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Unemployment is so low and companies continue to complain that they can’t find anyone. The unspoken end of that sentence is they can’t find anyone at the wage t

by orev 8y ago

Unemployment is so low and companies continue to complain that they can’t find anyone. The unspoken end of that sentence is they can’t find anyone at the wage they are offering. It’s only a matter of time before companies will be forced to start increasing wages just so they can find people.

noja 8y ago
Very true, and we need to keep repeating this until this misinformation stops.
moorhosj 8y ago
Companies have been making that same complaint for 5 years, wages still stagnate.
- Mountain_Skies 8y ago
  It's possible that companies, being use to getting their way from the government, expects that their labor and wage woes will get soon get taken care of for them by government intervention in the labor market. If this is how they're viewing the issue, the have incentive to hold off on wage increases as long as possible so to not end up at a competitive disadvantage when their desired government policies get implemented. If those policies never actually come to be or are less effective than desired, then sooner or later some companies will try to gain a competitive advantage by offering higher wages. How long are employers willing to forego the ability to attract away labor from other employers with wage hikes is an unknown but as long as they believe the government will alter the labor market for them, they're unlikely to take a risk on wage increases. That they might be thinking this way is pure speculation on my part but seems plausible.
  - moorhosj 8y ago
    >as long as they believe the government will alter the labor market for them, they're unlikely to take a risk on wage increases. This wouldn't explain all of the times throughout history when companies did increase wages during times of economic growth and low unemployment. This sounds like taking something that looks like a market failure and trying to frame it as a governmental failure.
    - AstralStorm 8y ago
      Why not both? It can be both a market failure and governmental failure, either because it allowed it or because it is applying bandage solutions that actually do not work long term and not trying to figure out real ones. Alternatively it is bought by the actors causing the market failure. Just the exploitation of certain properties of the imperfect markets that actually exist is enough for the current situation to occur in absence of arbitrage. Market could be working exactly as modeled given a full model with big information inequality and low labour elasticity.
coldtea 8y ago
A lot of that unemployment is low because of tricks like counting people with part-time jobs forced on them (that might still work full time to not get fired) as properly employed, or anybody that gave up looking for a job as employed, or anybody that has some occasional gig in the last 6 months as employed and so on. Not because many people have steady, quality jobs.
- maxerickson 8y ago
  Those aren't tricks, they are the people doing the measuring making choices about what to measure. Maybe the press should focus on U6, who knows. (except U3 is preferred by employers because it more directly predicts the marginal slack in the labor force...)
  - coldtea 8y ago
    >Those aren't tricks, they are the people doing the measuring making choices about what to measure. Well, to make unemployment vanish by sleight of hand is a choice. That doesn't mean it's not also a trick. I used the more loaded word "trick" because I believe that they are human scum interested in hiding the problem, not people "making choices about what to measure" in order to better measure it.
    - maxerickson 8y ago
      It's a cool angry story, but they publish U6 on the same schedule as U3.
    - shittyadmin 8y ago
      > Well, to make unemployment vanish by sleight of hand is a choice. That doesn't mean it's not also a trick. If you look at labor force participation and underemployment you'll see those stats have remained the same or even improved in recent years. https://tradingeconomics.com/united-states/labor-force-participation-rate https://tradingeconomics.com/united-states/labor-force-parti... https://www.statista.com/statistics/205240/us-underemployment-rate/ https://www.statista.com/statistics/205240/us-underemploymen... http://www.stateofworkingamerica.org/charts/underemployment-education/ http://www.stateofworkingamerica.org/charts/underemployment-... Taking these into consideration that means unemployment dropping seems pretty good.
kylestlb 8y ago
Also, labor is relatively inelastic, if you are 'selling' yours. Switching jobs isn't like switching your brand of toothpaste. If workers could truly capitalize on the real value of their labor, nobody would stay at their job for more than 6 months.
hn_throwaway_99 8y ago
But companies can't increase wages if it makes them uncompetitive. I think a huge downward pressure on wages is the fact that more industries have moved into "winner take all" economics, so all of the also-rans face immense pressure to keep costs down in an attempt to compete. Consider the bloodbath in retail. Amazon possesses so many structural advantages at this point that other retail companies are forced to do everything they can to keep costs low. A raise in wages could very easily make them even more uncompetitive with Amazon.
- alex_anglin 8y ago
  Conversely, not having appropriate, enough or under-skilled employees makes them uncompetitive as well. In retail, consider Costco, who are known for paying decent wages and benefits. As a result of that, they have less shrink/theft and are able to compete. In technology, consider any big name tech firm. Chances are they understand what skills they need to be competitive and are willing to pay for them - creating upwards pressure for tech folks.
- nicoburns 8y ago
  Which is the hidden downside of free market economics. It incentivises exactly this kind of cost cutting, even when it isn't beenficial to society.
  - refurb 8y ago
    Downside? We wouldn’t have the level of wealth today if we didn’t become more efficient in our production (I.e. lower cost).
    - rainonmoon 8y ago
