47 ms·

The US “labor shortage” is just a wage shortage (2021)

257 points by webmobdev 4y ago

mensetmanusman 4y ago
I wonder about this. My 70-year old dad retired and would like to work more, but his body just can’t anymore. Sure, we might be able to pay these people more to work, but think about how unhealthy the population is getting. Wage shortage might be another way of saying health shortage, we just don’t have the strength to get to work (obesity is reaching 50% of the population abouts…)
- tyingq 4y ago
  That's not what I'm seeing in the US. Well, not that it doesn't exist, but it doesn't appear to be the main problem. The problem is easy to see at the low end. Some employers have finally decided to pay a somewhat decent wage for "no experience needed" type work. There's even a few national fast food and retail chains that latched onto that and are paying $15/hr+. So, for the employers left paying between minumum wage ($7.25/hr) and say $14/hour, what kind of pool of employees are they pulling from? Who is willing to take significantly less than they can trivially get across the street, down the block, etc?
  - aperson_hello 4y ago
    They're pulling felons, people who can't pass a drug test, and people who won't leave due to a perverse sense of loyalty or fear of change. If they drug test or background check, then they're going under while complaining that no one wants to work.
- Finnucane 4y ago
  Decades of relatively stagnant wages have left many unable to save for retirement.
  - tyingq 4y ago
    Also the transition from pensions to 401k.
- yakak 4y ago
  I don't think we really want a lot of pensioners to return to work though that may be an eventual need. The numbers for younger males are pretty bad and their never working means a lifetime of social services. Sure statistically they have various health problems in excess of past generations but I think it is rare that they can't do lighter service jobs which should mean more drastic difference in pay or qualifications for heavier service jobs than I usually saw in the US (though I may be out of date on this). Things like ruining a worker by funneling kids through a piecemeal system that ultimately pushes them towards a rap sheet or just some kind of permanent black marks in education are much more significant problems that lead to a lot of young men sitting around either at home or in groups on streets depending on social/economic levels of their families, etc.
- jtdev 4y ago
  [dead]
mrfusion 4y ago
It’s also a respect shortage, and a flexibility shortage, and a plannable scheduling shortage.
- yardie 4y ago
  People will put up with almost anything for a price but they won't put up with eating shit while making shit wages. An executive assistant makes $100k+ to be a personal punching bag. And the main requirements for the job is be organized, be discrete, be willing to put up with a lot.
  - tombert 4y ago
    When I was a teenager, I was a little asshole to fast food and phone tech-support workers (basically falling into the "Karen" stereotype of people). I feel pretty bad about that now, because of course these people don't make nearly enough to put up with me being a douchebag to them. It's entirely possible that I ruined at least a few people's day by being a dick, for no other reason than I was unwilling to realize that people making minimum wage really shouldn't be yelled at unless they're mean first (which they generally aren't). Nowadays I try and be extremely polite to people serving me food or checking me out at the grocery store, and make a point to only be mean to people whose job it is to be yelled at.
    - circlefavshape 4y ago
      How about not being mean to anyone?
      - tombert 4y ago
        I don't think that's always the best policy; I agree that 99% of the time you should be nice to everyone, but there are times when a company simply will not do what you need them to do unless you're a bit of a douchebag to them. I'm not saying you get personal and insult their mothers or anything, but being impolite and slightly aggressive is (sadly) sometimes necessary.
xadhominemx 4y ago
The same is true of almost any shortage. You can almost always get what you want, for a price. Whether that price makes economic sense for a business to pay is a different question.
- phenkdo 4y ago
  Absolutely! The "no shortage if you pay enough" slogan is a double-edged sword. - Is there a housing shortage if you pay enough? or - is there a health-care shortage if you pay enough? : : on & on.
  - paskozdilar 4y ago
    So every shortage is just money shortage.
    - ivoras 4y ago
      Money is basically just a way to motivate other people to do something for you :D We as a civilisation obviously CAN build houses, utilities, hairdressers, space rockets, grow food, etc. - the question is simply "why" (in the literal, low-level sense: why would I do that for you? even if the economy at large would benefit from it, I just don't feel like working today, and besides, I don't know you well enough). And money (and capitalism in general) is a flawed, crude, but so far the only way the "why" gets answered for the majority of people. Another way of making someone do something for you, obviously, is to be very, very persuasive.
      - nicoburns 4y ago
        Money is a way of measuring how much economic power someone (or some legal entity) has accrued. If you have money, then you can get someone to do something for YOU. Whether the economy at large will benefit from it depends entirely on whether those with money spend it wisely. This tends to work out reasonably well so long as (monetary) wealth is relatively evenly-spread. But not always. And of course, money in contemporary society is not that evenly spread.
panny 4y ago
[flagged]
- ceejayoz 4y ago
  What professions outside of healthcare and the military are turning away unvaccinated workers in any significant numbers? https://www.cnbc.com/2022/05/10/employers-requiring-a-vaccine-mandate-for-job-applicants-is-declining.html https://www.cnbc.com/2022/05/10/employers-requiring-a-vaccin... indicates it's single-digit numbers, and I'd expect those to largely be stuff like healthcare and teachers.
  - panny 4y ago
    Article is May 2021, when Biden's vax mandates were just starting full swing. Your link is a year later when companies realized what a gigantic mistake they had made. https://www.nbcnews.com/business/business-news/here-are-companies-mandating-vaccines-all-or-some-employees-n1275808 https://www.nbcnews.com/business/business-news/here-are-comp...
- thematrixturtle 4y ago
  The minimum wage type jobs the article is talking about generally couldn't care less about vaccination.
usrn 4y ago
It's all a housing shortage^ really. If working doesn't get you anything and you still have to be completely dependent on someone then why bother? There is not a shortage of workers. We have a huge surplus of unemployed young men, they just have no reason to work because the employers aren't offering them anything real. ^This is why I get mad at people that parrot the "deflation is bad because people hoard currency" line. The absolute value of inflation being large is bad because it causes people to stop socializing due to hording. If you have high inflation like we see here people hoard assets. If you can't trade your money for anything its worthless so why would you trade your time for that?
- deleted 4y ago
  [deleted]
- chii 4y ago
  > We have a huge surplus of unemployed young men, they just have no reason to work how come they got food to eat, and shelter to live in, and water to drink? They must either be living off savings (their own or family's), or living off taxpayers (some sort of unemployment payment). In the latter case, they _do_ have a reason to work. Living off the taxpayer is not a long term sustainable mode of living. If they do not choose to work, because the social security is high enough that they can afford to decline work, then what does it say about social security?
  - usrn 4y ago
    But there's no work they can do that would pay them enough to meaningfully change their situation. That's the problem, it's not like their lives are comfortable and they don't want to work (although there probably are some like this.) The majority are stuck. None of these labor jobs pay enough to let them rent shelter so they're stuck with whoever gives it to them. If they went to work they could buy more cheap toys or nicer food but that's about it. This is why the CPI is a really stupid way to measure inflation. Humans are biological and suffer from the consequences of Liebig's law of minimums. Just because you have a great surplus of something doesn't in any way counteract a shortage of something else. EDIT: If you have a counter argument then post it, don't just downvote.
dalbasal 4y ago
This analytical quip is well beyond cliche. That doesn't mean it isn't worth writing about, but well... these articles don't tend to try very hard. The oil shock wasn't an oil shortage in the same sense. The potentially upcoming grain shortage won't be a shortage either. As long as markets are active, you can buy what you want at the price. Ending the analysis here is silly. There are, very obviously, market conditions where prices spike, plummet, etc. Meanwhile, consumers of goods both overpay and under consume relative to pre-market rates. For labour, the deeper story is the relationship between labour markets and the macroeconomy. The same reasons for "shock," "shortage" or more technical descriptions exist. Labour supply is inflexible: one worker has one person's labour to sell. They can't "ramp up" and overproduce because prices are high. There are some buffers, but these can be maxed out. Under the economic norms/theories of the last generation or two, unemployment rates of 5-6% were considered optimal. Employment buffer stock keep shortages at bay, and prices stable. It was considered an anti inflation policy, and probably has worked. TLDR, full employment is probably inflationary... at least in combination with currently conventional macroeconomic policies.
mcntsh 4y ago
Among the obviously mentally unwell homeless in coastal cities, I also notice more and more (seemingly) healthy young people also living in tents and vans. I guess at a certain point your quality of life working minimum wage isn't so much better than living on the streets.
- Saint_Genet 4y ago
  They live in tents and vans because they work minimum wage
- samatman 4y ago
