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Finally a respected economist who calls a spade a spade. There is no such thing as "shortage" of anything. Just pay more, and you'll get it. Now, here's some a

• huhtenberg 8y ago
  > train people more. You hire them at lower qualifications, and educate them in house... ... they learn and then leave, because if you were able to pay them the market rate you would've not been training them in the first place (considering the context of your comment).
  • richardknop 8y ago
    Increase their salary to market rate once they complete their training. Easy.
    • huhtenberg 8y ago
      The OP lists options for when you do NOT have funds to do exactly that.
      • admax88q 8y ago
        If you don't have the money to pay market rate for the skills you need to run your business then unfortunately your business model is untenable. Just like you can't sell jewellery for less than the cost of the gold you had to purchase to make it.
        • huhtenberg 8y ago
          Certainly. That's exactly why "hire people at lower qualifications, and educate them in house" is not a viable option in this case either.
  • AnIdiotOnTheNet 8y ago
    Maybe, but if you treated them as more than a disposable cog, as is the trend, they might not. Show them opportunities for promotion, be respectful of their time, show them they won't be fired for petty reasons, and generally treat them like a human being and let them know they have a future with you. Searching for jobs sucks, being the new guy sucks, discovering that a new company's culture isn't a good fit and having to start the process all over again sucks. Give them enough reasons not to go through that and the money won't even matter that much if they have any wisdom in them at all. Another advantage of training them yourself is that you shape them into precisely what you need. They know your systems, your work culture, your priorities, and are continuously adding to their institutional knowledge.
    • nathan_long 8y ago
      This. If https://insights.stackoverflow.com/survey/2018/#work-how-do-developers-assess-potential-jobs https://insights.stackoverflow.com/survey/2018/#work-how-do-... is to be believed, compensation and benefits are the most important thing to most programmers. But it's not the only thing, and my guess is that beyond some "good enough" level, other factors become more important. Imagine you were hired at a company, trained and mentored in a whole new skill set, given work you enjoy and find meaningful, working with people who encourage your further development, and were shown appreciation for your efforts and abilities. Would you leave at the first opportunity to get a raise? Unless I really needed the money or was severely underpaid, I probably wouldn't.
      • jlg23 8y ago
        I would argue that programmers are still a very special group with a bias towards/a culture of short term gigs. Within my circles, those around 40 are either not programming anymore or work at "unsexy" companies with perks and benefits like "9 to 5" and paid 6 week vacation time. The cool ones still maintain a geek-comptible culture under the hood but that is not expressed in free beers and scheduled crunchtimes.
    • tokyodude 8y ago
      I'm curious if it's actually possible to treat all employees as more than a disposable cog. I worked at Google and have several friends that work at Google. There's a ton of work to do that is not fun and doing it feels like disposable cog work. It's not fulfilling but it needs to be done. This is one reason lots of people leave. There's a few glamorous jobs and lots of not fun jobs. I'm sure others can come up with better examples but basically with such large code bases things take forever to implement, pass all the tests, and need maintenance forever. There's so much to do and the team so large that you personally get to concentrate on one tiny tiny part of years. Maybe another example is working on drivers for the various new ChromeOS devices. Another might be all the solutions engineers for companies using Google Cloud related stuff. I know people doing it. Their job is to take a call from the customer and then try to write code to show them how to fix their issue. Maybe there are people who want to do those things but I don't.
  • flatfilefan 8y ago
    Not necessarily. I’d argue original employer has an inertia/experience advantage, if they don’t underpay too much.
  • nathan_long 8y ago
    The old joke about this is: > Two managers are talking about training their employees. The first asks, "Yeah, but what if we train them, and they just leave?" The second responds, "What if we don't train them, and they stay?"
    • scarejunba 8y ago
      The obvious thing to do is to get some other sucker to do the training and then you hire them away. You can always beat the other guy's wages because you don't spend on training.
      • nathan_long 8y ago
        Unless the other company manages to get more value out of trainees than they pay them, in which case the additional revenue lets them beat your offer.
  • acjacobson 8y ago
    Something that doesn’t really exist anymore but easily could is offering fixed contracts (so not at-will employment). This way you can pay to train and keep the employee longer while the employee gets the added security of having a job that they can’t lose. I’ve never heard of contracts like this outside sports and movies and I wonder if any more traditional companies have considered exploring it.