      The level of wealth we have is disproportionately assigned to the minority of people best able to exploit the majority of people. Obviously we can go back and forth on the specifics of how the world's current state of prosperity has benefits and harms, but to present that level of wealth as intrinsically beneficial is disingenuous.
nodesocket 8y ago
Right, and this actually indicates that the market is working and very robust and healthy. Companies will try and hire the most qualified candidates at the lowest cost possible. If a company needs to fill positions desperately enough they will increase their offers.
- snackbugs 8y ago
  It's helpful in this case to imagine that there is a majority of people who work in industries other than tech and finance.
  - nodesocket 8y ago
    I am very aware, moved out of SF for Tennessee.
rco8786 8y ago
> It’s only a matter of time before companies will be forced to start increasing wages just so they can find people. It’s been like 30+ years. When does the trickle begin?
- arcseco 8y ago
  In a closed labour market (one where the number of available workers remains stable) it would have begun rising already. Wages are artificially depressed using immigration. Like most markets, labour vs demand for labour is just a function of supply and demand. *Just to clarify, this issue is definitely more complicated than an S&D curve and it is not my intention for this issue to become mired in politics. However it's worth having a discussion about domestic wage stagnation and the decline of the middle class in the US, and how it relates to the past 30 years of trade liberalization and increased immigration rates.
  - rco8786 8y ago
    > Wages are artificially depressed using immigration. What an amazing and completely original scapegoat. Even if it were true, using a 7th grade economics to describe the entirety of U.S. employment economics has to be a joke, right?
    - exabrial 8y ago
      He's not completely incorrect though: Illegal immigration accounts for a significant portion of farm and construction labor in the southwest/midwest because it gets around pesky minimum wage and other labor laws. These are usually unskilled jobs however, so their effect on other wages is likely nonsignificant. Legal Immigration in general tends to grow wages as the GDP and investment increases.
      - rco8786 8y ago
        Right. illegal immigration likely does not effect these numbers in a significant way, and legal immigration raises wages. How is it not a scapegoat to say immigration is the cause of flat wages?
JumpCrisscross 8y ago
> It’s only a matter of time before companies will be forced to start increasing wages This article is from February. Wages, at that point, were increasing a little faster than inflation. They’re now increasing considerably faster than inflation outside manufacturing, which is confronting the twin headwinds of automation and export...erm...difficulties. Fortunately, a solid (and shrinking) minority of Americans work are exposed.
- markoman 8y ago
  Increasing considerably faster? Do you have a citation for this information with some specific numbers for 'considerably faster'?
  - JumpCrisscross 8y ago
    > Do you have a citation for this information with some specific numbers for 'considerably faster' From February 2009, the year after the crisis, through February 2018, when this article was published, average seasonally-adjusted hourly earnings of American private-sector employees rose by 2.2% per year [1][a]. From February through July, the same statistic rose at an annualized rate of 5.9% [b]. The former approximates inflation; the latter dramatically exceeds it. [1] https://fred.stlouisfed.org/series/CES0500000003 https://fred.stlouisfed.org/series/CES0500000003 [a] (26.74 / 22) ^ (1 / 9) - 1 [b] (27.05 / 26.74) ^ (1 / (1 / 5)) - 1
    - andrepd 8y ago
      Yes, if you cherry-pick your baseline at the bottom of the worst economic catastrophe of the last 80 years, then things don't look too shabby.
      - JumpCrisscross 8y ago
        > if you cherry-pick your baseline at the bottom of the worst economic catastrophe of the last 80 years The 2007-09 "bear market...lasted from October 9th 2007 to March 9th 2009" [1]. Using the same data as before [2] we find similarly-paltry 2.2% annualized wage growth between October 2007 and October 2017 [a]. Your counterargument is not only inaccurate, it also makes no sense. My argument relies on the former number being smaller than the latter. Picking a low baseline presents my evidence in its most conservative form. [1] https://en.wikipedia.org/wiki/United_States_bear_market_of_2007–09 https://en.wikipedia.org/wiki/United_States_bear_market_of_2... [2] https://fred.stlouisfed.org/series/CES0500000003 https://fred.stlouisfed.org/series/CES0500000003 [a] (26.47 / 21.06) ^ (1 / 10) - 1
EduardoBautista 8y ago
Increasing wages will just take employees from somewhere else. It will not just magically increase the supply of workers in the country by a significant amount.
- stevenicr 8y ago
  'a significant amount' I suppose depends on the location and situation. Just adding 12,000 employees to our medium city would certainly be a big impact for several businesses here. Certainly if everyone doubled the wages here more people would come from other states, and more people would come from an hour away that would not otherwise. It would also bring a lot of people to the workforce that are already here but not willing to work for half of what it costs to live. Whether that is considered magical or not I suppose depends on where you stand as an employer who is losing money because they are not able to be open their posted hours (steak and shake here for example) - or an employee willing to work, but literally can not afford rent, food and transportation, or someone who is being objective and not really affected by any of these things. Everything is booming indeed, rents, cost of housing and cars, taxes. I think a lot of people want to participate that can not afford to.
a3n 8y ago
≥ Unemployment is so low and companies continue to complain that they can’t find anyone. The unspoken end of that sentence is they can’t find anyone at the wage they are offering. But that's the requirement, apparently. At that wage. Corporations reportedly enjoy a stellar recovery from the great recession. So they can go quite some time without raising wages; it's worked very well for them so far, by demonstration.

