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posted by martyb on Saturday July 15 2017, @03:29PM   Printer-friendly
from the Stockholm-Syndrome dept.

I saw an story in Slate about stagnant wages in an economy that is growing otherwise:

There's a disturbance in the force of the U.S. economy. An airline canceled flights because it couldn't find enough pilots to steer them. Despite high demand, homebuilders in Colorado are throttling back activity because they can't find the workers to erect frames. Farmers in Alabama are fretting that crops may rot in the ground for a lack of workers to bring in the harvest.

[...] There are a whopping 5.7 million job openings (well over twice the level of eight years ago). Meanwhile, baby boomers are aging out of the workforce at a rapid clip and Mexicans, many of whom crossed the border to work, have been leaving the U.S. for years. The demand for workers is high.

Given these conditions, wages should be rising sharply. But look at this chart from the Atlanta Federal Reserve: They haven't been, and they're not. … Last week, the New York Times featured a Columbus, Ohio, cleaning company owner mystified that he couldn't find applicants for his $9.25-per-hour jobs ("I sometimes wish there was actually a higher unemployment rate," he actually said) and a Nebraska roofer who couldn't figure out why nobody applied for the $17-an-hour jobs she was offering. "The pay is fair," she said.

Actually, if not a single person applies for your job, the pay probably isn't fair. But that's where America remains stubbornly stuck: Employers won't pay enough, and workers either won't or can't demand more. There are likely a lot of reasons, but the biggest, or least most fixable, may be psychological: From an economic perspective, both sides of the hiring market should have the power to increase overall wages in the current climate—but they aren't.

[...] There could be a skills gap in which the workers out there simply don't have the training necessary to fill the open jobs. Or it could be that, as Binyamin Appelbaum of the New York Times ventured on Twitter, that "a lot of American businesses have lost the muscle memory of how to compete for workers." That is to say, they have literally forgotten the words to use, and the tools to deploy, when workers aren't lining up in droves to fill their positions.

I also found this in the Daily Caller. It discusses the shortage of H2B workers this year. Most folks here know about H1B workers... H2B is program for low skill seasonal workers which has seen rule changes and cuts this year.

Businesses in Bar Harbor, Maine are turning to locals to make up for a shortage of foreign guest workers that normally fill summer jobs in the bustling seaside resort town.
Because the H-2B visa program has already reached its annual quota, Bar Harbor's hotels, restaurants and shops can't bring in any more foreign workers for the rest of the busy summer tourist season.

[...] The shortage is so acute that companies are sweetening incentives for local workers. Searchfield says some businesses are offering flexible schedules that might appeal to older workers who might be interested in working only a day or two each week. And other companies have gone so far as to offer higher wages to entice locals.

Imagine that.


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  • (Score: 2) by kaszz on Sunday July 16 2017, @12:18AM (1 child)

    by kaszz (4211) on Sunday July 16 2017, @12:18AM (#539705) Journal

    So when you notice that salaries has not moved upwards then you know that the employer whining is false in regards to supply. Unless the job market is exempt from the demand-vs-supply mechanics?

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  • (Score: 0) by Anonymous Coward on Sunday July 16 2017, @01:07AM

    by Anonymous Coward on Sunday July 16 2017, @01:07AM (#539724)

    It's more complex than that.

    Part of this comes down to behavioural economics, in addition to straightforward beancounting.

    Hiring doesn't occur in a vacuum. I could probably fill a construction firm's ranks easily, if I offered $250K/year plus a $50K signing bonus. The problem is that the odds of my then showing a profit are essentially nil. Simply declaring, for example (not a random example, I actually heard this proposed) that all farm workers everywhere should get a base pay rate of $60K/year, doesn't mean that jobs will suddenly materialise at those prices.

    This is what you might call the price elasticity of labour supply and demand. Janitorial contracts are extremely competitive (leaving aside the mob corruption in the field) so simply declaring that janitors should be paid, oh, let's say $20/hour at a minimum, with some minimum hour count and so on and so forth, means that the compliant services will fold - or if they all comply, employers will find ways to ditch them, such as telling employees to empty their own damn trash - thus reducing overall job count anyway.

    On the other hand, downward pressure on wages is very difficult to translate into actual wage cuts, as opposed to extended unemployment, or reduced job mobility, because of psychological factors.

    This is a brief overview of why you can have unemployed people refusing to take jobs at the offered wages, while prospective employers refuse to raise wages. Where the government does get involved, such as the recent brouhaha about Seattle's wage rises, you'll find (more or less what the infamous totally-not-peer-reviewed-but-still-apparently-correct study found) that small employers without a buffer hired fewer people or left the area, on average, while employers with a sufficient external buffer essentially subsidised their burdened branches with the profits of elsewhere. Surprise, surprise.

    The real lesson is what Margeret Thatcher said, lo these many years ago: "If you try to buck the market, the market will buck you." She was right then, she's right now, and all the people who sniffle and say: "But THIS time we can buck the market!" are just making examples of themselves for the rest of the world.