The Grand Illusion
The so-called labor shortages facing the U.S. today are the result of a number of underlying factors, some of which have been ignored or dismissed.
A study from the Federal Reserve Bank of Saint Louis reveals that more than three million baby-boomers retired early. While the study doesn’t and likely can’t quantify the reasons, the most probable reasons are attractive incentives to retire early, discomfort with COVID in the workplace, and layoffs or forced retirements of older workers.
In addition, I know, if anecdotally, of hundreds of senior white collar job layoffs across a range of institutions and professions, and most of those individuals are going to find it difficult, if not impossible to find similar or equivalent positions, which will mean that many are unlikely to return to the workforce unless absolutely necessary. Law firms also aren’t hiring as many law school graduates as in previous years. As a result, those remaining in many organizations are being pressured to produce more, and those workplaces are becoming more stressful, which is leading to more departures and retirements. And paradoxically, the result is a slowly growing shortage of people with the same skills as those who were forced out, but those who were forced out appear reluctant to re-enter the workforce under current conditions.
I also know a number of small-business people who have been looking for workers, sometimes for well over a year, but can’t find people who even want to interview. I see signs everywhere saying, “Now Hiring,” or the equivalent. So there’s clearly an imbalance between the jobs that are open and what they pay and/or require in terms of working conditions and those who are unemployed or seeking jobs.
In certain fields, those imbalances have existed for years. There are far more trained singers, either classical or in any other musical genre, than there are available jobs. The same is true of theatre arts graduates. Creative MFA programs turn out far more would-be authors than can be published.
Yet there are shortages of workers in skilled trades.
The other day, I spent some time at a highly regarded and accredited post-high-school technical training school. While the institution’s graduates are in demand, those available jobs are located in other towns and cities. For example, there are jobs available for every automotive technician being graduated – if they’re willing to leave Cedar City. At around 50,000 people, Cedar City just isn’t big enough to provide jobs for all of them. So while their skills are needed elsewhere, the “entry costs” [i.e., housing, transportation, moving expenses] to relocate to those communities are often almost prohibitive. And if a family has two parents working, which has become more and more economically necessary, relocation may cost the other parent a job.
This doesn’t occur just here, either. In many east coast areas, people are commuting hours each way because they can’t afford decent housing and schools for their children closer to their jobs. Women often can’t work because they can’t find reliable, affordable, and decent childcare.
But, so far, I don’t see politicians and businesses addressing these and other structural imbalances… and with the comparatively smaller numbers of workers in generations younger than the baby-boomers, these worker shortages/imbalances aren’t going away any time soon.
To talk about just one of the underlying causes, the gap between minimum wage and a living wage is significant. A job that won’t pay your bills is a job that will go unfilled.
MIT has a “Living Wage Calculator”, here: https://livingwage.mit.edu
In Iron County, where Cedar City is, it says that a living wage for an adult with zero, one, and two kids is $12.80, $27.22, $34.18, respectively. Minimum wage is $7.25, so if you have a family, everyone has to work multiple jobs. This can be impossible because of balancing child care with the schedules demanded by employers.
Just testing my understanding.
Are you suggesting that if a job doesn’t pay a living wage (which varies by circumstance) folks will choose not to work, folks will find other work at a higher wage, or will do something else?
What I’m saying is that if an employer isn’t paying a living wage, they will find it difficult to hire people. And it appears to be getting more difficult lately.
As far as what people are doing instead, I don’t know.
Got it – Thank you. That makes sense and is supported by economic Supply and Demand theory at any price level.
Your observation that when the minimum wage is below the living wage it creates more demand for jobs per capita is interesting (created when people need more than one job to survive vs. just one if the minimum wage is above living wage). That would seem to create more demand for jobs, pushing uncontrolled wages down still more – a vicious cycle.
People are not meant to have a family at minimum wage, they’re expected to wait until they’ve climbed the ladder far enough to afford one.
Even a teenager flipping burgers gets a (small) raise after a year or so if they’ve been competent and shown up reliably; and during that time, they should have been learning other skills offering further future advancement. There’s really no choice, because raising the wages of the bottom rung will just get them automated out of a job that much sooner.
As I pointed out above, the minimum wage is less than the living wage, even for a single person with no kids.
You’re a knowledgeable person. Let’s say that consigning unskilled folks to childless lives of desperation while they learn new skills when working two jobs is repugnant. Let’s say that eliminating those unskilled “starter” jobs by automation, leaving people with no prospects, is repugnant.
Instead of simply throwing people away, what do you think can be done to change the dynamic? Something that can be done on Earth, not on a planet where everyone is completely logical.
I don’t think it’s repugnant to expect people to do what only people can do, and not remain unskilled for a lifetime. Most could do that, if they make the effort – at least to the point of going beyond an entry-level position. I’ve seen people that were determined but of clearly challenged faculties that got at least a step or two beyond entry-level. And there have been people with _physical_ challenges that got far beyond most of us in their mental capabilities. So I’m not arguing that everyone that isn’t at least my mental and physical equal is disposable, not by any means. I am however arguing that more and more jobs will be obsolete starting at the low end, and that therefore the population SHOULD probably reduce (by decreased reproduction), in such a way as to favor those whose skills still remain useful. How to do that without sterilizing people based on IQ or the like (which may be repugnant), I have no idea, and don’t actually care as long as it’s not collectivist or compulsory (be it compulsory redistribution or compulsory sterilization), because I won’t see the outcome in another century or so.