  It used to be expected that young bachelors would live in boarding houses, with (maybe) a private room with a bed, but shared bathing accommodations, usually with a meal. We made that illegal, effetively, so the entire market between living in a tent and splitting a detached home with roommates is missing. Therefore, you get people who have four hundred a month to spend on a room, with no room that cheap, and they live in a van.
  - TheFreim 4y ago
    > We made that illegal, effetively I've not heard of this, how was it made illegal?
    - samatman 4y ago
      > In 1917, California passed a new hotel act that prevented the building of new hotels with small cubicle rooms.[0] That's California, but it isn't the only place which has restricted SROs. In some places they were explicitly legislated out of existence, others were squeezed out by the sum of various zoning and occupancy restrictions. Things like a requirement that a common kitchen adhere to commercial rather than residential standards, requiring a certain number of bathrooms per resident, and so on. Also very much worth noting that in many cases, a woman's boarding house was presumed by law to be of ill repute, these laws having lasted into recent decades in places (I know this was still on the books in 1990s Chicago, for an example). [0]: https://en.wikipedia.org/wiki/Single_room_occupancy#History https://en.wikipedia.org/wiki/Single_room_occupancy#History
ethagknight 4y ago
Article needs a [2021] tag and isn’t of much benefit when read today since the pandemic was still in full force with significant uncertainty if people could even return to work or if “the next wave” was around the corner to lock us all back down. This author briskly informs me that, no, there isn’t a labor shortage, I “just need to pay more” but later talks up the merits of unemployment benefits that are above the AVERAGE wages of hospitality and leisure jobs (he phrased it negatively/inversely). So yes there is a labor shortage because the government is paying people more money to not participate in employment, and has also restricted foreign work visas. There are good reasons for actions taken back in 2021, but there absolutely was (and continues to be) a shortage of people willing to do what they did the year before. That’s ok. But it is a shortage. The article also mentions someone who left cooking to become a painter because he got tired of being laid off. I thought that was funny- ask painters in 2008 how things went. Thinking about it, cooking is a job that I pay for (as a customer/diner) in a single transaction. I receive a meal, I pay in cash or maybe 30 day finance and that transaction for effort is no longer fungible. It’s over and done. Painting and construction trades in general, on the other hand, are paid for based on 30 yr financing. It is MUCH easier to commit to pay my painter double what he made 2 yrs ago than my cook, because I get 30 yrs typical to figure out the ROI through the rising tides of inflation. As a diner, $25 is just too much for a breakfast plate consumed today and gone tomorrow, so my diner’s proprietor can’t raise menu prices, can’t automate away cooking, can’t afford staff. It’s an interesting conundrum that I don’t see a solution for, and makes me think that small diners in many markets just aren’t really feasible any more, along with many many other silos of customer expectation and business ventures that were reliant on low skill low wage labor.
sneak 4y ago
There is something like twice as many open positions in the USA as there are unemployed people. I'm not sure how changing wages changes that; perhaps it just means a different set of jobs go unfilled.
- Mountain_Skies 4y ago
  Just because a job is advertised doesn't mean the company is looking for that position to be filled.
- samatman 4y ago
  It's because 'unemployed' doesn't mean 'not working', despite what you'd think. It's a specific subcategory of people who are in the labor market (trying to find employment) and not succeeding. Higher wages can and do persuade some of them to enter the market, for instance a mom might need a few hours of childcare a week in order to work full shifts, and if the weekly salary raises enough that this pencils out, she'll start applying.
- 1-6 4y ago
  Companies aren’t necessarily advertising these positions to everyone in the United States. You can make the open jobs number look as good as you want but really they’re specific positions that can only be filled by a certain individual.
- ridgered4 4y ago
  People who have exited the workforce may rejoin it if the bait is good enough. Gas and used cars cost so much now I wouldn't be surprised if a lot of these jobs are money losing to the people doing them.
dgb23 4y ago
Here's something I noticed when talking to or observing others when it comes down to this kind of thing. When people are in unacceptable work situations, which almost always comes down to (at least seemingly) bad management, lack of respect and low wages, they tend to avoid the issue either by leaving and finding a better place or by trying to level up if they have the guts to change anything at all. Often they try and suck it up, which leads to all kind of issues down the line. There is another way, which is negotiating and clearly stating one's goals. Workers tend to underestimate a couple of things: Their value, their ability to work out and improve a workplace situation, and often also the ability of their superiors to change perspective and collaborate on moving forward. And it is understandable. We tend to get taught how to be good worker bees. Reading and writing, math, discipline, shallow/propagandized politics and skills that prepare for work. But we aren't taught how to negotiate, question authority, organization (the real kind, not the following orders kind), collective bargaining, solving conflicts and compromising as equals etc. These are _essential_ life skills. Good leaders respect you if you have these skills, they love to solve problems and improve situations. And it can have powerful long term effects on a workplace if you become active. Freedom and power come from realizing that you already have it.
- dotancohen 4y ago
  > Freedom and power come from realizing that you already have it. Reposted to emphasize. Improving a worker's condition is often cheaper than replacing him.
  - PaulKeeble 4y ago
    There are a lot of companies right now letting people leave who asked for pay rises only to find that not only is it going to cost them 10k to hire someone new but that person will be 30% more than the old employee even asked for and will be starting from scratch.
    - stavros 4y ago
      The upside is that the old employee now got a 10k raise.
engineer_22 4y ago
Very recently there was a struggle over $15 minimum wage for fast food workers. In my state they did change the minimum wage, now fast food workers make $15. I've noticed lately all the fast food shops are consistently understaffed. Are wages really the issue?
- dymk 4y ago
  If a business is having trouble hiring people at $15/hr ($30,000 a year before taxes and wage theft), then they’re still not paying enough. A $15 minimum wage hasn’t kept up with inflation and isn’t a living wage.
  - PaulKeeble 4y ago
    If it had kept up with inflation it would $28 an hour. Says a lot about the vastly growing difference in earnings and how much the poorest have lost out.
- tombert 4y ago
  Where I live (NYC), the minimum wage is $15 an hour, which is certainly better than the federal minimum, but is still basically unlivable in New York. Cheap rent here is on the order of $1,200 a month (and that's for a roach-infested, lead-painted mess of an apartment), not even counting any other expenses. It's expensive enough that I think it prices out a lot of low-wage workers, so I think the answer is "yes", the wages are still an issue, at least in some places.
  - rngname22 4y ago
    You must either really mean Manhattan or you must not have ever looked, because $1200 isn't the bottom for a bedroom. I make software eng. salary and lived in hip parts of Bushwick for 4-5 of the past 6 or so years and paid 875-1100 for a bedroom, and Bushwick is a 'cooler' part of Brooklyn. 30 min to 14th St. Union square in Manhattan on a subway. You can look on Streeteasy right now in Bushwick and see 4 bedroom apartments that net sub-1000 dollar bedrooms. These aren't roach infested, lead paint units, a fair bit will be shoebox sized rooms but modern renovations. If you were to look in an actually poor neighborhood in an unsafe area, or were to push your commuting distance to 45-60 minutes parts of Brooklyn and Queens, you could find cheaper. But it's still true that the poor are being priced out and doing it with a family (with any semblance of privacy / not living 4 people in a bedroom) would be horrid.
lvl102 4y ago
You have all these companies reporting record profit and margins, but somehow they can’t pay people more? We are seeing this behavior all across the supply chain. These companies are skimming more and more off of the top with “pandemic” and “supply chain issue” as excuses. I’d like to think there’s a reckoning for this type of behavior but sadly that would be very naive of me.
- throwaway787544 4y ago
  A reckoning can only happen if we make it happen.
  - routerl 4y ago
    Unfortunately, there's just not enough solidarity between workers in the tech industry: e.g. Java programmers who develop features often see themselves as a different class of professional (and people) than Java programmers who develop tests, even though their jobs occupy the same pixel in the spectrum of all jobs. This internal stratification of a profession has always been common in engineering disciplines, but in tech it has been exaggerated to the degree that, often, workers see themselves as members of a singleton class, thinking their situation is totally unique. The solution to this problem is also as old as time: workers need to get used to sharing and talking about their grievances. So, as an example, for a work force that is systematically underpaid, first we have to eradicate the mindset of "it is shameful to be paid less than average", so that people will talk about their pay, find common grievances, and then potentially act collectively.
- deleted 4y ago
  [deleted]
- spaetzleesser 4y ago
