Question

labor shortageI bookmarked an article you wrote a few years ago: B.S. on the jobs numbers euphoria. Jobs numbers are the #1 story again: 260,000 jobs added versus over a million the economists predicted would be a slam-dunk! Is that a labor shortage or job shortage? Maybe a pay shortage? Once again they’re blaming us, people looking for jobs! We’re not educated enough or skilled enough or willing to go on goose-chase interviews recruiters e-mail us about. Now we’re deadbeats living on rich unemployment supplements. Who needs to work, right? I DO!

Nick’s Reply

The burning question in the news today is, why are so many employers unable to fill jobs? Is it because, as some claim, recipients of pandemic relief benefits would rather “collect” than work? Is it because people who want to work are afraid to, because the virus is still a risk? Or, as others say, are working women staying home because someone has to watch the kids while schools are closed?

Labor shortage or shortage of pay?

I’m no economist — hell, they just got the “jobs added” numbers wrong by about a factor of 4! — but based on what my readers tell me and on what I see, the answer is simple. Employers don’t want to pay market wages and salaries to attract workers for jobs they say are so important to fill.

I believe low pay most readily explains much of the inability to hire. There’s no labor shortage. It’s a supply and demand problem. And many employers are running scared because they don’t know what they’re doing. (A more cynical view is that they’re just greedy.)

Let’s look at the contradictions.

Business to labor: You’re deadbeats

On one hand, unemployment has remained at around 6.1% — still very high. According to Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, between 8 and 10 million people who want to work can’t find jobs. He also suggests it’s unreasonable to expect the effects of the pandemic are over. He says things are getting better, but it’s going to be months before we see substantial improvements. Judging from the numbers, we don’t need an economist to tell us the problem is a shortage of jobs — jobs that pay enough to attract workers.

The U.S. Chamber of Commerce, on another hand, suggests those 8 to 10 million are deadbeats living large on pandemic relief benefits. In fact, the Chamber is so sure it can find jobs for all those people that it has demanded the extra $300 per week unemployment benefits be cut immediately. Says the Chamber: “It’s giving some recipients less incentive to look for work.”

Labor to economists: You’re stupid

Now we need a third hand to juggle the facts. On May 6 Barrons proclaimed, Get Ready for a Blockbuster Jobs Report of 1 Million or More. Oops! The next day, the Bureau of Labor Statistics revealed that business added just 266,000 jobs last month — not over a million like economists confidently predicted. So, where are “all those jobs” employers can’t fill and that you should be applying for?

Who’s stupid about jobs?

It seems pretty simple: The real disincentive to look for work is that there aren’t enough jobs since the pandemic started! Employers who are trying to get back up and running think they can keep pay low because millions are “looking” — but job seekers aren’t buying low wages. They’re not stupid.

I’m sure some jobs are going begging, but lots of unemployed workers are refusing to beg. Let’s look at some examples.

Who’s competitive?

New Jersey’s Star-Ledger reports:

“Mike Jurusz is worried about the summer. As owner and executive chef at Chef Mike’s Atlantic Bar & Grill in South Seaside Park, [a New Jersey beach town] he said he can’t find anyone to hire. He blames his staffing troubles on expanded unemployment benefits and stimulus payments. ‘It’s impossible to get help right now,’ he says.”

Here’s where facts run into overwrought explanations — and perhaps into poor business decisions. (By the way, I don’t pick on Jurusz or anyone else except that they’re a handy examples provided by the press. I don’t know him or his business other than what I’ve read.)

Jurusz doesn’t reveal what he’s paying to fill those jobs. Yet he complains that “businesses that raise their hourly wage to entice workers make it harder for others to compete.”

Now get this.

“‘We are going to have to be forced to pay people who are not worth what they should be getting,’ Jurusz said. ‘That will increase my labor costs, then we have to increase the pricing because we have to stay in business. You’re going to see $30 plain pizzas and $35 subs.”