by orev 8y ago

noja 8y ago

Very true, and we need to keep repeating this until this misinformation stops.

moorhosj 8y ago

Companies have been making that same complaint for 5 years, wages still stagnate.

Mountain_Skies 8y ago
It's possible that companies, being use to getting their way from the government, expects that their labor and wage woes will get soon get taken care of for them by government intervention in the labor market. If this is how they're viewing the issue, the have incentive to hold off on wage increases as long as possible so to not end up at a competitive disadvantage when their desired government policies get implemented. If those policies never actually come to be or are less effective than desired, then sooner or later some companies will try to gain a competitive advantage by offering higher wages. How long are employers willing to forego the ability to attract away labor from other employers with wage hikes is an unknown but as long as they believe the government will alter the labor market for them, they're unlikely to take a risk on wage increases. That they might be thinking this way is pure speculation on my part but seems plausible.
- moorhosj 8y ago
  >as long as they believe the government will alter the labor market for them, they're unlikely to take a risk on wage increases. This wouldn't explain all of the times throughout history when companies did increase wages during times of economic growth and low unemployment. This sounds like taking something that looks like a market failure and trying to frame it as a governmental failure.
  - AstralStorm 8y ago
    Why not both? It can be both a market failure and governmental failure, either because it allowed it or because it is applying bandage solutions that actually do not work long term and not trying to figure out real ones. Alternatively it is bought by the actors causing the market failure. Just the exploitation of certain properties of the imperfect markets that actually exist is enough for the current situation to occur in absence of arbitrage. Market could be working exactly as modeled given a full model with big information inequality and low labour elasticity.

coldtea 8y ago

A lot of that unemployment is low because of tricks like counting people with part-time jobs forced on them (that might still work full time to not get fired) as properly employed, or anybody that gave up looking for a job as employed, or anybody that has some occasional gig in the last 6 months as employed and so on. Not because many people have steady, quality jobs.