  "You have all these companies reporting record profit and margins, but somehow they can’t pay people more? We are seeing this behavior all across the supply chain. These companies are skimming more and more off of the top with “pandemic” and “supply chain issue” as excuses. I’d like to think there’s a reckoning for this type of behavior but sadly that would be very naive of me." Super yachts are becoming more and more expensive. They can't afford to pay people more.
snidane 4y ago
Labor shortage is a wage shortage is a housing shortage is an urban land shortage. When housing is so expensive, why would low wagies bother if they can't afford a rent. They end up on the street regardless of working. Housing shortage in just a land shortage in urban areas. There are not that many places to rent compared to the size of the city. Most buildings are out of the market, not suitable for renting out and the owner is cash strapped to get it into a livable condition. Since housing keeps appreciating at such rates lately the owners suck it up with property taxes and depreciation and just keep sitting idle on properties. The houses are out of market because the owner is asset rich, but cash poor, but nobody forces him to sell back to the market. It's a liquidity problem, not in money, but in houses. When unused housing from asset rich but cash poor owners, who got properties through inheritance, sits idle and never returns to the market, there is no supply and demand dynamic in the market anymore. The market doesn't clear and brings the economy to the halt. (One solution is LVT to force market clearing).
- logicalmonster 4y ago
  > Housing shortage in just a land shortage in urban areas. You're talking about supply when you mention housing shortages, but let's look at the other part of the equation in a shortage: demand. Another perspective for a housing shortage might be to call it a people surplus. I don't blame anybody for seeking a better life, but I'd think at some point, an excess amount of illegal migration would have a noticeable impact in some areas. > housing sits idle Just curious on if there's a good estimate of how many houses sit idle and unused and if this has increased or decreased over time? I'm sure that some housing sits unused, but if it's a few thousand homes in an area where there's say a few hundred thousand families looking to buy, I'm not sure if that really makes a huge dent.
  - frankbreetz 4y ago
    There are over 16 million vacant homes in the US[0]. There is also only over 500k homeless people in the US[1] meaning we could house each homeless person around 32 times over. I think it could make quite a large dent [0]https://www.newsnationnow.com/us-news/report-how-many-homes-are-sitting-empty-in-your-state/ https://www.newsnationnow.com/us-news/report-how-many-homes-... [1]https://policyadvice.net/insurance/insights/homelessness-statistics/ https://policyadvice.net/insurance/insights/homelessness-sta...
iandanforth 4y ago
Population growth by birth and immigration in the US has slowed and has been slowing for a long time now. I would be surprised if this had no effect on the labor pool and yet the article doesn't mention it.
- twoodfin 4y ago
  Indeed. Unemployment is at historic lows while workforce participation is headed back toward highs not seen in decades. https://fred.stlouisfed.org/series/LNS11300060 https://fred.stlouisfed.org/series/LNS11300060 This is a labor supply problem.
  - jmoak3 4y ago
    To add to your all’s points, here’s the link to the labor force participation rate for all ages: https://fred.stlouisfed.org/series/CIVPART https://fred.stlouisfed.org/series/CIVPART We simply have a larger share of the population that is too old to work, when compared to previous decades. We’re entering a new era: expect more unions, more livable wages, a lessened quality of life on average, and above all - a higher level of inflation than the last 40 years. There will be winners and losers. If you’re a worker you will be fine, but make sure to take care of your parents. Also, be sure to keep your parents from voting to secure access to the value created by your labor. Expect to see tons of measures to freeze property taxes, add price controls, and expand exclusive senior benefits they will kick and scream for to keep their purchasing power high at the expense of anyone capable of having a child.
- Pigalowda 4y ago
  The nation's immigrant population (legal and illegal) hit a record 43.7 million in July 2016, an increase of half a million since 2015, 3.8 million since 2010, and 12.6 million since 2000. As a share of the U.S. population, immigrants (legal and illegal) comprised 13.5 percent, or one out of eight U.S. residents in 2016, the highest percentage in 106 years. As recently as 1980, just one out of 16 residents was foreign-born.
TradingPlaces 4y ago
In March, there were 1.9 job openings for every job seeker. This is the tightest labor market in history. April data this week (I expect it to be down a little) https://fred.stlouisfed.org/graph/?g=Q1Po https://fred.stlouisfed.org/graph/?g=Q1Po The reasons are workers who left the workforce in the pandemic (many older or women with children), and the lack of immigration.
- ldiracdelta 4y ago
  Sounds like an advantageous negotiating position for those supplying the labor.
  - TradingPlaces 4y ago
    Yes. Labor demand is softening a bit, but actually kind of welcome because it is an inflation driver. April data just out. March revised up, so it was actually 2.0 openings per job seeker, April ticked down to 1.9 https://fred.stlouisfed.org/graph/fredgraph.png?g=Q27U https://fred.stlouisfed.org/graph/fredgraph.png?g=Q27U
- s1artibartfast 4y ago
  >This is the tightest labor market in history. This data only goes back to 2000. Do you have more data to support this claim? Not to discredit your point, I really appreciate someone bringing actual numbers to this discussion. It is noteworthy how high it is.
  - TradingPlaces 4y ago
    JOLTS started then, and “job openings” is the JO in JOLTS. So no, but there are many other indicators as well, beginning with an unemployment rate near all time lows, and wages going up rapidly. FWIW, the second tightest was February 2020
whiddershins 4y ago
Everything is an energy shortage in the end.
- honkler 4y ago
  found a fellow JMG fan.
  - whatisjmg 4y ago
    who is jmg?
    - honkler 4y ago
      john michael greer
PaulKeeble 4y ago
I think it might also be a disability issue. Long covid is no joke and the ONS today announced the UK has 2 million sufferers. Some 1.4 million of those are heavily affected by the condition and many wont be able to work. These people are mostly of working age, that is a very large amount of people to loose in a country with 39 million working age people.
lallysingh 4y ago
Don't we usually give the low-pay, undesirable jobs to immigrants? Where are they?
- benstrumental 4y ago
  Strict immigration policies during the previous presidency combined with the pandemic have led to record low immigration. Census projections generally expected immigration levels to remain constant. However, immigration plummeted from a net gain of ~1000k/year in 2016 to ~250k/year in 2020[1]. [1] https://www.brookings.edu/research/u-s-population-growth-has-nearly-flatlined-new-census-data-shows/ https://www.brookings.edu/research/u-s-population-growth-has...
dools 4y ago
Can confirm that every time I have wanted to hire someone and didn’t get the right applicants, I offered more money and did get the right applicants
- TuringNYC 4y ago
  I love this comment! You made my day.
- Cd00d 4y ago
  That's interesting, but how does it work? Of the jobs I've applied to it's been exceedingly rare that I knew the pay at the time of the application.
acalzycalzy 4y ago
Not true at all. A lot of people simply do not want to work. I know the manager of a Costco, and people come to work on their first day and then leave during their lunch break never to return. Costco offers great pay and benefits. The biggest thing people don’t talk about is a lot of workers got paid to stay home during Covid. In essence, they were living like the 1% and got used to it. Now they don’t want to go back to living their pre-covid life but guess what? Everyone can’t be part of the 1%.
- honkler 4y ago
  >Everyone can’t be part of the 1% So no one should be a part of it. I mean, no one should be let to sit on their ass and get rent. That's a good deal.
  - acalzycalzy 4y ago
    Why shouldn’t anyone? If i bust my ass and start a business and employ 100 people and make enough to buy 3 ferraris - is that a problem?
    - honkler 4y ago
      as long as you work, you get money. You won't be allowed to "let your money work for you".
- chrsw 4y ago
  You think getting an unemployment check is "living like the 1%"?
  - acalzycalzy 4y ago
    People who are used to making betweeen minimum wage and say $20/hr - getting their standard unemployment check PLUS $600 a week? - ya to them that was living like the 1%: staying home and making more than they were making before and doing what they want.
cmrdporcupine 4y ago
Lots of money to shareholders or decent money to employees. Pick one. But I think there's a bias in our economic model towards the former. (Most companies are not Google. They don't have such an insane firefose of revenue coming in that they can dump giant compensation packages on people and give them free food and discounted massages and also at the same time get year-over-year 20% revenue growth every quarter) I also think small businesses are genuinely squeezed and it's tough for them to pay a competitive wage and also keep the business afloat.... but honestly, employees don't owe them anything. If the business can't make it, it can't make it.
- Aerroon 4y ago
  >If the business can't make it, it can't make it. I think this is how it should be, but we have a tendency to cry foul. If enough of these businesses go under and unemployment soars, then we have a tendency to turn to government/politics and demand that they change the economy by decree.
  - engineer_22 4y ago
    Except for PPP, is there a time that small business was given big handouts from the Federal Govt?
    - Aerroon 4y ago
      I do not know the answer to this. I was thinking in broader terms about political instability that can come from a surge in large enough scale employment disruption.
- engineer_22 4y ago
  This comment reminds me of a concept I've just heard of: financialization. When assets in the real economy are owned by securities markets and directed by professional managers. https://equitablegrowth.org/the-rising-financialization-of-the-u-s-economy-harms-workers-and-their-families-threatening-a-strong-recovery/ https://equitablegrowth.org/the-rising-financialization-of-t...