What I hear is a small businessman running scared. I feel for anyone facing business challenges, but having to make payroll is going to put some businesses out of business. Welcome to the new economy.

Do employers really need to pay more?

They do if you listen to retailers, who say that to compete with Amazon, which pays more than $15 an hour to snatch up available labor, they, too, have to raise wages. While some restaurateurs can’t beat that kind of job offer, Amit Patel, a snack-food manufacturer, also in New Jersey, said to the Star-Ledger:

“Do you think an employee would want to work at $10 or $11 an hour in a COVID environment when they have no job security, no benefits? People are realizing their worth is a lot more.”

Patel has raised the wages his company pays by 30% since the start of the pandemic.

Smart employers are busy hiring

Another New Jersey restaurant owner in the same Star-Ledger article, Tim McLoone, said he doesn’t blame the hiring challenges on people who don’t want to work.

“It’s offensive to demonize one group of people,” he said. “There’s no question that unemployment has contributed to the diminishment of the labor market, but it’s not like they’re staying home to watch The Price Is Right and they don’t want to work.”

McLoone recently increased hourly wages to $15 for employees who don’t receive tips. Got a labor shortage? Grow up and pay what you have to. It’s called a market.

The economists who got it wrong are trying to scapegoat working stiffs who know from experience that employers aren’t adding jobs at the rates economists claim. All those job postings on Indeed and LinkedIn include a lot of dupes and garbage. They know many employers aren’t offering wages worth working for — just ask them what the recruiters are pitching. Anyone that planned on over a million new jobs got suckered by wishful economic predictions.

It’s a new labor market

Blaming the pandemic relief program is a cheap shot designed to deflect responsibility from employers large and small that have been profiting enormously for a decade without sharing with their employees. You can look up the average disparities between executive pay and employees somewhere else. I’m frankly sick of looking at the numbers. If anything, the relief benefits are balancing the scales a bit.

But there’s another part to this. Some of those unemployed workers have wised up to the game. They’ve gotten smarter than employers and economists. They know they’re worth more and won’t work for less.

In other words, it seems employers that respect the law of supply and demand offer higher wages — and they can afford to. Just look at Amazon. If your business model doesn’t permit you to pay enough to attract good workers in a highly competitive market, maybe that says you can’t compete. Maybe you shouldn’t be in business. It’s a new labor market.

The “jobs numbers” suggest that many of the millions of unemployed who want to work are wise to wait until healthy businesses offer them higher pay. The pandemic benefits make it a bit easier to hold out, but it’s the choice I’d make even without the benefits.

The noise continues

I’m not an economist or a labor market expert. But it’s not hard to see what’s going on. I can interpret what I see pretty easily by looking where the big money is telling me not to look — past the noise.

For example, the U.S. Chamber of Commerce says:

“Based on the Chamber’s analysis, the $300 benefit results in approximately one in four recipients taking home more in unemployment than they earned working.”

The Chamber is bragging that its members pay less than unemployment does? If employers really believe Uncle Sam is out-bidding them and keeping labor on the sidelines, those employers are simply uncompetitive.

The Washington Post reports that:

“Some businesses have been complaining to the White House and lawmakers that they are having a hard time recruiting workers, particularly for low-wage, hourly jobs.”

But are these businesses offering more competitive wages?

“Average hourly wages rose about 21 cents across the country, data that the BLS suggested reflected increasing demand for labor.”

21 cents? Not only are these clowns not competing with Amazon and Tim McLoone, they aren’t even anteing up to stay in the game. The Star-Ledger reports that Morey’s Piers, operator of amusement parks in New Jersey, has boosted pay 25% to $15 an hour to fill 1,500 seasonal jobs this summer. There are those that get it and those that don’t.