maxerickson 8y ago
Those aren't tricks, they are the people doing the measuring making choices about what to measure. Maybe the press should focus on U6, who knows. (except U3 is preferred by employers because it more directly predicts the marginal slack in the labor force...)
- coldtea 8y ago
  >Those aren't tricks, they are the people doing the measuring making choices about what to measure. Well, to make unemployment vanish by sleight of hand is a choice. That doesn't mean it's not also a trick. I used the more loaded word "trick" because I believe that they are human scum interested in hiding the problem, not people "making choices about what to measure" in order to better measure it.
  - maxerickson 8y ago
    It's a cool angry story, but they publish U6 on the same schedule as U3.
  - shittyadmin 8y ago
    > Well, to make unemployment vanish by sleight of hand is a choice. That doesn't mean it's not also a trick. If you look at labor force participation and underemployment you'll see those stats have remained the same or even improved in recent years. https://tradingeconomics.com/united-states/labor-force-participation-rate https://tradingeconomics.com/united-states/labor-force-parti... https://www.statista.com/statistics/205240/us-underemployment-rate/ https://www.statista.com/statistics/205240/us-underemploymen... http://www.stateofworkingamerica.org/charts/underemployment-education/ http://www.stateofworkingamerica.org/charts/underemployment-... Taking these into consideration that means unemployment dropping seems pretty good.

kylestlb 8y ago

Also, labor is relatively inelastic, if you are 'selling' yours. Switching jobs isn't like switching your brand of toothpaste. If workers could truly capitalize on the real value of their labor, nobody would stay at their job for more than 6 months.

hn_throwaway_99 8y ago

But companies can't increase wages if it makes them uncompetitive. I think a huge downward pressure on wages is the fact that more industries have moved into "winner take all" economics, so all of the also-rans face immense pressure to keep costs down in an attempt to compete. Consider the bloodbath in retail. Amazon possesses so many structural advantages at this point that other retail companies are forced to do everything they can to keep costs low. A raise in wages could very easily make them even more uncompetitive with Amazon.

alex_anglin 8y ago
Conversely, not having appropriate, enough or under-skilled employees makes them uncompetitive as well. In retail, consider Costco, who are known for paying decent wages and benefits. As a result of that, they have less shrink/theft and are able to compete. In technology, consider any big name tech firm. Chances are they understand what skills they need to be competitive and are willing to pay for them - creating upwards pressure for tech folks.
nicoburns 8y ago
Which is the hidden downside of free market economics. It incentivises exactly this kind of cost cutting, even when it isn't beenficial to society.
- refurb 8y ago
  Downside? We wouldn’t have the level of wealth today if we didn’t become more efficient in our production (I.e. lower cost).
  - rainonmoon 8y ago
    The level of wealth we have is disproportionately assigned to the minority of people best able to exploit the majority of people. Obviously we can go back and forth on the specifics of how the world's current state of prosperity has benefits and harms, but to present that level of wealth as intrinsically beneficial is disingenuous.

nodesocket 8y ago

Right, and this actually indicates that the market is working and very robust and healthy. Companies will try and hire the most qualified candidates at the lowest cost possible. If a company needs to fill positions desperately enough they will increase their offers.

snackbugs 8y ago
It's helpful in this case to imagine that there is a majority of people who work in industries other than tech and finance.
- nodesocket 8y ago
  I am very aware, moved out of SF for Tennessee.

rco8786 8y ago

> It’s only a matter of time before companies will be forced to start increasing wages just so they can find people. It’s been like 30+ years. When does the trickle begin?