trelane 4y ago
An interesting bit of info was pointed out to me by an acquaintance in the restaurant industry. Small mom and pop places are losing staff because the big chains can afford to pay their workers more, since they can better afford the losses (smaller profit per site but more sites.) I'm a huge fan of increasing wages, but I also don't want even more soulless mega chains.
- urthor 4y ago
  That's competition. Little stores have to sell better shit than big stores to be worth the money. I see plenty of little stores that work where I live. They have to be upmarket, but they work.
- the_only_law 4y ago
  when I visited in my family in Kentucky, the local McDonald’s was paying as much as the Plumbing company and much more than the local manufacturing plant.
- nradov 4y ago
  Big chains can't "afford" losses. If a store is losing money then they'll bring in an experienced manager to turn it around, and if that doesn't work then they'll shut it down.
  - trelane 4y ago
    "loss" was inelegant wording. I meant "less profit." Note the text in parens.
- pessimizer 4y ago
  I like little stores over chains, too, but the lion's share of little stores are run by small business tyrants with the ultimate goal of turning them into passive income. Your salary is their obstacle.
adam_arthur 4y ago
If you have 100 prospective employees and 200 jobs, there's a labor shortage by definition. This setup leads to a wage price spiral, as competitors continue to raise wages to poach employees, and people ping pong between jobs frequently for pay raises. There is an aspect of LFP where higher wages may draw in new employees, but there's not a huge well to tap there. Labor market is hotter than ever before, while LFP is declining. Pretty fair to call it a labor shortage. Though more accurately I'd call it an overheated economy. Typically the Fed triggers a recession under these circumstances. Also keep in mind rising nominal wages above productivity gains does not benefit workers at all. It has to be real wage gains. Real wages have been declining at a record pace
- michael1999 4y ago
  Both labour supply and demand have normal curves. Low-value employers will be priced out until there are 110 openings, and 10 people come out of retirement.
  - adam_arthur 4y ago
    Yes either openings decline or labor supply increases. Demographic trend is toward lower labor supply though, so most likely outcome is number of job openings needs to be decreased to solve inflation. Again, real wages have been declining so people are getting poorer despite increasing nominal wages. It kind of boggles the mind seeing people talk about wages in nominal terms like it means anything. The poor and downtrodden will suffer most in the end as a result of the steps necessary to control inflation.
burlesona 4y ago
This article is a year old, needs (2021) in the title.
kube-system 4y ago
Just because a business can raise wages and attract employees doesn’t mean there’s not a labor shortage. Many people who take a newly higher-paying job leave another job. If both jobs raised their wages, that person will still just choose the better paying one. A lot of why this is happening to service industry employees is because they were forced to look for new jobs when laid off, and found that other industries already offered a way better overall experience.
tootie 4y ago
This year-old article is definitely wrong and we definitely have a labor shortage. https://fred.stlouisfed.org/graph/?g=P0D0 https://fred.stlouisfed.org/graph/?g=P0D0 Prime-age employment-population ratio is exactly where it was pre-pandemic and UNRATE is near all-time lows. Population growth is slowing and retirements rose substantially. Everyone keeps looking for these cultural shifts or policy failures, but all our economic troubles (labor, housing, inflation) are still easily explainable by simple supply and demand.
- carapace 4y ago
  This reminds me of the fellow who looked at historical data on rents in San Francisco going back to 1948 and found that "Today's outrageous prices are exactly in line with the 6.6% trend that began 60 years ago." ~ "Employment, construction, and the cost of San Francisco apartments" https://experimental-geography.blogspot.com/2016/05/employment-construction-and-cost-of-san.html https://experimental-geography.blogspot.com/2016/05/employme... It's a fascinating article, well worth the read.
- s1artibartfast 4y ago
  Interestingly, the numbers for men tell a different story, with all time low male employment. It stands to reason that some male dominated industries may be seeing a different phenomenon. https://fred.stlouisfed.org/series/LNS12300001 https://fred.stlouisfed.org/series/LNS12300001
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settrans 4y ago
Perhaps if we weren't subjecting the tens of millions of Americans in the $15,000 - $40,000 income range to effective marginal tax rates of up to 103% [0], we would see more labor force participation. Between income tax and benefit phaseout, it can literally cost money to get a raise in our system today [1]. [0] https://fullstackeconomics.com/103-percent-the-hidden-tax-rates-of-means-testing/ https://fullstackeconomics.com/103-percent-the-hidden-tax-ra... [1] https://www.heritage.org/taxes/report/effective-marginal-tax-rates-low-income-workers-are-high https://www.heritage.org/taxes/report/effective-marginal-tax... P.S. if you account for need-based financial aid scholarships for college, the situation is even more dire.
- maerF0x0 4y ago
  IMO this is one of the arguments for dismantling the social bureaucracy and implementing a Friedman like UBI . I highly recommend watching the whole series, but here's a direct clip to the idea ("negative income tax") https://youtu.be/ysf-5MdWDt0?t=1519 https://youtu.be/ysf-5MdWDt0?t=1519
  - settrans 4y ago
    I'm familiar with the idea - but the biggest challenge with UBI is not that it's inherently a bad idea (as you note, it effectively adds a negative intercept to the marginal system), rather that it is unlikely to replace welfare systems in a lasting fashion. There are two problems: 1. UBI would be too expensive if it were to replace welfare. You can't just keep the total welfare spending of $1.16T [0] and smear it across the whole population, since that would significantly reduce the support of families receiving welfare today (since you'd be distributing the benefit _universally_). If you wanted to keep the average payout to welfare recipients the same, you would need to dole out $65,200 (the average welfare benefit) to each of the 122 million households in America, balooning UBI spending to nearly $8T, over 1/3 of US GDP. But even that wouldn't be enough, since many families depend on even more welfare benefits, since all we did was pay out the average. Suppose you paid out the 80th percentile instead (for sake of argument, assume that's $90,000), now your welfare bill is $11T, or half of GDP. Needless to say, you'd need a lot of taxes to pay for this, and the US would shoot up to the highest-taxed nation on earth. 2. Even this wouldn't be enough: the same social forces that push to expand and grow the welfare bureaucracy today would continue to exist, and I would expect them to cause the reintroduction of welfare even if abolished under the introduction of UBI. Families receiving direct financial support under UBI could (and would) starve, suffer costly medical expenses, and otherwise need additional support, and thus create demand for welfare afresh. [0] https://www.heritage.org/welfare/report/largest-welfare-increase-us-history-will-boost-government-support-76400-poor-family https://www.heritage.org/welfare/report/largest-welfare-incr...
mihaic 4y ago
While I feel like the direct cause of the current situation really is a wage shortage, I'm thinking more that the root cause of the situation is how much harder it is to build any value adding business. The economy is becoming hyper-abstracted, and if you're not a company that can scale on a simple niche, you're pretty much screwed. Regardless, right now it seem like the symptoms need treatment first, and the only real solution is redistributing money from those earning money from capital-gains and rent-seeking. The US seem to be designed to never do this, so we might actually need a social collapse for something to change.
jmoak3 4y ago
I recommend everyone who reads this comment to pick up a copy of The Great Demographic Reversal by Charles Goodhart & Manoj Pradhan, a book on the cost-rising effects of aging populations among advanced economies.
smaryjerry 4y ago
A wage shortage does not matter if people have enough money already. This is why we have inflation and low unemployment rates. People don’t need to work because overall they have had more money than they needed. This means we run out of things- everything- because everyone has enough money and the prices of everything needs to increase before people stop buying up the supply of everything. This is a side effect of influx of money put into the system by the fed and by the government. If people have enough money, they don’t need to work and stop working. Prices go up from inflation causing them to start to need money again and start working. So the labor shortage is not due to a wage shortage except in specific industries.
lkxijlewlf 4y ago
The Fed (specifically Powell), thinks wages are too high and need to be brought down.
Blackstrat 4y ago
I live in a large city with a very low cost of living, median per capita income about $30K. Fast food restaurants are offering starting wages of $15-18/hr (median to above), healthcare, tuition assistance, etc. and can't find people to work. The combination of inflated expectations of their value, government handouts, and being "too good" to work some jobs is the problem. It's not worker exploitation. That's pure Marxist BS. I came from a struggling blue collar household in the Midwest and worked from the time I was 15. Some of the jobs were terrible, long hours, dirty work, etc. But eventually I got to where I wanted to be and subsequently retired comfortably. The bottom line is people need to quit making excuses and whining about their exploitation and apply themselves. Work hard, finish school, learn something useful - gender studies et al aren't, and build a life. You are responsible for your own fate - not anyone else and not the government.