Labor shortage: Last thing employers want to do is raise wages

This isn’t complicated, unless you listen to economists and greedy employers. Yes, greedy employers. I’m not even going to offer you links to articles about massive profits, stock prices and executive pay that has dwarfed employee pay in the past several years. I’ll just point out that the business world’s alpha dog, Jeff Bezos, has allowed that he understands and supports tax hikes on corporations and the very wealthy — and Amazon has boosted employee pay. The jig is up. It’s time for business to pay up.

I’ll leave you with two brief audio segments from a Bloomberg Radio interview with Fed President Neel Kashkari. (I’ve added emphasis.) This guy gets it and he’s not afraid to say it.

 

      Neel Kashkari-1

Highlight:

“I hope we see employers step up. That was one of the things that was extraordinary about the last recovery. It took 10 years to return to something like maximum employment, and I’m not even sure that we quite got there before the pandemic hit. And it was only in the last few years of the recovery, after many years of businesses complaining that they couldn’t find workers, only in the last couple of years that we finally saw wages start to pick up, especially for those lowest income workers. Businesses will do anything they can do to try to meet their labor needs — and the last thing they want to do is raise wages.”

 

 

      Neel Kashkari-2

Highlight:

“We have the tools to tighten monetary policy to keep inflation in check. I’m not worried about that. What I am worried about is not having another 10-year recovery for our labor market. That’s devastating to millions of Americans and we need to put them back to work much more quickly.”

 

Yah, I know it’s more complicated, but this Fed president has the candor to break it down so it’s simple. It’s time for politicians, employers and government to grow up. The sooner the economy faces it, the better. To get businesses back up and running post-COVID, companies have to pay more. Not because of COVID. Because it’s long overdue. The virus has just served to remind people that life is short — and they’re not willing to work for less.

Those employers that cry higher wages will put them out of business must realize that offering low pay will probably put them out of business.

What do you see when you step back from the “labor shortage?” What’s the fix? Have you stayed out of the job market because employers are low-balling you? Have you found competitive employers who pay well? How can an unemployed job seeker find a good-paying job today?

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92 Comments
  1. I have two anecdotes (I know I know it’s not data) that run counter to this.

    The manufacturing plant in town that always pays the best wages in town for hourly manufacturing jobs, is openly advertising on billboards with the starting salary listed (well over the “magic” $15) and they are still struggling to find people. This is a medical manufacturing plant so even pre covid they had stringent hygiene guidelines. Until now they never had to advertise, they had a pipeline of people lined up to get their jobs. Now they are flooding out ads to find people.

    Anecdote 2: My brother in law recently regaled me of the story where they offered someone a good job (again over $15) and the potential hire asked if he could start in two months since his unemployment hadn’t run out yet. The offer was immensely rescinded and they notified the job office in his town that this person was not actually actively seeking employment.

    There are lots of factors here. The reason a million jobs weren’t filled wasn’t all “because employers are bad and greedy.”

    Personally I think that in many areas cowed by teachers into continued online learning, many parents are really in a bind and that’s causing problems too. You did mention that that bit may be an issue, and I think it is.

    • Parents are, indeed, in a bind, but it’s more complicated than just some teachers forcing them.

      https://www.nytimes.com/2021/05/09/us/covid-school-reopening-virtual-learning.html?searchResultPosition=1

    • “they notified the job office in his town that this person was not actually actively seeking employment.”

      More context needed.

      In many places, you can decline work that pays substantially less that your last job(s). Or, if the employer is too far away.

      I’m not sticking up for what the candidate did, but they may have been following regulations. The point of UI is to provide a safety net so people can attempt to get comparable work.

      • I agree 100%. More context needed. As I process this, that’s low-shelf, narcing out a guy like that. Don’t they have anything better to do with their time? Granted, that was thick-headed to make a statement like what he allegedly said, but this prospective employer is being petty and vindictive.
        The question begs “how are they going to prove the guy actually made that statement”? From my personal experience with UI, it’s a “he said/he said scenario”.

