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The colloquialism means the exact same thing as what the economist means and it's because the term was taken from the economics vocabulary and is only ever used

by anm89 5y ago

The colloquialism means the exact same thing as what the economist means and it's because the term was taken from the economics vocabulary and is only ever used specifically when discussing economics even if by non economists. There's not a shortage of human beings. There is a shortage of human beings who want to work at the current market prices. No matter how many ways you try to twist it a labor shortage implies information about wages.

tarboreus 5y ago
Not the person you're arguing with, but you're on the wrong side of this one. It's a shortage if there's an artificial constraint on price such that raising or lowering prices can't affect the supply. Say I'm shopping for breakfast. I go to the store and see the price of avocadoes, they're $5 per avocado. I say, "Damn, the price of avocodoes has gone WAY up! There must be a shortage of avocadoes." That's fine to say in a colloquial sense, meaning that, for whatever reason, avocadoes are more expensive, and you're figuring demand hasn't gone up, so that something must be going on with supply. It's not a shortage in the technical sense, though. It's just the market working to supply avocadoes, which may be cheap or expensive depending on supply and demand. Now, imagine congress passes a law that says all avocadoes must be sold at $3. What follows this is likely to be a shortage in the technical sense, because the market can't incease prices to encourage more people to farm avocadoes, increasing supply. There will be people out there that would pay more for avocadoes, and they won't have avocadoes to buy. SO yeah, we're not in a labor shortage. Companies just don't want to pay for labor at new prices because they're so used to paying much lower prices. Once companies start paying higher wages, more actors will move to take advantage (people coming out of retirement, people starting bootcamps, people switching careers, w/e), which will exert stabilizing or downward pressure on wages. This is all just the normal action of the market. A decrease in supply is not a shortage, it's a decrease in supply.

by anm89 5y ago

tarboreus 5y ago

Not the person you're arguing with, but you're on the wrong side of this one. It's a shortage if there's an artificial constraint on price such that raising or lowering prices can't affect the supply. Say I'm shopping for breakfast. I go to the store and see the price of avocadoes, they're $5 per avocado. I say, "Damn, the price of avocodoes has gone WAY up! There must be a shortage of avocadoes." That's fine to say in a colloquial sense, meaning that, for whatever reason, avocadoes are more expensive, and you're figuring demand hasn't gone up, so that something must be going on with supply. It's not a shortage in the technical sense, though. It's just the market working to supply avocadoes, which may be cheap or expensive depending on supply and demand. Now, imagine congress passes a law that says all avocadoes must be sold at $3. What follows this is likely to be a shortage in the technical sense, because the market can't incease prices to encourage more people to farm avocadoes, increasing supply. There will be people out there that would pay more for avocadoes, and they won't have avocadoes to buy. SO yeah, we're not in a labor shortage. Companies just don't want to pay for labor at new prices because they're so used to paying much lower prices. Once companies start paying higher wages, more actors will move to take advantage (people coming out of retirement, people starting bootcamps, people switching careers, w/e), which will exert stabilizing or downward pressure on wages. This is all just the normal action of the market. A decrease in supply is not a shortage, it's a decrease in supply.