257 points by webmobdev 4y ago

I wonder about this. My 70-year old dad retired and would like to work more, but his body just can’t anymore. Sure, we might be able to pay these people more to work, but think about how unhealthy the population is getting. Wage shortage might be another way of saying health shortage, we just don’t have the strength to get to work (obesity is reaching 50% of the population abouts…)

tyingq 4y ago
That's not what I'm seeing in the US. Well, not that it doesn't exist, but it doesn't appear to be the main problem. The problem is easy to see at the low end. Some employers have finally decided to pay a somewhat decent wage for "no experience needed" type work. There's even a few national fast food and retail chains that latched onto that and are paying $15/hr+. So, for the employers left paying between minumum wage ($7.25/hr) and say $14/hour, what kind of pool of employees are they pulling from? Who is willing to take significantly less than they can trivially get across the street, down the block, etc?
- aperson_hello 4y ago
  They're pulling felons, people who can't pass a drug test, and people who won't leave due to a perverse sense of loyalty or fear of change. If they drug test or background check, then they're going under while complaining that no one wants to work.
Finnucane 4y ago
Decades of relatively stagnant wages have left many unable to save for retirement.
- tyingq 4y ago
  Also the transition from pensions to 401k.
yakak 4y ago
I don't think we really want a lot of pensioners to return to work though that may be an eventual need. The numbers for younger males are pretty bad and their never working means a lifetime of social services. Sure statistically they have various health problems in excess of past generations but I think it is rare that they can't do lighter service jobs which should mean more drastic difference in pay or qualifications for heavier service jobs than I usually saw in the US (though I may be out of date on this). Things like ruining a worker by funneling kids through a piecemeal system that ultimately pushes them towards a rap sheet or just some kind of permanent black marks in education are much more significant problems that lead to a lot of young men sitting around either at home or in groups on streets depending on social/economic levels of their families, etc.
jtdev 4y ago
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mrfusion 4y ago

It’s also a respect shortage, and a flexibility shortage, and a plannable scheduling shortage.

yardie 4y ago
People will put up with almost anything for a price but they won't put up with eating shit while making shit wages. An executive assistant makes $100k+ to be a personal punching bag. And the main requirements for the job is be organized, be discrete, be willing to put up with a lot.
- tombert 4y ago
  When I was a teenager, I was a little asshole to fast food and phone tech-support workers (basically falling into the "Karen" stereotype of people). I feel pretty bad about that now, because of course these people don't make nearly enough to put up with me being a douchebag to them. It's entirely possible that I ruined at least a few people's day by being a dick, for no other reason than I was unwilling to realize that people making minimum wage really shouldn't be yelled at unless they're mean first (which they generally aren't). Nowadays I try and be extremely polite to people serving me food or checking me out at the grocery store, and make a point to only be mean to people whose job it is to be yelled at.
  - circlefavshape 4y ago
    How about not being mean to anyone?
    - tombert 4y ago
      I don't think that's always the best policy; I agree that 99% of the time you should be nice to everyone, but there are times when a company simply will not do what you need them to do unless you're a bit of a douchebag to them. I'm not saying you get personal and insult their mothers or anything, but being impolite and slightly aggressive is (sadly) sometimes necessary.

xadhominemx 4y ago

The same is true of almost any shortage. You can almost always get what you want, for a price. Whether that price makes economic sense for a business to pay is a different question.

phenkdo 4y ago
Absolutely! The "no shortage if you pay enough" slogan is a double-edged sword. - Is there a housing shortage if you pay enough? or - is there a health-care shortage if you pay enough? : : on & on.
- paskozdilar 4y ago
  So every shortage is just money shortage.
  - ivoras 4y ago
    Money is basically just a way to motivate other people to do something for you :D We as a civilisation obviously CAN build houses, utilities, hairdressers, space rockets, grow food, etc. - the question is simply "why" (in the literal, low-level sense: why would I do that for you? even if the economy at large would benefit from it, I just don't feel like working today, and besides, I don't know you well enough). And money (and capitalism in general) is a flawed, crude, but so far the only way the "why" gets answered for the majority of people. Another way of making someone do something for you, obviously, is to be very, very persuasive.
    - nicoburns 4y ago
      Money is a way of measuring how much economic power someone (or some legal entity) has accrued. If you have money, then you can get someone to do something for YOU. Whether the economy at large will benefit from it depends entirely on whether those with money spend it wisely. This tends to work out reasonably well so long as (monetary) wealth is relatively evenly-spread. But not always. And of course, money in contemporary society is not that evenly spread.

panny 4y ago

[flagged]

ceejayoz 4y ago
What professions outside of healthcare and the military are turning away unvaccinated workers in any significant numbers? https://www.cnbc.com/2022/05/10/employers-requiring-a-vaccine-mandate-for-job-applicants-is-declining.html https://www.cnbc.com/2022/05/10/employers-requiring-a-vaccin... indicates it's single-digit numbers, and I'd expect those to largely be stuff like healthcare and teachers.
- panny 4y ago
  Article is May 2021, when Biden's vax mandates were just starting full swing. Your link is a year later when companies realized what a gigantic mistake they had made. https://www.nbcnews.com/business/business-news/here-are-companies-mandating-vaccines-all-or-some-employees-n1275808 https://www.nbcnews.com/business/business-news/here-are-comp...
thematrixturtle 4y ago
The minimum wage type jobs the article is talking about generally couldn't care less about vaccination.

usrn 4y ago

It's all a housing shortage^ really. If working doesn't get you anything and you still have to be completely dependent on someone then why bother? There is not a shortage of workers. We have a huge surplus of unemployed young men, they just have no reason to work because the employers aren't offering them anything real. ^This is why I get mad at people that parrot the "deflation is bad because people hoard currency" line. The absolute value of inflation being large is bad because it causes people to stop socializing due to hording. If you have high inflation like we see here people hoard assets. If you can't trade your money for anything its worthless so why would you trade your time for that?

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chii 4y ago
> We have a huge surplus of unemployed young men, they just have no reason to work how come they got food to eat, and shelter to live in, and water to drink? They must either be living off savings (their own or family's), or living off taxpayers (some sort of unemployment payment). In the latter case, they _do_ have a reason to work. Living off the taxpayer is not a long term sustainable mode of living. If they do not choose to work, because the social security is high enough that they can afford to decline work, then what does it say about social security?
- usrn 4y ago
  But there's no work they can do that would pay them enough to meaningfully change their situation. That's the problem, it's not like their lives are comfortable and they don't want to work (although there probably are some like this.) The majority are stuck. None of these labor jobs pay enough to let them rent shelter so they're stuck with whoever gives it to them. If they went to work they could buy more cheap toys or nicer food but that's about it. This is why the CPI is a really stupid way to measure inflation. Humans are biological and suffer from the consequences of Liebig's law of minimums. Just because you have a great surplus of something doesn't in any way counteract a shortage of something else. EDIT: If you have a counter argument then post it, don't just downvote.

dalbasal 4y ago

This analytical quip is well beyond cliche. That doesn't mean it isn't worth writing about, but well... these articles don't tend to try very hard. The oil shock wasn't an oil shortage in the same sense. The potentially upcoming grain shortage won't be a shortage either. As long as markets are active, you can buy what you want at the price. Ending the analysis here is silly. There are, very obviously, market conditions where prices spike, plummet, etc. Meanwhile, consumers of goods both overpay and under consume relative to pre-market rates. For labour, the deeper story is the relationship between labour markets and the macroeconomy. The same reasons for "shock," "shortage" or more technical descriptions exist. Labour supply is inflexible: one worker has one person's labour to sell. They can't "ramp up" and overproduce because prices are high. There are some buffers, but these can be maxed out. Under the economic norms/theories of the last generation or two, unemployment rates of 5-6% were considered optimal. Employment buffer stock keep shortages at bay, and prices stable. It was considered an anti inflation policy, and probably has worked. TLDR, full employment is probably inflationary... at least in combination with currently conventional macroeconomic policies.

mcntsh 4y ago

Among the obviously mentally unwell homeless in coastal cities, I also notice more and more (seemingly) healthy young people also living in tents and vans. I guess at a certain point your quality of life working minimum wage isn't so much better than living on the streets.