    • beojan 8y ago
      > I’ve never heard of contracts like this outside sports and movies And the military
    • TallGuyShort 8y ago
      It's not that different from relocation contracts. In both cases the company is paying a large upfront cost in order to hire you and doesn't want you to turn around and work for someone else. If you leave early, you're on the hook for a portion of the bill.
  • eiaoa 8y ago
    >> train people more. You hire them at lower qualifications, and educate them in house.. > ... they learn and then leave, because if you were able to pay them the market rate you would've not been training them in the first place (considering the context of your comment). As an employer, you're going to have to pay market rate for the skills you need, one way or another. If you do that and your employees still want to quit after their training, then your organization has more dysfunctions that you need to fix.
• scarejunba 8y ago
  > There is no such thing as "shortage" of anything. Just pay more, and you'll get it. Trivially counter-exampled, right? There's a shortage of manned space launch systems at the moment. If we had a launch system today we'd use it immediately. We can pay infinity dollars and there still wouldn't be one available for use for quite some time.
  • deleted 8y ago
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  • sigfubar 8y ago
    The person you’re replying to made a generalized statement in the context of companies struggling to fill jobs at a price point that no longer exists. He suggested that companies simply catch up with the price point, which has been moved upwards by market forces. What you’re describing is correct but different.
  • galfarragem 8y ago
    That's a theoretical example: an auction without nothing to sell (supply = 0). When supply is > 0, the general rule applies: pay more and you will get it.
  • deleted 8y ago
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• qaq 8y ago
  "Just pay more, and you'll get it". Thats very general and does not always work if pool of candidates is genuinely smaller than demand. The Education part will obviously correct this long term but does not really help in the short term.
  • galfarragem 8y ago
    It works. Less sustainable (lucrative) companies will be out of business because they can't afford staff.
    • qaq 8y ago
      Nope they will(actually already have) open offices abroad and US Tax base will get diluted.
      • sam0x17 8y ago
        Getting that set up though costs way way more than it costs to simply hire an employee here. Large companies can do this, but small to medium sized businesses certainly cannot.
        • qaq 8y ago
          Nope it costs pretty much peanuts to setup especially if they go through local partner in Ukraine or Belarus the overhead for local company handling everything for you is 30% +/-
  • jswizzy 8y ago
    "Supply and demand" is that simple. The timescale is the part throws people off. The supply should increase even if it's just more people deciding to get degrees and experience in a field that is lucrative.
  • VLM 8y ago
    The google phrase for this article in general is "exogenous force". As long as the worldwide financial markets will only fund startups in SV staffed by young Stanford grads, Stanford will never be able to produce enough grads to staff the result of a world wide financial bubble. Imagine if the housing bubble last decade would only hire house framing carpenters born in Boise ID. Eventually the idea of doing a startup in Chicago, Berlin, Paris, Prague, will change from "impossible" to "insanely rebellious and financially reckless" to "thats a great idea" and at that point the candidate pool being too small will disappear. There are other exogenous forces such as companies that want to hire H1Bs, for whatever reason, must in public declare a labor shortage for legal reasons regardless if one exists or not. I'm not trying to debate H1B program but to state authoritatively that it legally requires corporate statements about the labor market to a pre-defined value of 'shortage' regardless of actual market conditions. As if in a thought experiment federal regulators required CNBC to report false numbers for todays Dow Jones index and people actually debated policy based on the legally required fake numbers. Any corporate statement by any company hiring, or planning to hire H1Bs in the future, is inherently legally required to be a false, fixed statement of 'shortage'.
• j1elo 8y ago
  The usual response to "If you can't pay more, train them!" is that, once trained, they will leave to some competitor who can pay more. I wonder, couldn't the training be offered as a perk, quantified in some way such that if the worker leaves before X months (or years) some % of that quantity must be given back? For sure, some European companies offer a relocation package (e.g. they cover the costs of moving all your belongings, furniture, etc. to your destination) but if you leave before 1 or 2 years, you have to give back at least 50% of that cost.
  • protomyth 8y ago
    I know at least one community college that will pay for your advanced degree but require a two year contract. If you break it you have to pay them the cost of your education.
  • ghaff 8y ago
    Claw backs are fairly common for relocation and major training like paying for degree programs. I don’t know how successful companies are in collecting.
