> My news this week is full of stories of employers who cannot find enough labor.
Yeah, they can't find enough labor because they want to pay people $15 an hour in an area where the median home price is $572,000. I work in logistics. I occasionally overhear some of executive staff down the hall from my office complain about being unable to keep workers in a non-climate controlled warehouse, lifting enormously heavy things, for 8 hours a day, in one of the richest areas of Texas that isn't Houston or Dallas.
Gee, I can't imagine why people wouldn't want to work in a warehouse in 100 degree F weather, lifting 30-80 lbs. boxes for 8 hours.
So I pulled data on that warehouse and it's location. In-N-Out is hiring just 10 miles away for $16 an hour. Yeah, it's not a great job either, but it's air conditioned. And you won't be lifting anything heavier than a box of fries. Furthermore, the cheapest rent within a 10 mile radius of that warehouse is $1700. Good luck paying that on $15 an hour.
So yeah, I can understand why employers can't find workers...
The market is always a negotiation between buyers and sellers, naturally.
I have for years always gotten emails from recruiters trying to hire me as an FTE for SWE jobs in nothing towns in flyover states at 6x less than what I charge, too. Those positions are similarly unfilled.
People pick their best options available, usually.
If they can't find/keep labor for $15/hour, that means the price for labor in their market is greater than $15/hour. That's a good thing, as that's not true most places on this planet.
Surely it makes no sense to compare the median home price to the lowest paying jobs? We don’t really expect people who earn the least to be buying the median house. (And it’s silly to think that 100% home ownership is some kind of ideal, it has a lot of negative consequences so we’re better off with many people renting).
This claim would be stronger if you compared to the bottom 10% of housing, say.
Not sure what the housing market is where you live, but you can't get a house here, unless you make an offer 35% over asking and have cash on hand. Could you get a house for < million? Perhaps but it'll be "a fixer upper" to put it humorously. You're more likely looking at a trailer, and those have 5 year waiting period.
You understand that this is very unusual right? I mean, mere seconds of googling can show you that the average house price in the U.S. is about 270K, not 570K, and the average purchase price is not 35% over-asking unless there is a sudden epidemic of people under-asking and misvaluing their own homes.
> where the median home price is $572,000
Where did all the money come from in last 1 year to inflate the prices to this insanity.
So asset inflation is eventually going to make impact on labor prices and cause inflation. Then is why FED so cocksure that inflation is no big deal.
>So yeah, I can understand why employers can't find workers...
I don't understand why employers cant simply pay more and pass on the costs to their consumers. What's stoping them.
> Where did all the money come from in last 1 year to inflate the prices to this insanity.
We've been printing trillions over the past 15 years or so. And we've disproportionately accumulated it at the top (including the audience here, although the top 1% and 0.1% are doing even better than that). That money has to go somewhere. Traditional conservative investments have low rates of return right now - think low interest rates - and housing has historically been seen as "safe". And it's providing fantastic returns.
Take COVID - nobody wants to move, so housing supply is low. Tight supply is just exacerbating an existing issue, especially sharply over the past year.
Totally anecdotal: I just moved from SF to Seattle, somewhat related to my job. We were outbid half a dozen times, often by cash offers. I remember one of them in particular, because we got beat way over asking by a cash buyer, and it was rented on Zillow the week after closing. Housing is an asset class, not a place we live.
> I don't understand why employers cant simply pay more and pass on the costs to their consumers. What's stoping them.
Passing costs onto consumers is a bit of a lie used to scare consumers into opposing wage increases. You can only pass on so much cost, and it depends in part on the elasticity of demand for your product.
Anyhow, employers generally can pay more, but they are optimizing for their shareholders and return on equity. That's going pretty well if you look at the market. But that's why the market isn't reflective of the economy as a whole.
100% this. Quantitative easing basically caused epic asset inflation- great for the capital owning class, but royally fucking over the poors and young workers.
In Seattle back in the day a teacher could own a house in the city and pay it off without a sweat. Nowadays, unless you are a doctor or software engineer or patent lawyer it's kind of ludicrous idea.
And I would bet you a week's pay the "job creators" who are complaining they can't find people willing to work for peanuts doing backbreaking miserable labor are the first to claim "we're full, no more immigrants!" to the US when there are plenty of folks in neighboring countries willing to work these jobs and pay taxes...
> Yeah, they can't find enough labor because they want to pay people $15 an hour in an area where the median home price is $572,000.
No, as in, can't find skilled labor for a good salary. The notion that only unskilled labor is sought after is incorrect. Good people are always hard to find. Smart people are always hard to find. But most workers are average, and it is hard to find a job that can support a half million mortgage for the worker who is average.
What is also true is that there is skilled labor in shrinking industries and that labor is not easy to transfer to other skilled industries. You can take a smart person in logistics and convert them into a highly sought after programmer with enough time and the right attitude, but if you already have a family then you can't handle the dip. Skill mismatch is a real problem, particularly given our penchant for outsourcing. But I don't see why meeting the mortgage needs of half million dollar homes should be the yardstick by which you judge a labor market.