Saint_Genet 4y ago
They live in tents and vans because they work minimum wage
samatman 4y ago
It used to be expected that young bachelors would live in boarding houses, with (maybe) a private room with a bed, but shared bathing accommodations, usually with a meal. We made that illegal, effetively, so the entire market between living in a tent and splitting a detached home with roommates is missing. Therefore, you get people who have four hundred a month to spend on a room, with no room that cheap, and they live in a van.
- TheFreim 4y ago
  > We made that illegal, effetively I've not heard of this, how was it made illegal?
  - samatman 4y ago
    > In 1917, California passed a new hotel act that prevented the building of new hotels with small cubicle rooms.[0] That's California, but it isn't the only place which has restricted SROs. In some places they were explicitly legislated out of existence, others were squeezed out by the sum of various zoning and occupancy restrictions. Things like a requirement that a common kitchen adhere to commercial rather than residential standards, requiring a certain number of bathrooms per resident, and so on. Also very much worth noting that in many cases, a woman's boarding house was presumed by law to be of ill repute, these laws having lasted into recent decades in places (I know this was still on the books in 1990s Chicago, for an example). [0]: https://en.wikipedia.org/wiki/Single_room_occupancy#History https://en.wikipedia.org/wiki/Single_room_occupancy#History

ethagknight 4y ago

Article needs a [2021] tag and isn’t of much benefit when read today since the pandemic was still in full force with significant uncertainty if people could even return to work or if “the next wave” was around the corner to lock us all back down. This author briskly informs me that, no, there isn’t a labor shortage, I “just need to pay more” but later talks up the merits of unemployment benefits that are above the AVERAGE wages of hospitality and leisure jobs (he phrased it negatively/inversely). So yes there is a labor shortage because the government is paying people more money to not participate in employment, and has also restricted foreign work visas. There are good reasons for actions taken back in 2021, but there absolutely was (and continues to be) a shortage of people willing to do what they did the year before. That’s ok. But it is a shortage. The article also mentions someone who left cooking to become a painter because he got tired of being laid off. I thought that was funny- ask painters in 2008 how things went. Thinking about it, cooking is a job that I pay for (as a customer/diner) in a single transaction. I receive a meal, I pay in cash or maybe 30 day finance and that transaction for effort is no longer fungible. It’s over and done. Painting and construction trades in general, on the other hand, are paid for based on 30 yr financing. It is MUCH easier to commit to pay my painter double what he made 2 yrs ago than my cook, because I get 30 yrs typical to figure out the ROI through the rising tides of inflation. As a diner, $25 is just too much for a breakfast plate consumed today and gone tomorrow, so my diner’s proprietor can’t raise menu prices, can’t automate away cooking, can’t afford staff. It’s an interesting conundrum that I don’t see a solution for, and makes me think that small diners in many markets just aren’t really feasible any more, along with many many other silos of customer expectation and business ventures that were reliant on low skill low wage labor.

sneak 4y ago

There is something like twice as many open positions in the USA as there are unemployed people. I'm not sure how changing wages changes that; perhaps it just means a different set of jobs go unfilled.

Mountain_Skies 4y ago
Just because a job is advertised doesn't mean the company is looking for that position to be filled.
samatman 4y ago
It's because 'unemployed' doesn't mean 'not working', despite what you'd think. It's a specific subcategory of people who are in the labor market (trying to find employment) and not succeeding. Higher wages can and do persuade some of them to enter the market, for instance a mom might need a few hours of childcare a week in order to work full shifts, and if the weekly salary raises enough that this pencils out, she'll start applying.
1-6 4y ago
Companies aren’t necessarily advertising these positions to everyone in the United States. You can make the open jobs number look as good as you want but really they’re specific positions that can only be filled by a certain individual.
ridgered4 4y ago
People who have exited the workforce may rejoin it if the bait is good enough. Gas and used cars cost so much now I wouldn't be surprised if a lot of these jobs are money losing to the people doing them.

dgb23 4y ago

Here's something I noticed when talking to or observing others when it comes down to this kind of thing. When people are in unacceptable work situations, which almost always comes down to (at least seemingly) bad management, lack of respect and low wages, they tend to avoid the issue either by leaving and finding a better place or by trying to level up if they have the guts to change anything at all. Often they try and suck it up, which leads to all kind of issues down the line. There is another way, which is negotiating and clearly stating one's goals. Workers tend to underestimate a couple of things: Their value, their ability to work out and improve a workplace situation, and often also the ability of their superiors to change perspective and collaborate on moving forward. And it is understandable. We tend to get taught how to be good worker bees. Reading and writing, math, discipline, shallow/propagandized politics and skills that prepare for work. But we aren't taught how to negotiate, question authority, organization (the real kind, not the following orders kind), collective bargaining, solving conflicts and compromising as equals etc. These are _essential_ life skills. Good leaders respect you if you have these skills, they love to solve problems and improve situations. And it can have powerful long term effects on a workplace if you become active. Freedom and power come from realizing that you already have it.

dotancohen 4y ago
> Freedom and power come from realizing that you already have it. Reposted to emphasize. Improving a worker's condition is often cheaper than replacing him.
- PaulKeeble 4y ago
  There are a lot of companies right now letting people leave who asked for pay rises only to find that not only is it going to cost them 10k to hire someone new but that person will be 30% more than the old employee even asked for and will be starting from scratch.
  - stavros 4y ago
    The upside is that the old employee now got a 10k raise.

engineer_22 4y ago

Very recently there was a struggle over $15 minimum wage for fast food workers. In my state they did change the minimum wage, now fast food workers make $15. I've noticed lately all the fast food shops are consistently understaffed. Are wages really the issue?

dymk 4y ago
If a business is having trouble hiring people at $15/hr ($30,000 a year before taxes and wage theft), then they’re still not paying enough. A $15 minimum wage hasn’t kept up with inflation and isn’t a living wage.
- PaulKeeble 4y ago
  If it had kept up with inflation it would $28 an hour. Says a lot about the vastly growing difference in earnings and how much the poorest have lost out.
tombert 4y ago
Where I live (NYC), the minimum wage is $15 an hour, which is certainly better than the federal minimum, but is still basically unlivable in New York. Cheap rent here is on the order of $1,200 a month (and that's for a roach-infested, lead-painted mess of an apartment), not even counting any other expenses. It's expensive enough that I think it prices out a lot of low-wage workers, so I think the answer is "yes", the wages are still an issue, at least in some places.
- rngname22 4y ago
  You must either really mean Manhattan or you must not have ever looked, because $1200 isn't the bottom for a bedroom. I make software eng. salary and lived in hip parts of Bushwick for 4-5 of the past 6 or so years and paid 875-1100 for a bedroom, and Bushwick is a 'cooler' part of Brooklyn. 30 min to 14th St. Union square in Manhattan on a subway. You can look on Streeteasy right now in Bushwick and see 4 bedroom apartments that net sub-1000 dollar bedrooms. These aren't roach infested, lead paint units, a fair bit will be shoebox sized rooms but modern renovations. If you were to look in an actually poor neighborhood in an unsafe area, or were to push your commuting distance to 45-60 minutes parts of Brooklyn and Queens, you could find cheaper. But it's still true that the poor are being priced out and doing it with a family (with any semblance of privacy / not living 4 people in a bedroom) would be horrid.

lvl102 4y ago

You have all these companies reporting record profit and margins, but somehow they can’t pay people more? We are seeing this behavior all across the supply chain. These companies are skimming more and more off of the top with “pandemic” and “supply chain issue” as excuses. I’d like to think there’s a reckoning for this type of behavior but sadly that would be very naive of me.

throwaway787544 4y ago
A reckoning can only happen if we make it happen.
- routerl 4y ago
  Unfortunately, there's just not enough solidarity between workers in the tech industry: e.g. Java programmers who develop features often see themselves as a different class of professional (and people) than Java programmers who develop tests, even though their jobs occupy the same pixel in the spectrum of all jobs. This internal stratification of a profession has always been common in engineering disciplines, but in tech it has been exaggerated to the degree that, often, workers see themselves as members of a singleton class, thinking their situation is totally unique. The solution to this problem is also as old as time: workers need to get used to sharing and talking about their grievances. So, as an example, for a work force that is systematically underpaid, first we have to eradicate the mindset of "it is shameful to be paid less than average", so that people will talk about their pay, find common grievances, and then potentially act collectively.
deleted 4y ago
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spaetzleesser 4y ago
"You have all these companies reporting record profit and margins, but somehow they can’t pay people more? We are seeing this behavior all across the supply chain. These companies are skimming more and more off of the top with “pandemic” and “supply chain issue” as excuses. I’d like to think there’s a reckoning for this type of behavior but sadly that would be very naive of me." Super yachts are becoming more and more expensive. They can't afford to pay people more.