  • crispyambulance 8y ago
    > [...] once trained, they will leave to some competitor who can pay more. That comes up a lot, but it's not true. That employer ALSO has the ability to hire someone that was trained elsewhere and pay a premium-- it goes both ways. Moreover, it is not the case that "once trained" the employee can easily find work elsewhere. Employers who are willing to pay a premium for skill want _experience_ and not just a training certificate (especially an in-house one of possibly dubious value). There's a lot more to do for the employee after they're trained and the best way to do it is to stay and practice the newly learned skills. > [...] couldn't the training be offered > [...] such as if the worker leaves before > X months (or years) some % of that quantity > must be given back? There are places that do that. It's a bit draconian and you usually hear about it Asian countries. Much more practical to just eat the cost of an occasional early quitter-- not like it's going to sink the company.
    • 8y ago
• jimmydddd 8y ago
  Agreed. I can't say that there is a shortage of Teslas because I have offered to buy one at $10k, and no one will sell me one at that price.
• mc32 8y ago
  Agreed. The training part is key. Train those who show interest but currently lack competency. If by company rather than national program, get rights to the worker for a year or two to offset training costs (not much diff from fed programs designed to get teachers to teach in less desirable districts).
• thanosnose 8y ago
  > Finally a respected economist who calls a spade a spade. There is no such thing as "shortage" of anything. Just pay more, and you'll get it. This is economics 101 - supply and demand. What everyone learns in their first course in economics. But most economists are paid to espouse a political perspective, so most choose to ignore it. Paraphrasing sinclair : When your salary depends on you not knowing something, you magically don't know something. > - train people more. You hire them at lower qualifications, and educate them in house When you prevent out sourcing, h1b visas, hiring illegals, etc, it forces local companies to invest in the local population. And it's not just at the company level. The reason we have a public education system, highways, public transportation is because the private sector needed literate workers and the ability to transport workers and goods. So companies put pressure on the government to provide education for the masses, build highways, public transportation, etc. Amazing what can be accomplished when private+public interests are aligned. When they aren't aligned, you get the rust belt, increasing wealth inequality and continued societal breakdown ( opioid crisis, late family creation, distrust between people and distrust of government, etc ).
  • jayess 8y ago
    Isn't it incredible how many "hot button" political issues go right back to this basic economic law? Healthcare, tuition, minimum wage, housing, etc. Econ 101. Supply and demand. But so many people hate the idea of supply and demand. They try and tweak around it and legislate like it doesn't exist, and things get more and more distorted.
    • CabSauce 8y ago
      The law of supply and demand relies on efficient markets. Heathcare, to name one, really doesn't apply.
      • jayess 8y ago
        No it doesn't. And you've made my point perfectly.
      • mcv 8y ago
• AtlasBarfed 8y ago
  It's almost like the profession of economics is beholden to a class of rich industrialists that will restrict their careers, exposure, and success if one were to dare repeat obvious, basic facts about increasing pay of workers.
  • clarkmoody 8y ago
    A large proportion of US economists are employed by the Fed and government agencies. Many others in academia do government-sponsored research. Not surprisingly, they won't advance in their careers if they advocate for fewer government interventions in the market.
    • snackbugs 8y ago
      To take this critique to an even lower order of problems, economics as a field is strictly centered on capitalism and the base assumption that markets are the only efficient distribution of resources. By this nature professionals researching economics will be captured by corporate interests at every level.
      • CryptoPunk 8y ago
        Economics makes no axiomatic assumptions favoring market-based economies. The conclusion that free markets work better is empirically supported. It also counter the interests of powerful special interest groups, which has placed economists outside of the political consensus on numerous issues. We're not living in some free market paradise. Our economy is highly controlled from the top down, with major government interventions limiting contracting and private property rights. Just to give one especially stark example, if you offer stock in your small business to the public, without going through an arduous registration process and getting approval from the securities regulator, you will be fined and potentially imprisoned.
        • snackbugs 8y ago
          >The conclusion that free markets work better is empirically supported Better for whom?
• nova22033 8y ago
  >Finally a respected economist Also the guy who ran the bank/AIG bailout program.
  • mdorazio 8y ago
    The one that netted US taxpayers $68 billion?