Remaining childless until age 23 or so is hardly burdensome, it’s RESPONSIBLE. Most people aren’t mature enough to be decent parents before then, regardless of income. Entertainers may not be typical, but quite a few that got wealthy young and got married young got divorced not much later, even if they had a child. Hardly an ideal outcome; if they’d waited, they’d at least have had time to realize that neither themselves nor most potential partners were as ideal as they imagined…and prepare themselves and use better judgement in partner selection before procreating. So waiting isn’t just about income by any means.
Moreover, I think that all the jobs that can be automated, should be automated. There will still be plenty of jobs creating and maintaining the automation. Not as many, but they’ll be jobs only humans can do. Humans that can’t do what only humans can do will NEVER be more than second class, they wouldn’t be no matter how much cash was thrown at them. They’ll be existing rather than functioning, and they’ll know to their dying day that they’re dead weight.
Regardless of social policies (IMO an oxymoron), it’s likely that technology will reduce the number of humans needed just as it contributed to increasing the number possible. Why is that wrong?
Public burdens (unless disabled in the line of duty in public service – those we owe) should be either voluntarily sponsored or left to their fate.
If you want some grand compulsory collectivism to ensure that everyone’s basic needs are met, no, I will NEVER sign up to that. There are the occasionally needy that I know personally, them I’ll aid as I can (although not to the point of harming myself beyond forgoing a few weeks mad money now and again). And it’s NOT about $$, I’ve given some years more than I pay in taxes (without creative deductions, and without deducting those gifts which were not to registered nonprofits mostly – yeah I’ll chip in for a hurricane, although not twice for a city built below sea level; stupid is as stupid does); it’s about the liberty to CHOOSE one’s obligations and how to best meet them.
Most people are known by someone, but that’s someone else’s problem, their bell DOES NOT TOLL FOR ME. I DO NOT pretend that strangers matter, at least not until they’re no longer strangers, and I have neither the time nor interest to personally interact with a city or a nation or a planet full of people, nor the tolerance for the tyranny needed to create a system that ensures outcomes for all.
Last but not least, an increased minimum wage does not make sense. It’s just another form of redistribution, and will increase the cost of ALL goods to the point that even more people will be without a “living wage”. Training increases productivity – at least if it’s about practical skills and not about social propaganda or seldom-marketable skills beyond what the market can actually absorb of those. But redistribution DOES NOT MAKE MORE PIE, it just slices it differently and wastes a fair bit in the process, while undermining incentives for people to actually make more pie. A higher minimum wage also tends to reduce the increase at the first few steps above it in the ladder, undermining early encounters with incentives to be fully human and adapt, learn, grow.
If you actually care about persons rather than statistics, socialism is a crime against humanity.
Actually, the math never pans out that “Increasing living wage will make everything too expensive.”
Fun fact. This same argument was used when the ACA first rolled out and said “You will provide health benefits for your employees.”
A major restaurant chain, Papa Johns, went on to mass fire their full time employees, spouting the same line that it wasn’t their fault, it was the evil government forcing them to make that choice because otherwise their product would become too expensive.
The math was done. The Cost of giving everyone at that company full benefits came down to something like $0.13 a pizza.
Now a smart person who wasn’t out to screw the little guy would probably raise prices by $0.25 or so, still blame the government, but also paint themselves as caring employers making sure their employees are taken care of.
The fact that he instead stabbed his people in the back shows exactly where his priorities lie. The math shows that the line you’re spouting is false.
I’d love to believe that my success is totally due to my intrinsic worthiness. But the meritocracy is too convenient a way for lucky successful folks to congratulate themselves.
So I recognize that my success is due partly to hard work, partly to luck, and partly due to the deck being stacked in my favor.
Hard work and striving without luck and having the deck stacked against you will only get you so far.
So that’s why I don’t agree with your ruthless calls for population reduction.
That’s why I do believe in social policy. Because it’s a de facto social policy that stacked the deck in my favor at birth. So I accept the need for policies that help others. Policies that give them an opportunity to succeed, an opportunity to escape the vicious cycles of poverty.
The cost of living has far outstripped the wages and there isn’t an easy fix, we’re living in a distracted world that needs to focus again. But that’s not why I’m here today, I was about to drop a review on The Timegod and realized that the blurb they have on Audible is for an entirely different book and it’s been that way since August! I see idea that we’re born in that book all across the SciFi landscape and it hurts that little teenager who escaped into that world.
I’ve tried for months to get Audible to give the correct review. I’ve even sent them a correct one.
I’ve tweeted about it and put in trouble tickets but alas, no idea why they haven’t changed it yet.
The only thing I”ll add to what you wrote, sir. Is that those help wanted signs have been shown to be deceptive in many cases.
The reality is, a company can make more on a skeleton crew, because they pay less in wages and benefits. But it makes service suffer. When service suffers Public Opinion drops and the company loses.
But what we have here is a lovely case where they can have service suffer, then insist “We’re trying to find people, but no one wants to work, it’s all the lazy worker’s fault, not ours.”
Aside from the simpler reality that offering minimum wage when you need a lot more to survive means people won’t want to work for you, there’s also been multiple reports of people trying to apply at multiple places only to never hear a word back despite them saying they were desperate for employees.
As a very soft aside. To those saying companies can’t offer more, or it’s damaging to offer more. I know for a fact that the third largest Credit card in the world starts at $15 an hour, is almost always hiring, and doesn’t expect heavy training before you start. I know that one of the most reputable insurance companies in the US just raised their Starting wage to over $20 an hour.
It is fully possible to pay a living wage or higher and be successful. But it requires accepting that running this business will only make you very rich instead of obscenely wealthy.