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What would you call it if we had 5 positions at the widget factory, but only 4 prospective employees looking for work? Wouldn't that constitute a worker shortag

What would you call it if we had 5 positions at the widget factory, but only 4 prospective employees looking for work? Wouldn't that constitute a worker shortage, as no matter how high I make my wages as a widget foreman, there are still less workers than there are open positions? Or is that not something that could really happen outside of a textbook problem?

bulletsvshumans 5y ago
Advertise a higher than expected wage, and you will see more people coming out of the woodwork.
Retric 5y ago
Offer people enough money and they will move. Offer even more and they will train specifically to do the job. Jobs that require lots of training can have short term global shortages of skilled workers. But, that quickly self corrects as long as salaries increase.
- sundaeofshock 5y ago
  That does not necessarily follow. It’s very difficult to put food on the table while going to school in hopes of landing a job in a new field. Pay living wages and provide paid, on-the-job training. That will get prospective employees through the door.
  - Retric 5y ago
    It does at a high enough salary. Some people are unable to pay for their own training but you don’t need everyone you simply need enough people. Start offering Doctor money and people will jump through insane hoops, but it scales down so even 20$ an hour will motivate some people to do a specialized training course on their own dime.
  - x0x0 5y ago
    If it's that important to employers, they'll pay them during the training period. This used to be standard practice. It's a modern development (80s on) that businesses demanded workers come pre trained.
cogman10 5y ago
What are your requirements for the widget employees? Are you willing to train or educate? How effective has your advertisement for the job/wage been? On a microlevel, a worker shortage is a reflection of lack of wage and too strict requirements. You can't find a worker because your potential workers are happily doing a different jobs. You've not incentivized them enough to come work for you. You might say "But we are offering $15/hour!" and that's fine, but that's what a lot of other companies are now offering. You make balk at the idea of going up further as being "too much" but that just underscores the problem. Now if it truly is a labor shortage, SOMEONE is going to be left with not enough workers. That'll always be the person that wants "15 years of experience! We pay $30k/year!". Just do the extreme. Do you think you'd struggle to find someone if the offering was "$200k/year!"? Hell no, you'd have people moving to live in your widget city for that job.
djbebs 5y ago
Thats not something that happens in real life, because you will run out of resources to pay the prospective workers with before the total supply of prospective workers is exhausted. Realistically, you can even hire people to manufacture additional workers, if you have the financial and time resources required.
rapind 5y ago
Not really. You'd have to add some very contrived constraints, like: 1) There's no one currently employed elsewhere that can make widgets who you could poach for enough money. 2) Widget making is so specialized and / or time is so short that you can't train up another worker to fill the role. If #1 and #2 aren't possible because your margin can't cover it, then you have a failed business, not a labour shortage. So basically "labour shortage" in a market economy is a myth, usually circulated to suppress wages. Anyone who says "labour shortage" really means "not enough cheap labour".
ren_engineer 5y ago
pay more money or any other incentive that would cause more people to be interested in the job. Why do you think FAANG has hundreds of applications for each job while startups struggle to hire?
- ericd 5y ago
  Paying more is relatively easy to do when your company makes a few million per employee. The vast majority of companies aren’t blessed with pseudo-monopolies that allow them to do that.
randomdata 5y ago
The other employees will catch wind of your million dollar per hour offers thrown out in an desperate attempt to find someone, demand that you pay them that much as well, and you'll be bankrupt by Friday. At that point you will have no open positions and everything is corrected for. Or, to avoid bankruptcy, you won't increase your offer and therefore will be removed from the market as a buyer for that position. A shortage occurs when an external force prevents price from rising. Medical doctors in some jurisdictions, for example, are often legally prevented from accepting higher offers to prioritize patients. Instead their service fees are fixed and they have to accept patients on system that is usually a mix of first come, first serve and needs-based priority. Therefore a doctor shortage, in said jurisdictions, is quite possible. But you generally won't find such restrictions in the general labour pool.

bulletsvshumans 5y ago

Advertise a higher than expected wage, and you will see more people coming out of the woodwork.

Retric 5y ago

Offer people enough money and they will move. Offer even more and they will train specifically to do the job. Jobs that require lots of training can have short term global shortages of skilled workers. But, that quickly self corrects as long as salaries increase.

sundaeofshock 5y ago
That does not necessarily follow. It’s very difficult to put food on the table while going to school in hopes of landing a job in a new field. Pay living wages and provide paid, on-the-job training. That will get prospective employees through the door.
- Retric 5y ago
  It does at a high enough salary. Some people are unable to pay for their own training but you don’t need everyone you simply need enough people. Start offering Doctor money and people will jump through insane hoops, but it scales down so even 20$ an hour will motivate some people to do a specialized training course on their own dime.
- x0x0 5y ago
  If it's that important to employers, they'll pay them during the training period. This used to be standard practice. It's a modern development (80s on) that businesses demanded workers come pre trained.

cogman10 5y ago

What are your requirements for the widget employees? Are you willing to train or educate? How effective has your advertisement for the job/wage been? On a microlevel, a worker shortage is a reflection of lack of wage and too strict requirements. You can't find a worker because your potential workers are happily doing a different jobs. You've not incentivized them enough to come work for you. You might say "But we are offering $15/hour!" and that's fine, but that's what a lot of other companies are now offering. You make balk at the idea of going up further as being "too much" but that just underscores the problem. Now if it truly is a labor shortage, SOMEONE is going to be left with not enough workers. That'll always be the person that wants "15 years of experience! We pay $30k/year!". Just do the extreme. Do you think you'd struggle to find someone if the offering was "$200k/year!"? Hell no, you'd have people moving to live in your widget city for that job.

djbebs 5y ago

Thats not something that happens in real life, because you will run out of resources to pay the prospective workers with before the total supply of prospective workers is exhausted. Realistically, you can even hire people to manufacture additional workers, if you have the financial and time resources required.

rapind 5y ago

Not really. You'd have to add some very contrived constraints, like: 1) There's no one currently employed elsewhere that can make widgets who you could poach for enough money. 2) Widget making is so specialized and / or time is so short that you can't train up another worker to fill the role. If #1 and #2 aren't possible because your margin can't cover it, then you have a failed business, not a labour shortage. So basically "labour shortage" in a market economy is a myth, usually circulated to suppress wages. Anyone who says "labour shortage" really means "not enough cheap labour".

ren_engineer 5y ago

pay more money or any other incentive that would cause more people to be interested in the job. Why do you think FAANG has hundreds of applications for each job while startups struggle to hire?

ericd 5y ago
Paying more is relatively easy to do when your company makes a few million per employee. The vast majority of companies aren’t blessed with pseudo-monopolies that allow them to do that.

randomdata 5y ago

The other employees will catch wind of your million dollar per hour offers thrown out in an desperate attempt to find someone, demand that you pay them that much as well, and you'll be bankrupt by Friday. At that point you will have no open positions and everything is corrected for. Or, to avoid bankruptcy, you won't increase your offer and therefore will be removed from the market as a buyer for that position. A shortage occurs when an external force prevents price from rising. Medical doctors in some jurisdictions, for example, are often legally prevented from accepting higher offers to prioritize patients. Instead their service fees are fixed and they have to accept patients on system that is usually a mix of first come, first serve and needs-based priority. Therefore a doctor shortage, in said jurisdictions, is quite possible. But you generally won't find such restrictions in the general labour pool.