• coughupalung 8y ago
  I remember seeing "leaders" in the Vancouver tech industry talk about a labour shortage and thought the same thing [1]. Given the cost of housing and the salaries Vancouver companies are willing to pay, it's not a mystery why there is an exodus from Van. Pay up buttercup. [1] https://www.theglobeandmail.com/technology/bc-technology-leaders-urge-province-to-increase-high-tech-training/article30950808/ https://www.theglobeandmail.com/technology/bc-technology-lea...
  • barrow-rider 8y ago
    Salaries in Van are lame, but the housing costs are all out of proportion. I was in Kitsilano a couple weeks ago and stayed in an AirBnB; liked the neighborhood and decided to check out some of the for Sale Signs. Modest 3-bedrooms were going for $1.7-$2.4MM CAD, while average Dev salary was something like 90k CAD. Even if that doubled they'd be hard pressed to pay for housing that high.
    • fredophile 8y ago
      Housing in Vancouver is disproportionately high compared to salaries but I probably wouldn't use Kitsilano as an example. Point Grey and Kits are some of the most expensive neighbourhoods in the city. You can find more reasonable, but still very high, prices in other parts of the city.
      • kareemm 8y ago
        There’s nothing reasonable about the cost of housing in Vancouver. Last I checked median price of all housing stock (including condos) was $900k+. If you’re a two income family with kids home ownership is basically out of reach.
• randomdata 8y ago
  > There is no such thing as "shortage" of anything. Just pay more, and you'll get it. There is. We didn't create the word to have no meaning. However, it is not defined the way many people seem to think it is or the way you are suggesting. The formal definition of shortage is a situation where an external mechanism prevents price from rising. External mechanisms can include government intervention, which is not completely unheard of. Medical doctors, for example, have a government-mandated price ceiling in the jurisdiction in which I reside. You legally cannot pay more to take the services of a doctor away from someone else. However, such circumstances are indeed rare, especially when it comes to the price of labour-based activities. To put it another way: A shortage is a situation where you cannot pay more, even if you had all the money in the world to spend on what you seek.
  • deleted 8y ago
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  • ams6110 8y ago
    That's an economic definition. A more common understanding of shortage includes conditions where the price rises beyond what I can afford. If I can't afford beef at $10/lb but the supply of beef commands that price, I will perceive that as a "shortage"
    • imglorp 8y ago
      > beyond what I can afford No, it's not usually "CAN afford", it's more like "beyond what I WANT to pay". Eg Apple has $245 billion in cash. Instead of offshoring the production AND the cash and then gaming the H-1B supply [1], they could be exploring education, infrastructure, and training, per credit_guy's observation above. We also need to discourage offshore tax havens. 1. https://www.networkworld.com/article/3196711/careers/us-law-allows-low-h-1b-wages-just-look-at-apple.html https://www.networkworld.com/article/3196711/careers/us-law-...
  • eldavido 8y ago
    Slightly pedantic point: A shortage is a market failure where you have willing parties who want to transact (a guy wants to sell at $10 and someone wants to buy at that price) but for whatever reason they can't. For shortages in particular, there are more buyers than sellers (surplus is the reverse condition). The price might normally rise but it can't. The failure to transact is the first-order condition. That prices can't rise are sometimes a cause or effect, depending on the situation. But the main thing is that you have people who want to transact who can't. Shortages often happen due to price controls. Say I want to sell my house. I won't take $100K for it but I will take $200K. You are fine paying $200K. A rule is made that no houses can be sold for more than $150K. We both are fine with $200K but I can't sell my house because I won't accept $150K for it. So we don't transact. The sale doesn't happen, even though we both want it to. In the long run, producers don't bother producing because their upside is capped. That usually makes things worse: not only can the price not rise, but the market becomes systematically undersupplied. But that's a follow-on effect, not the "shortage" per se. You are completely correct that this (a shortage) is a highly technical condition that doesn't correspond to the common use of this term, something like "it costs more than I want to pay".
• sam0x17 8y ago
  also hire felons
• alasdair_ 8y ago
  >There is no such thing as "shortage" of anything. Just pay more, and you'll get it. ... eventually. Some things take time. If there is a shortage of babies, you need to wait nine months to get more of them, regardless of how much you pay (!). If there are only 1000 doses of a life-saving drug and there are 2000 patients that need it TODAY or they will die, no amount of money can make new doses quickly enough. Labor markets mostly work the way you are describing, but sometimes (especially in cases where training can take a long time, like, say, for doctors), simply offering more money isn't enough of a solution to meet short-term needs.