        • The applicant literally rejected a job paying well over the minimum wage in my state because he wanted to stay home doing nothing til the benefits wore out. They weren’t low balling and the State Employment offices require those receiving unemployment to actually be looking for work as a condition to receiving the benefits. My brother worked at a state employment office for some time and they were required to check up on those getting benefits to tell them what jobs were available and ask if they’d followed up on jobs previously offered as opportunities to them.

          The guy in this scenario was openly honest about wanting to get fully paid for being out of work before going back to work.

          • This guy is more likely being openly ignorant than being openly honest! And again, this story may be contrived,or as David said, more context.
            I’ve dealt with UI in 4 different states over my 40+ years of working. You’re asked on your weekly claims if you refused work, or were unavailable for work. As David has pointed out, you’re not required to accept work that’s at a lower wage, is outside of your skill sets, or is an excessive distance from your residence. The exception is when you roll onto extended UI benefits. Then you have to be willing to take any job offered, and within a much wider radius of your residence. Again, enforcement is iffy.
            If you’ve ever filed with, or dealt with, workers at state UI offices, you won’t see many breaking a sweat, nor much sense of urgency. That’s an empirical fact! Unless there’s suspicion or evidence of UI fraud, you’re not going to see a whole lot of follow up from UI.

          • I’m sorry to tell you, but well over minimum wage doesn’t mean anything.

            For example, in NY:

            * For the first 10 weeks you claim UI, you are only required to accept “suitable work” that pays at least 90% of your previous pay. “Suitable work” is work that you can reasonably do through past training and experience.

            * After that, the definition of what is considered “suitable work” expands to include any work that you are capable of doing, even if you have no experience or training in that type of work. It also has to pay least 80% of your high-quarter base-period wages.

            You could offer someone “well over minimum wage” and be no where close to the 80% or 90% cut off. If that’s the case, their time may be worth putting into finding better work.

      • A few years back I had to take unemployment for once for three months and several years later for two long periods (10 months and 7 months). Because I had well paying jobs, my weekly benefit was relatively high, but it barely covered my mortgage. I was required to actively seek work and had to provide three contacts each week. The rules allowed me to look for work equivalent in pay and duties. I sometimes had to lower my pay level or apply for unsuitable positions in order to hit the three contacts requirement. I was very mindful that I could not turn down a bona fide job offer even if it paid far less than I needed, if it was work well below my skills, or if the commute would be awful. The unemployment commission was known to make random audits of employment contacts.

        During that first period (before internet job searching was well established) I interviewed as a maternity leave replacement for someone at a world famous cultural organization. The interview went well and I would have killed to work there except the maternity leave was scheduled to end just as summer vacation season would begin and very few, if any, jobs in my field would be posted until after Labor Day, effectively taking me out a a search for a permanent job for six months. I gave a plausible reason for no longer pursuing the opening and got an offer for a permanent job the next week.

        During one of the later periods, I was contacted (via Indeed or Monster by a recruiter probably located in a foreign country) about a temp-to perm position for which the job description seemed tailor made for me with pay potentially at my target at a well known organization. I got an interview and while the location seemed far, I thought I could tolerate the commute for an otherwise great job. The interview was a perfect storm of proof that the job was not for me. It was never going to be permanent, the work consisted of nothing but the most boring part of the job description, the pay was a third lower than I needed, and the commute was soul-sucking. I returned to my car and, after about ten minutes of thought, I called the recruiter and and pre-emptively told him I did not want the job. There was no way I wanted any job offer to be extended for a job that was an invitation to hell. Because the employer is very well know, the risk of a contact audit by the state seemed high and I could not jeopardize my benefits.

        The recruiter was not happy when I told him I did want the job. He called me back the next day to ask me to reconsider and, from the way he kept trying to contact me after that, I suspect that I might have been the one chosen. I eventually blocked him. After that, I no longer applied for jobs out of reasonable commuting range, at a low pay rate, or for work that would not engage me.

        • I know it’s been a week but thank you for this story, Corrine. We need more cautionary reports of employer dishonesty.