arcseco 8y ago
In a closed labour market (one where the number of available workers remains stable) it would have begun rising already. Wages are artificially depressed using immigration. Like most markets, labour vs demand for labour is just a function of supply and demand. *Just to clarify, this issue is definitely more complicated than an S&D curve and it is not my intention for this issue to become mired in politics. However it's worth having a discussion about domestic wage stagnation and the decline of the middle class in the US, and how it relates to the past 30 years of trade liberalization and increased immigration rates.
- rco8786 8y ago
  > Wages are artificially depressed using immigration. What an amazing and completely original scapegoat. Even if it were true, using a 7th grade economics to describe the entirety of U.S. employment economics has to be a joke, right?
  - exabrial 8y ago
    He's not completely incorrect though: Illegal immigration accounts for a significant portion of farm and construction labor in the southwest/midwest because it gets around pesky minimum wage and other labor laws. These are usually unskilled jobs however, so their effect on other wages is likely nonsignificant. Legal Immigration in general tends to grow wages as the GDP and investment increases.
    - rco8786 8y ago
      Right. illegal immigration likely does not effect these numbers in a significant way, and legal immigration raises wages. How is it not a scapegoat to say immigration is the cause of flat wages?

JumpCrisscross 8y ago

> It’s only a matter of time before companies will be forced to start increasing wages This article is from February. Wages, at that point, were increasing a little faster than inflation. They’re now increasing considerably faster than inflation outside manufacturing, which is confronting the twin headwinds of automation and export...erm...difficulties. Fortunately, a solid (and shrinking) minority of Americans work are exposed.

markoman 8y ago
Increasing considerably faster? Do you have a citation for this information with some specific numbers for 'considerably faster'?
- JumpCrisscross 8y ago
  > Do you have a citation for this information with some specific numbers for 'considerably faster' From February 2009, the year after the crisis, through February 2018, when this article was published, average seasonally-adjusted hourly earnings of American private-sector employees rose by 2.2% per year [1][a]. From February through July, the same statistic rose at an annualized rate of 5.9% [b]. The former approximates inflation; the latter dramatically exceeds it. [1] https://fred.stlouisfed.org/series/CES0500000003 https://fred.stlouisfed.org/series/CES0500000003 [a] (26.74 / 22) ^ (1 / 9) - 1 [b] (27.05 / 26.74) ^ (1 / (1 / 5)) - 1
  - andrepd 8y ago
    Yes, if you cherry-pick your baseline at the bottom of the worst economic catastrophe of the last 80 years, then things don't look too shabby.
    - JumpCrisscross 8y ago
      > if you cherry-pick your baseline at the bottom of the worst economic catastrophe of the last 80 years The 2007-09 "bear market...lasted from October 9th 2007 to March 9th 2009" [1]. Using the same data as before [2] we find similarly-paltry 2.2% annualized wage growth between October 2007 and October 2017 [a]. Your counterargument is not only inaccurate, it also makes no sense. My argument relies on the former number being smaller than the latter. Picking a low baseline presents my evidence in its most conservative form. [1] https://en.wikipedia.org/wiki/United_States_bear_market_of_2007–09 https://en.wikipedia.org/wiki/United_States_bear_market_of_2... [2] https://fred.stlouisfed.org/series/CES0500000003 https://fred.stlouisfed.org/series/CES0500000003 [a] (26.47 / 21.06) ^ (1 / 10) - 1

EduardoBautista 8y ago

Increasing wages will just take employees from somewhere else. It will not just magically increase the supply of workers in the country by a significant amount.

stevenicr 8y ago
'a significant amount' I suppose depends on the location and situation. Just adding 12,000 employees to our medium city would certainly be a big impact for several businesses here. Certainly if everyone doubled the wages here more people would come from other states, and more people would come from an hour away that would not otherwise. It would also bring a lot of people to the workforce that are already here but not willing to work for half of what it costs to live. Whether that is considered magical or not I suppose depends on where you stand as an employer who is losing money because they are not able to be open their posted hours (steak and shake here for example) - or an employee willing to work, but literally can not afford rent, food and transportation, or someone who is being objective and not really affected by any of these things. Everything is booming indeed, rents, cost of housing and cars, taxes. I think a lot of people want to participate that can not afford to.

a3n 8y ago

≥ Unemployment is so low and companies continue to complain that they can’t find anyone. The unspoken end of that sentence is they can’t find anyone at the wage they are offering. But that's the requirement, apparently. At that wage. Corporations reportedly enjoy a stellar recovery from the great recession. So they can go quite some time without raising wages; it's worked very well for them so far, by demonstration.