• weliketocode 8y ago
  I think timing is quite important here. Companies are understandably reluctant to quickly increase wages when the supply/demand forces for labor shift out of their favor.
• bryanrasmussen 8y ago
  there is in general not shortages of anything, but you can of course envision situations in which shortages would be real.
• schnevets 8y ago
  You're absolutely correct that novel alternatives are out there. I would add innovations in the hiring process to that list. In a typical interview process, candidates have to take vacation time from their current role and jump through tons of hoops to ever receive a salary offer. I know there are startups hoping to disrupt hiring (and the LinkedIn fueled swamp that is the recruitment industry), but now is the time for companies to rethink how they vet their candidates (and I don't mean lowering standards).
• logfromblammo 8y ago
  Business managers should try playing Tropico games sometime. Penultimo mentions in a tutorial popup, the first time a critical building--such as a teamster's office--lacks workers, that perhaps you should increase the wage for this type of worker, Presidente (or increase immigration, or pay to import a foreign specialist). He never suggests that the job should be offshored, because that would be bad for Tropico's economy, and he's a Tropican loyalist. For some reason, you can't force a Tropican citizen to cycle between multiple part-time, low-paying jobs to take advantage of fractional-employee building capacity. Perhaps they are programmed to not like that. Can't imagine why.~
• thisisit 8y ago
  I respectfully disagree with this notion - just pay more to workers. There are many people who in this very thread talk about sustainability of businesses, especially those cannot survive without lower wage jobs. All the while ignoring the reasons behind why businesses actually do that. Couple of years ago, I traveled to US for the first time. And the most startling thing for me was - the relative price of stuff in US. Let's take for example - McDonalds. In US, they use the cheapest ingredients and pay workers minimum wage to keep food costs low and accessible. Sure, you might say the food is shit but cheap and accessible nonetheless. In contrast, my native country (a developing one) they use same cheap ingredients and "decent pay" to employees. The end result is that 95% of the population cannot afford their burgers. McDonald's burgers are considered luxury items. So, I think people should also think along those line. Why are companies actually not willing to pay more? It is easy for everyone to be cynical and say cheap labor benefits few millionaires/billionaires but that is not the full story.
  • toomuchtodo 8y ago
    If your business can't afford a higher wage, you don't deserve to be in business. McDonalds isn't going to go out of business paying more, it'll come out of shareholder profits. @coredog64: I agree that Starbucks would be a better example.
    • thisisit 8y ago
      Decreasing shareholder profits is not the only outcome. The incentive will also be to increase burger prices. And I think that will have its own knock on effect.
    • coredog64 8y ago
      McDonalds is a poor example here. McD is primarily a franchise model, selling supplies and demand for what the brand sells. Higher wages would primarily impact the franchisee. The only way McD (the corporation) can increase wages is to mandate that franchises pay above minimum wage. I believe Starbucks is a better example as they don’t use the franchise model.
    • 8y ago
• gameswithgo 8y ago
  >There is no such thing as "shortage" of anything. Sufficient money/effort can create and do a lot of amazing things. But probably not anything
• ghobs91 8y ago
  Couldn't they simply charge more for their product/service to enable them to offer the higher salaries needed to attract workers? I get the feeling that when they say they're struggling to fill jobs, what they really mean is "our current employees are overworked, and it would be nice to hire more and eek out some productivity, but no one wants the salaries we're offering so oh well". If their struggle to hire was truly affecting their ability to produce, they would quickly offer more money, just as tech companies do to attract engineers.
• hinkley 8y ago
  - apologize and improve your office culture so you stop scaring people off.
• rebrad 8y ago
  End of the day it comes down to incentives and barriers. Offering training to outsiders to increase the supply of people is great, but not easy. Most don’t complete online courses, expensive traditional training and education is expensive, complex and hard to navigate. Educating in-house is costly and inefficient end of the day too. Leaving it all to some of the big tech probably not the most risk free option either. That’s why the trend of income sharing schools exists I think they make sense - low risk, low barriers and high incentive.
• ip26 8y ago
  There is no such thing as "shortage" of anything Is it incorrect to describe a crop failure which leads to widespread famine as a "food shortage"? Perhaps there is a more correct term?