reading articles like this in early 2007. Just look at this table: http://www.multpl.com/unemployment/table http://www.multpl.com/unemployment/table A recession is coming soon. Prolonged low unemployment rates are a pretty reliable sign that the economy is overheating. So are pricy Forward P/E ratios. So are property bubbles. https://www.economist.com/blogs/graphicdetail/2016/08/daily-chart-20 https://www.economist.com/blogs/graphicdetail/2016/08/daily-... Also, I disagree that we have a labor shortage. I think we have a skill shortage. If we had double the machine learning experts we might need half the number of commercial drivers, and there are a lot more drivers out there than AI developers.

maxxxxx 9y ago
"I think we have a skill shortage. " To be more precise we have a lack of will to train people. The big companies sit on piles of cash, complain about worker shortage but they are not willing to invest in their workers.
- pm90 9y ago
  Its just not as simple as that. Most people wouldn't be willing to go through all that retraining unless they had a compelling reason to do so. I agree that the environment could be more conducive to encourage people to get education; many companies do have that in place.
  - ForRealsies 9y ago
    How can government motivate people?
    - malandrew 9y ago
      Two questions and one observation: (1) Why is it the government's job to motivate people? Shouldn't people be motivated by their own self-interest? (2) The rise of bigger government and a welfare state might even be contributing to the problem, but debasing the impetus to train. Some carefully considered welfare can provide relief to an acute problem, but long term welfare is counterproductive.

TheAdamAndChe 9y ago

> How to get [the workers] back [into the workforce]? > Give high-quality education, childcare, tax credits, and don't raise the minimum wage. Wow, these authors just don't get it. Quality of life for the lower and lower-middle class has been declining for decades. Worker leverage is at an all-time low. Most households require two wage-earners to live any sort of quality of life. Jobs are becoming more and more centralized to a handful of urban centers around the country, and jobs that don't require high levels of education have mostly been outsourced. Socioeconomic mobility is declining massively. Then the authors imply that instead of raising wages or shifting the worker/employer leverage balance, they just want to shuffle more of them through school? Why not create an economic environment where businesses have an incentive to give an increasing quality of life for its workers over time? Instead of shuffling more workers through a broken education system, why not train & promote internally? Why not promote & create jobs that don't require decades of education and experience to live a comfortable life? Why not do something about our anti-trust and global trade laws so that more areas than big urban centers experience economic growth? Uneducated people in our country shouldn't be pushed out of our economy. Edit: To those downvoting me, could you please explain why? If I'm wrong in any way, I'd love to learn from your view on it.

mlillie 9y ago
They're neoliberal Bootstrap Boys who just love the idea that their own hard work in earning "skills" got them that $100k salary, and that anyone else can, too! They'd rather not face the facts of privilege in this country.
dvt 9y ago
Meta: I'm also wondering why you're being downvoted. I'm noticing brigading-style downvoting recently on HN (which is the main reason I avoid the cesspool of Reddit). Sad to see HN head in the same direction.
- gozur88 9y ago
  Yes. HN is becoming more like Reddit as time goes on. It was probably inevitable as the site became less focused on startups. EDIT: I should probably add that's just in relation to the voting. The moderators keep the site from getting as nasty as Reddit, and as long as they do I'll like HN better.

rdtsc 9y ago

What is going on, I was told right here by the bright armchair economists of HN that jobs are _never_ coming back, it's over and done. > Professor Krueger suggests that the increase in opioid prescriptions could account for about 20 percent of the decline in men’s labor-force participation from 1999 to 2015, and 25 percent of the observed decline in women’s labor-force participation. Joking aside. That is a scary statistic. Unless you've been through West Virginia or Rust Belt states, then it is believable.

chrisbennet 9y ago
>Professor Krueger suggests that the increase in opioid prescriptions could account for about 20 percent of the decline in men’s labor-force participation from 1999 to 2015, and 25 percent of the observed decline in women’s labor-force participation. It seems likely that lack of work and resulting depression would drive drug use as well. Depressed people often "self medicate".
jabv 9y ago
A friend was talking to a young girl in a school in WV. Friend: What would you like to do when you grow up? Girl: I wanna draw, like my daddy. Friend: Wonderful, is your daddy an artist? Girl: Naw, he draws a check every month. (ie, her dad receives some type of welfare check every month (perhaps disability, unemployment, etc.), and this is what she aspires to do)