snidane 4y ago

Labor shortage is a wage shortage is a housing shortage is an urban land shortage. When housing is so expensive, why would low wagies bother if they can't afford a rent. They end up on the street regardless of working. Housing shortage in just a land shortage in urban areas. There are not that many places to rent compared to the size of the city. Most buildings are out of the market, not suitable for renting out and the owner is cash strapped to get it into a livable condition. Since housing keeps appreciating at such rates lately the owners suck it up with property taxes and depreciation and just keep sitting idle on properties. The houses are out of market because the owner is asset rich, but cash poor, but nobody forces him to sell back to the market. It's a liquidity problem, not in money, but in houses. When unused housing from asset rich but cash poor owners, who got properties through inheritance, sits idle and never returns to the market, there is no supply and demand dynamic in the market anymore. The market doesn't clear and brings the economy to the halt. (One solution is LVT to force market clearing).

logicalmonster 4y ago
> Housing shortage in just a land shortage in urban areas. You're talking about supply when you mention housing shortages, but let's look at the other part of the equation in a shortage: demand. Another perspective for a housing shortage might be to call it a people surplus. I don't blame anybody for seeking a better life, but I'd think at some point, an excess amount of illegal migration would have a noticeable impact in some areas. > housing sits idle Just curious on if there's a good estimate of how many houses sit idle and unused and if this has increased or decreased over time? I'm sure that some housing sits unused, but if it's a few thousand homes in an area where there's say a few hundred thousand families looking to buy, I'm not sure if that really makes a huge dent.
- frankbreetz 4y ago
  There are over 16 million vacant homes in the US[0]. There is also only over 500k homeless people in the US[1] meaning we could house each homeless person around 32 times over. I think it could make quite a large dent [0]https://www.newsnationnow.com/us-news/report-how-many-homes-are-sitting-empty-in-your-state/ https://www.newsnationnow.com/us-news/report-how-many-homes-... [1]https://policyadvice.net/insurance/insights/homelessness-statistics/ https://policyadvice.net/insurance/insights/homelessness-sta...

iandanforth 4y ago

Population growth by birth and immigration in the US has slowed and has been slowing for a long time now. I would be surprised if this had no effect on the labor pool and yet the article doesn't mention it.

twoodfin 4y ago
Indeed. Unemployment is at historic lows while workforce participation is headed back toward highs not seen in decades. https://fred.stlouisfed.org/series/LNS11300060 https://fred.stlouisfed.org/series/LNS11300060 This is a labor supply problem.
- jmoak3 4y ago
  To add to your all’s points, here’s the link to the labor force participation rate for all ages: https://fred.stlouisfed.org/series/CIVPART https://fred.stlouisfed.org/series/CIVPART We simply have a larger share of the population that is too old to work, when compared to previous decades. We’re entering a new era: expect more unions, more livable wages, a lessened quality of life on average, and above all - a higher level of inflation than the last 40 years. There will be winners and losers. If you’re a worker you will be fine, but make sure to take care of your parents. Also, be sure to keep your parents from voting to secure access to the value created by your labor. Expect to see tons of measures to freeze property taxes, add price controls, and expand exclusive senior benefits they will kick and scream for to keep their purchasing power high at the expense of anyone capable of having a child.
Pigalowda 4y ago
The nation's immigrant population (legal and illegal) hit a record 43.7 million in July 2016, an increase of half a million since 2015, 3.8 million since 2010, and 12.6 million since 2000. As a share of the U.S. population, immigrants (legal and illegal) comprised 13.5 percent, or one out of eight U.S. residents in 2016, the highest percentage in 106 years. As recently as 1980, just one out of 16 residents was foreign-born.

TradingPlaces 4y ago

In March, there were 1.9 job openings for every job seeker. This is the tightest labor market in history. April data this week (I expect it to be down a little) https://fred.stlouisfed.org/graph/?g=Q1Po https://fred.stlouisfed.org/graph/?g=Q1Po The reasons are workers who left the workforce in the pandemic (many older or women with children), and the lack of immigration.

ldiracdelta 4y ago
Sounds like an advantageous negotiating position for those supplying the labor.
- TradingPlaces 4y ago
  Yes. Labor demand is softening a bit, but actually kind of welcome because it is an inflation driver. April data just out. March revised up, so it was actually 2.0 openings per job seeker, April ticked down to 1.9 https://fred.stlouisfed.org/graph/fredgraph.png?g=Q27U https://fred.stlouisfed.org/graph/fredgraph.png?g=Q27U
s1artibartfast 4y ago
>This is the tightest labor market in history. This data only goes back to 2000. Do you have more data to support this claim? Not to discredit your point, I really appreciate someone bringing actual numbers to this discussion. It is noteworthy how high it is.
- TradingPlaces 4y ago
  JOLTS started then, and “job openings” is the JO in JOLTS. So no, but there are many other indicators as well, beginning with an unemployment rate near all time lows, and wages going up rapidly. FWIW, the second tightest was February 2020

whiddershins 4y ago

Everything is an energy shortage in the end.

honkler 4y ago
found a fellow JMG fan.
- whatisjmg 4y ago
  who is jmg?
  - honkler 4y ago
    john michael greer

PaulKeeble 4y ago

I think it might also be a disability issue. Long covid is no joke and the ONS today announced the UK has 2 million sufferers. Some 1.4 million of those are heavily affected by the condition and many wont be able to work. These people are mostly of working age, that is a very large amount of people to loose in a country with 39 million working age people.

lallysingh 4y ago

Don't we usually give the low-pay, undesirable jobs to immigrants? Where are they?

benstrumental 4y ago
Strict immigration policies during the previous presidency combined with the pandemic have led to record low immigration. Census projections generally expected immigration levels to remain constant. However, immigration plummeted from a net gain of ~1000k/year in 2016 to ~250k/year in 2020[1]. [1] https://www.brookings.edu/research/u-s-population-growth-has-nearly-flatlined-new-census-data-shows/ https://www.brookings.edu/research/u-s-population-growth-has...

dools 4y ago

Can confirm that every time I have wanted to hire someone and didn’t get the right applicants, I offered more money and did get the right applicants

TuringNYC 4y ago
I love this comment! You made my day.
Cd00d 4y ago
That's interesting, but how does it work? Of the jobs I've applied to it's been exceedingly rare that I knew the pay at the time of the application.

acalzycalzy 4y ago

Not true at all. A lot of people simply do not want to work. I know the manager of a Costco, and people come to work on their first day and then leave during their lunch break never to return. Costco offers great pay and benefits. The biggest thing people don’t talk about is a lot of workers got paid to stay home during Covid. In essence, they were living like the 1% and got used to it. Now they don’t want to go back to living their pre-covid life but guess what? Everyone can’t be part of the 1%.

honkler 4y ago
>Everyone can’t be part of the 1% So no one should be a part of it. I mean, no one should be let to sit on their ass and get rent. That's a good deal.
- acalzycalzy 4y ago
  Why shouldn’t anyone? If i bust my ass and start a business and employ 100 people and make enough to buy 3 ferraris - is that a problem?
  - honkler 4y ago
    as long as you work, you get money. You won't be allowed to "let your money work for you".
chrsw 4y ago
You think getting an unemployment check is "living like the 1%"?
- acalzycalzy 4y ago
  People who are used to making betweeen minimum wage and say $20/hr - getting their standard unemployment check PLUS $600 a week? - ya to them that was living like the 1%: staying home and making more than they were making before and doing what they want.

cmrdporcupine 4y ago

Lots of money to shareholders or decent money to employees. Pick one. But I think there's a bias in our economic model towards the former. (Most companies are not Google. They don't have such an insane firefose of revenue coming in that they can dump giant compensation packages on people and give them free food and discounted massages and also at the same time get year-over-year 20% revenue growth every quarter) I also think small businesses are genuinely squeezed and it's tough for them to pay a competitive wage and also keep the business afloat.... but honestly, employees don't owe them anything. If the business can't make it, it can't make it.