  2. If the choice is between being poor in a McJob on low pay, little benefits besides extra Covid risk and exhaustion – and being poor with lots of free time – who would be so stupid to choose the job?

    Sure, the image is not b&w, even a McJob may have some opportunities for learning and career, but by definition, not everyone can climb the corporate ladder to become manager.

  3. I’m sorry, I must have missed it… which idiot was it who expected to see a million jobs created last month?

    Look at the monthly jobs numbers for the past 3 or 4 years. Seldom did they exceed 200k growth, if ever. Why would anyone think that there would suddenly be millions created in the backwash of the covid induced business shutdowns?

    That’s just… looking for the right word, here… um… oh, yeah… STOOPID!

    Which obviously reflects well on polls, reporting institutions, and financial journalists who will readily echo any kind of crap they’re fed with little critical thought.

  4. I read an article not too long ago about local employers who were having trouble finding employees. One doubled the starting wage from minimum wage to $15/hr. A restaurant owner implemented a policy that for anyone who didn’t average out to $20/hr with tips, the company would make up the difference. A local amusement park increased wages from $9-$11/hr to $13-$15/hr.

    All of them reported getting a lot more applications/interest and being able to fill a majority of their open positions.

    Now compare that to the last 3 paragraphs of this story:

    https://www.nytimes.com/2021/05/11/business/economy/beach-jobs-rehoboth-summer-economy.html

    Yes, on the margins, expanded unemployment benefits probably do keep a few people on the sidelines. But that’s not the major cause. Companies simply don’t want to pay market rates.

    Oh, for those who claim it’s all the fault of expanded UI, if that is true, employers just have to wait until, what, September? That’s when they end. Let’s check back then. If wages suddenly drop and employers say they have to turn potential employees away, well, then they were right.

    I’m not holding my breath on that one.

    • Found the local article. Might be behind a paywall but you might get a “free” read.

      https://www.bizjournals.com/pittsburgh/news/2021/05/04/how-local-companies-are-filling-open-roles.html

    • “Yes, on the margins, expanded unemployment benefits probably do keep a few people on the sidelines. But that’s not the major cause. Companies simply don’t want to pay market rates.”

      I’d argue that this recession has been different than the others we have experienced.

      I know several places are offering “Hazard Pay” – temporary salary increases so that they can keep workers, especially at places like grocery stores that can’t shut down. Which begs the question, why would people work for the absolute minimum during a pandemic?

      I can understand during more normal times being frustrated with UI extensions. But wasn’t part of the reason in this case to actually keep people at home?

      • @David: This is why I included the Fed president’s audio clips. He points out that the last time anything like this happened, it took employers 10 years to cough up higher pay. Like he says, paying more is the LAST thing employers do historically.

        But count up the articles in the press. How many focus on problem=workers vs. problem=pay?

        I haven’t looked lately, but how the the job boards doing? Stock prices? Revenues and profits?

    • @Chris: Thanks for the link. I’m not an economist or a labor expert but I can read. It seems pretty clear that while UI benefits keep some people temporarily out of the market, and the virus has depressed some job hunting, and virtual schooling keeps parents out of the job market — no one can explain why employers are adding so few jobs and blaming the workforce for not wanting to work.

      It’s an ironclad rule of the American economy — everything has its price. Including people on UI. So where’s the money?

      I have no doubt people would pay much higher prices to eat out right now. So show us the money! Some employers are doing just that, and they’re getting the people they need. I don’t consider $15/hr a great wage for low-level work. Not in market where companies are crying they can’t hire anyone. What’s it costing them to leave work undone?

  5. “offering low pay will probably put them out of business” (standing, cheering).

    A carpenter with a toolbox, a football player in full pads, and an economist were is a room without windows or doors. They wondered how to escape. The carpenter said that he would use his tools to cut their way out. The football player said that he would run into the wall to make a hole for them to escape.

    The economist said, Assume there is a door…

    • @Jim: Heh heh.