NumberSix 9y ago

Ah! A Labor Shortage! But even as they forecast a brighter future for the working class, these economists also worry that the new age of tight labor markets and rising wages will create a different sort of challenge. As Alan B. Krueger, a Princeton University economist who was the chief economic adviser to President Barack Obama, put it, “We are heading for a labor shortage.” Emphasis on labor shortage added. Now where have I heard that before? Oh, yes: 2003 (depths of a recession) http://aoaconsulting.com/yahoo_site_admin/assets/docs/Will_There_Really_Be_A_Labor_Shortage.190155250.pdf http://aoaconsulting.com/yahoo_site_admin/assets/docs/Will_T... http://knowledge.wharton.upenn.edu/article/what-labor-shortage-debunking-a-popular-myth/ http://knowledge.wharton.upenn.edu/article/what-labor-shorta... 2004 https://www.fastcompany.com/50595/labor-shortage-myth https://www.fastcompany.com/50595/labor-shortage-myth 2005 https://www.shrm.org/hr-today/news/hr-magazine/Pages/0305covstory.aspx https://www.shrm.org/hr-today/news/hr-magazine/Pages/0305cov... 2010 (depths of Great Recession) https://www.cbsnews.com/news/skilled-labor-shortage-frustrates-employers/ https://www.cbsnews.com/news/skilled-labor-shortage-frustrat... https://www.tlnt.com/a-coming-labor-shortage-the-evidence-just-doesnt-support-it/ https://www.tlnt.com/a-coming-labor-shortage-the-evidence-ju... 2012 https://secure.marketwatch.com/story/the-looming-us-labor-shortage-2012-03-14 https://secure.marketwatch.com/story/the-looming-us-labor-sh... 2013 http://businessroundtable.org/media/blog/the-u.s.-skills-gap-real-and-growing http://businessroundtable.org/media/blog/the-u.s.-skills-gap... https://www.us-immigration.com/us-immigration-news/us-immigration/labor-shortage-increases-demand-for-immigration-reform/ https://www.us-immigration.com/us-immigration-news/us-immigr... http://www.nasdaq.com/article/weekly-review-the-upcoming-labor-shortage-cm248466 http://www.nasdaq.com/article/weekly-review-the-upcoming-lab... http://money.cnn.com/2013/06/13/news/economy/trucker-shortage/index.html http://money.cnn.com/2013/06/13/news/economy/trucker-shortag... 2015 https://tickertape.tdameritrade.com/investing/2015/06/skilled-unskilled-labor-shortage-100228 https://tickertape.tdameritrade.com/investing/2015/06/skille... https://www.tradesmeninternational.com/news-events/the-construction-labor-shortage-where-did-all-the-skilled-labor-go/ https://www.tradesmeninternational.com/news-events/the-const... Where did all those construction workers laid off at the end of the housing bubble go? It seems that for employers and their hirelings, there is always a labor shortage or a looming labor shortage.

RobertoG 9y ago

creaghpatr 9y ago

>For instance, restricting immigration is not the smartest policy when workers are scarce. >Raising barriers to imports — inviting retaliation from trading partners — is exactly the wrong approach, especially now that the workers in cheap labor markets that put such pressure on American jobs promise to become big consumers of things made in America. Regular NYT readers will have guessed where the article was going right from the title's code word "labor shortage".

jrs95 9y ago
>Raising barriers to imports — inviting retaliation from trading partners — is exactly the wrong approach, especially now that the workers in cheap labor markets that put such pressure on American jobs promise to become big consumers of things made in America. Stop paying people in America to make things so that people will buy stuff made by Americans...makes sense to me.

ng12 9y ago

> For instance, restricting immigration is not the smartest policy when workers are scarce. Says who? God forbid a country put it's citizens above the holy dollar.

gozur88 9y ago
I'm with you. Labor shortages are what incentivize business to train people and pay more. You can't simultaneously complain about worker pay on the bottom end and advocate policies that reduce the value of their labor.
tosser350 9y ago
and yet people wonder why middle class wages and living standard have dropped. Letting 11+ million unskilled workers into the country who have no protection under federal labor laws is a big part. I'm always amazed how the left has been brainwashed to defend mega-corporations on illegal immigration

jellicle 9y ago

> Workers lose ground for 50 years straight > Corporate profits now higher than ever before in human history > Recent news says workers may lose slightly less ground this year than in previous years > Panic! Quick, raise interest rates and chop off the economy at the knees! Quick, import more foreign workers to keep wages low!