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> Not every labor shortage problem is solved by adjusting compensation levels upwards. Quite literally all shortages are solved by rising price. After all, the

> Not every labor shortage problem is solved by adjusting compensation levels upwards. Quite literally all shortages are solved by rising price. After all, the formal definition of a shortage is "a situation where an external mechanism, such as government intervention, prevents price from rising". If the price can rise, then a shortage cannot be. Which is the case here. If you have the budget for $1m/year compensation, it's yours to offer. Think about it this way: If there was only one person in the world capable of being a data scientist, each company in need of a data scientist would increase their offers to try and attract this person to their company. But no company in existence has an unlimited budget. Eventually all companies will be priced out of the market except for the company who ultimately employs this person. Since the other companies stop looking for data scientists beyond a certain price, the one position that remains in the market is perfectly filled with the one person available to do such work. To put it another way: No matter how much you want one, there isn't a shortage of Ferraris because you cannot afford one. You simply aren't in the market for one in the first place. Everyone who is in the market for a Ferrari can have one. Likewise, everyone who is in the market for a data scientist can have one. The mid-level exec with a data science poster on his wall, but a small budget for such work, is no more in the market for a data scientist than a teenager with a Ferrari poster on his wall is in the market for a Ferrari. That's just hopes and dreams. They don't count as anything more.

pyrale 8y ago
Try to replace ferraris with food and explain that during a famine, most people are simply not in the market for eating. Your definition is a circular piece of logic defined to justify an ideology. The word 'shortage' has been used for a while. Creatin a definition that disqualifies its use is simply disingenuous.
- dhillaoeu 8y ago
  Appealing to emotion doesn't work... for both of you. "Solving the problem" is not a well defined. Although it was a pleasure to read this exercise in persuasion.
  - pyrale 8y ago
    I simply did not use the words "solving the problem". Also showing an example that is not carefully picked to fit within the offered definition is not appealing to emotion, it's simply valid feedback.
- randomdata 8y ago
  > Try to replace ferraris with food and explain that during a famine, most people are simply not in the market for eating. Makes sense to me. Famine suggests that someone goes hungry, so obviously not everyone is in the market. So it is either down those who can afford food get what food is available, and thus everyone else is not in the market to buy food. Or you resort to capping the price of food and rely on something like a lottery system, or first come, first serve to determine who ultimately gets the food. Only the latter would be described as a shortage of food.
  - pyrale 8y ago
    Can we assume that starved people are not in the market for living? Would submarines never be short of oxygen if we raised oxygen price ?
    - randomdata 8y ago
      > Can we assume that starved people are not in the market for living? I'm not sure that living has a market, but okay, sure. If living is something you can buy, it is quite possible that not everyone will have the desire and willingness to be a buyer. > Would submarines never be short of oxygen if we raised oxygen price ? If you are trying to use short in an economic context to stay consistent with shortage (which, admittedly, makes the phrasing awkward), and not using definitions of short that have no relation to shortage (which would make the question pretty strange in the context of this discussion), then I am not sure why you would want to sell your existing oxygen only to buy it back after the price has gone up? But I guess you can short your oxygen if you wish. Why not?
      - pyrale 8y ago
        > and not using definitions of short that have no relation to shortage "there's a shortage of oxygen" fits perfectly well. My point here is that your definition is purposefully narrowing the problem in order to force one solution. Let's come back to shortage of food. Several ways to tackle it have been applied in the past, that didn't rely on free floating prices: * rationing the limited supply * increasing production etc. There is really no reason to stop at "these people can't afford to participate in the food market, let them starve". However, your definition of "shortage" tells us that the only course of action is precisely that. I'll just go on with my tirade a little bit further, and tackle the "increase production" point. Some people will say that by raising the prices, rational economic agents will enter the market to produce and sell more. This is yet another hint that the definition is not there to define a situation, but to hint at a larger scheme of economic agency. This is precisely why the definition is ideological; it is not meant to define a problem, but to introduce someone's opinion on how to solve that problem. By the way, shortage can be defined as the lack of something needed. This definition does not need further ideological body to make sense, it defines every situation we have touched here, and doesn't fragment the mean of shortage in specific situations.

pyrale 8y ago

Try to replace ferraris with food and explain that during a famine, most people are simply not in the market for eating. Your definition is a circular piece of logic defined to justify an ideology. The word 'shortage' has been used for a while. Creatin a definition that disqualifies its use is simply disingenuous.

dhillaoeu 8y ago
Appealing to emotion doesn't work... for both of you. "Solving the problem" is not a well defined. Although it was a pleasure to read this exercise in persuasion.
- pyrale 8y ago
  I simply did not use the words "solving the problem". Also showing an example that is not carefully picked to fit within the offered definition is not appealing to emotion, it's simply valid feedback.
randomdata 8y ago
> Try to replace ferraris with food and explain that during a famine, most people are simply not in the market for eating. Makes sense to me. Famine suggests that someone goes hungry, so obviously not everyone is in the market. So it is either down those who can afford food get what food is available, and thus everyone else is not in the market to buy food. Or you resort to capping the price of food and rely on something like a lottery system, or first come, first serve to determine who ultimately gets the food. Only the latter would be described as a shortage of food.
- pyrale 8y ago
  Can we assume that starved people are not in the market for living? Would submarines never be short of oxygen if we raised oxygen price ?
  - randomdata 8y ago
    > Can we assume that starved people are not in the market for living? I'm not sure that living has a market, but okay, sure. If living is something you can buy, it is quite possible that not everyone will have the desire and willingness to be a buyer. > Would submarines never be short of oxygen if we raised oxygen price ? If you are trying to use short in an economic context to stay consistent with shortage (which, admittedly, makes the phrasing awkward), and not using definitions of short that have no relation to shortage (which would make the question pretty strange in the context of this discussion), then I am not sure why you would want to sell your existing oxygen only to buy it back after the price has gone up? But I guess you can short your oxygen if you wish. Why not?
    - pyrale 8y ago
      > and not using definitions of short that have no relation to shortage "there's a shortage of oxygen" fits perfectly well. My point here is that your definition is purposefully narrowing the problem in order to force one solution. Let's come back to shortage of food. Several ways to tackle it have been applied in the past, that didn't rely on free floating prices: * rationing the limited supply * increasing production etc. There is really no reason to stop at "these people can't afford to participate in the food market, let them starve". However, your definition of "shortage" tells us that the only course of action is precisely that. I'll just go on with my tirade a little bit further, and tackle the "increase production" point. Some people will say that by raising the prices, rational economic agents will enter the market to produce and sell more. This is yet another hint that the definition is not there to define a situation, but to hint at a larger scheme of economic agency. This is precisely why the definition is ideological; it is not meant to define a problem, but to introduce someone's opinion on how to solve that problem. By the way, shortage can be defined as the lack of something needed. This definition does not need further ideological body to make sense, it defines every situation we have touched here, and doesn't fragment the mean of shortage in specific situations.