Aerroon 4y ago
>If the business can't make it, it can't make it. I think this is how it should be, but we have a tendency to cry foul. If enough of these businesses go under and unemployment soars, then we have a tendency to turn to government/politics and demand that they change the economy by decree.
- engineer_22 4y ago
  Except for PPP, is there a time that small business was given big handouts from the Federal Govt?
  - Aerroon 4y ago
    I do not know the answer to this. I was thinking in broader terms about political instability that can come from a surge in large enough scale employment disruption.
engineer_22 4y ago
This comment reminds me of a concept I've just heard of: financialization. When assets in the real economy are owned by securities markets and directed by professional managers. https://equitablegrowth.org/the-rising-financialization-of-the-u-s-economy-harms-workers-and-their-families-threatening-a-strong-recovery/ https://equitablegrowth.org/the-rising-financialization-of-t...

trelane 4y ago

An interesting bit of info was pointed out to me by an acquaintance in the restaurant industry. Small mom and pop places are losing staff because the big chains can afford to pay their workers more, since they can better afford the losses (smaller profit per site but more sites.) I'm a huge fan of increasing wages, but I also don't want even more soulless mega chains.

urthor 4y ago
That's competition. Little stores have to sell better shit than big stores to be worth the money. I see plenty of little stores that work where I live. They have to be upmarket, but they work.
the_only_law 4y ago
when I visited in my family in Kentucky, the local McDonald’s was paying as much as the Plumbing company and much more than the local manufacturing plant.
nradov 4y ago
Big chains can't "afford" losses. If a store is losing money then they'll bring in an experienced manager to turn it around, and if that doesn't work then they'll shut it down.
- trelane 4y ago
  "loss" was inelegant wording. I meant "less profit." Note the text in parens.
pessimizer 4y ago
I like little stores over chains, too, but the lion's share of little stores are run by small business tyrants with the ultimate goal of turning them into passive income. Your salary is their obstacle.

adam_arthur 4y ago

If you have 100 prospective employees and 200 jobs, there's a labor shortage by definition. This setup leads to a wage price spiral, as competitors continue to raise wages to poach employees, and people ping pong between jobs frequently for pay raises. There is an aspect of LFP where higher wages may draw in new employees, but there's not a huge well to tap there. Labor market is hotter than ever before, while LFP is declining. Pretty fair to call it a labor shortage. Though more accurately I'd call it an overheated economy. Typically the Fed triggers a recession under these circumstances. Also keep in mind rising nominal wages above productivity gains does not benefit workers at all. It has to be real wage gains. Real wages have been declining at a record pace

michael1999 4y ago
Both labour supply and demand have normal curves. Low-value employers will be priced out until there are 110 openings, and 10 people come out of retirement.
- adam_arthur 4y ago
  Yes either openings decline or labor supply increases. Demographic trend is toward lower labor supply though, so most likely outcome is number of job openings needs to be decreased to solve inflation. Again, real wages have been declining so people are getting poorer despite increasing nominal wages. It kind of boggles the mind seeing people talk about wages in nominal terms like it means anything. The poor and downtrodden will suffer most in the end as a result of the steps necessary to control inflation.

burlesona 4y ago

This article is a year old, needs (2021) in the title.

kube-system 4y ago

Just because a business can raise wages and attract employees doesn’t mean there’s not a labor shortage. Many people who take a newly higher-paying job leave another job. If both jobs raised their wages, that person will still just choose the better paying one. A lot of why this is happening to service industry employees is because they were forced to look for new jobs when laid off, and found that other industries already offered a way better overall experience.

tootie 4y ago

This year-old article is definitely wrong and we definitely have a labor shortage. https://fred.stlouisfed.org/graph/?g=P0D0 https://fred.stlouisfed.org/graph/?g=P0D0 Prime-age employment-population ratio is exactly where it was pre-pandemic and UNRATE is near all-time lows. Population growth is slowing and retirements rose substantially. Everyone keeps looking for these cultural shifts or policy failures, but all our economic troubles (labor, housing, inflation) are still easily explainable by simple supply and demand.

carapace 4y ago
This reminds me of the fellow who looked at historical data on rents in San Francisco going back to 1948 and found that "Today's outrageous prices are exactly in line with the 6.6% trend that began 60 years ago." ~ "Employment, construction, and the cost of San Francisco apartments" https://experimental-geography.blogspot.com/2016/05/employment-construction-and-cost-of-san.html https://experimental-geography.blogspot.com/2016/05/employme... It's a fascinating article, well worth the read.
s1artibartfast 4y ago
Interestingly, the numbers for men tell a different story, with all time low male employment. It stands to reason that some male dominated industries may be seeing a different phenomenon. https://fred.stlouisfed.org/series/LNS12300001 https://fred.stlouisfed.org/series/LNS12300001

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settrans 4y ago

Perhaps if we weren't subjecting the tens of millions of Americans in the $15,000 - $40,000 income range to effective marginal tax rates of up to 103% [0], we would see more labor force participation. Between income tax and benefit phaseout, it can literally cost money to get a raise in our system today [1]. [0] https://fullstackeconomics.com/103-percent-the-hidden-tax-rates-of-means-testing/ https://fullstackeconomics.com/103-percent-the-hidden-tax-ra... [1] https://www.heritage.org/taxes/report/effective-marginal-tax-rates-low-income-workers-are-high https://www.heritage.org/taxes/report/effective-marginal-tax... P.S. if you account for need-based financial aid scholarships for college, the situation is even more dire.

maerF0x0 4y ago
IMO this is one of the arguments for dismantling the social bureaucracy and implementing a Friedman like UBI . I highly recommend watching the whole series, but here's a direct clip to the idea ("negative income tax") https://youtu.be/ysf-5MdWDt0?t=1519 https://youtu.be/ysf-5MdWDt0?t=1519
- settrans 4y ago
  I'm familiar with the idea - but the biggest challenge with UBI is not that it's inherently a bad idea (as you note, it effectively adds a negative intercept to the marginal system), rather that it is unlikely to replace welfare systems in a lasting fashion. There are two problems: 1. UBI would be too expensive if it were to replace welfare. You can't just keep the total welfare spending of $1.16T [0] and smear it across the whole population, since that would significantly reduce the support of families receiving welfare today (since you'd be distributing the benefit _universally_). If you wanted to keep the average payout to welfare recipients the same, you would need to dole out $65,200 (the average welfare benefit) to each of the 122 million households in America, balooning UBI spending to nearly $8T, over 1/3 of US GDP. But even that wouldn't be enough, since many families depend on even more welfare benefits, since all we did was pay out the average. Suppose you paid out the 80th percentile instead (for sake of argument, assume that's $90,000), now your welfare bill is $11T, or half of GDP. Needless to say, you'd need a lot of taxes to pay for this, and the US would shoot up to the highest-taxed nation on earth. 2. Even this wouldn't be enough: the same social forces that push to expand and grow the welfare bureaucracy today would continue to exist, and I would expect them to cause the reintroduction of welfare even if abolished under the introduction of UBI. Families receiving direct financial support under UBI could (and would) starve, suffer costly medical expenses, and otherwise need additional support, and thus create demand for welfare afresh. [0] https://www.heritage.org/welfare/report/largest-welfare-increase-us-history-will-boost-government-support-76400-poor-family https://www.heritage.org/welfare/report/largest-welfare-incr...

mihaic 4y ago

While I feel like the direct cause of the current situation really is a wage shortage, I'm thinking more that the root cause of the situation is how much harder it is to build any value adding business. The economy is becoming hyper-abstracted, and if you're not a company that can scale on a simple niche, you're pretty much screwed. Regardless, right now it seem like the symptoms need treatment first, and the only real solution is redistributing money from those earning money from capital-gains and rent-seeking. The US seem to be designed to never do this, so we might actually need a social collapse for something to change.

jmoak3 4y ago

I recommend everyone who reads this comment to pick up a copy of The Great Demographic Reversal by Charles Goodhart & Manoj Pradhan, a book on the cost-rising effects of aging populations among advanced economies.

smaryjerry 4y ago

A wage shortage does not matter if people have enough money already. This is why we have inflation and low unemployment rates. People don’t need to work because overall they have had more money than they needed. This means we run out of things- everything- because everyone has enough money and the prices of everything needs to increase before people stop buying up the supply of everything. This is a side effect of influx of money put into the system by the fed and by the government. If people have enough money, they don’t need to work and stop working. Prices go up from inflation causing them to start to need money again and start working. So the labor shortage is not due to a wage shortage except in specific industries.

lkxijlewlf 4y ago

The Fed (specifically Powell), thinks wages are too high and need to be brought down.

Blackstrat 4y ago

I live in a large city with a very low cost of living, median per capita income about $30K. Fast food restaurants are offering starting wages of $15-18/hr (median to above), healthcare, tuition assistance, etc. and can't find people to work. The combination of inflated expectations of their value, government handouts, and being "too good" to work some jobs is the problem. It's not worker exploitation. That's pure Marxist BS. I came from a struggling blue collar household in the Midwest and worked from the time I was 15. Some of the jobs were terrible, long hours, dirty work, etc. But eventually I got to where I wanted to be and subsequently retired comfortably. The bottom line is people need to quit making excuses and whining about their exploitation and apply themselves. Work hard, finish school, learn something useful - gender studies et al aren't, and build a life. You are responsible for your own fate - not anyone else and not the government.