    • What does an economist stranded on a remote island with a ton of canned food, but no tools do?

      He assumes a can opener.

  6. “Grow up and pay what you have to. It’s called a market.”

    Amen.

    • I do wonder what the small business owner, finally being allowed to re-open in some places, after emptying all their savings to keep their business even alive, feels about being made a supervillian because he can’t afford to pay higher wages because he literally doesn’t know if he’ll have enough in the early stages of restarting to do it.

      If I were that business owner I’d be really really pissed at the government that has put in motion this scenario that essentially made my business illegal to run for a year, and then turned to face a media and pundits saying “well just pay more to find people you scum”.

      Small business owners were utterly screwed by the government this past year with the lock downs and restrictions and now that things are opening up, these people driven to the brink of destruction get handed a villain hat because they’re not sure their restarted business’ will have enough cash flow to support higher wages right now.

      If I were a business owner like that I’d be really really pissed.

      • Small biz owners have always been screwed over six ways to Sunday. Between onerous regulations and tax shenanigans, the system is set up to favor Big Biz (which can afford to hire a phalanx of lawyers to manipulate the system and navigate around regulations) and squeeze out the smaller guy. It was true before the “pandemic,” but since then arbitrary closures and capricious “mandates” have really driven the point home. Why do you think Amazon and Walmart have had phenomenal earnings in 2020, while mom & pops depleted their life savings only to lose it all when they had to shutter for good? Why do you think fast-food chains are thriving while the local eatery can’t even make rent?

        The spirits of Rockefeller and JP Morgan live on.

        • On top of that, the big businesses snapped up most of the stimulus money before the little operations could even get the paperwork finished.

          (How long have you been using this screen name? Makoto Yukimura fan? OR do you take it from the original tale of the “ash lad”?)

          • I’ve been using this screen name for a while now (based on the original folk tales by Asbjørnsen & Moe). Not a huge fan of anime, but I do like Hayao Miyazaki. My cat’s name is Totoro.

            • It’s just a coincidence that I am reading “Vinland Saga” right now, and a character called “Askeladd” features in the first few volumes.

              Some folks say that the Ashen Lad is a personification of how Norway felt in relation to its stronger neighbors.

          • You meet the nicest people from the most interesting places on Ask The Headhunter. :-)

      • @J and Askeladd: I can point to many restaurants in my area that are doing fine. Not great, but fine. They are well-managed. They have very good product and service. They smile and thank every customer for their support. They have all cut back on menus, options, some niceties. Customers still flock for take-out (and leave tips) and outdoor seating.

        I’ve noticed that some in one bigger town that serve similar food seem to have a pact: one is open on Saturday, the other on Sunday. They seem to be cutting half their costs by not competing for the same size market.

        The shop that maintains my commercial lawnmower (I have a big lot) is backed up with work. Took a month to get my machine in and he’s had it over a week already.

        My car shop is scheduling work 3 weeks out. He’s booked.

        For every small business crying (and I feel for them, honestly) there are one or two in smart survival mode or doing well in spite of “the economy.”

        I’m not calling any small business a villain. I don’t disparage them. But I’m calling this what it seems to be — some are well-managed and some seem to be less so. It’s just too easy to cast small business as a victim, when the question is, what are they doing to survive? Tapping into their retirement doesn’t make them smart; it begs the question, should they be in business? We’ve just gone through a huge period of expansion and commercial growth. Does anyone really believe there’s no end to that, no shake-out?

        Being a pissed off small business doesn’t do anything for success.

    • “No one wants to work anymore.”

      So says the business person whose competitor is bringing new hires on.

      What’s the difference between them?

      • @Nick – you need to click the image and read the fine print *below* “No one wants to work anymore”.

        • @Timothy: Ouch! Got me! Now I’m laffing. Thanks for leading me to water and making me drink. :-)

        • @Timothy Byrd: The fine print below sums it up perfectly. Yeah, right, no one wants to work anymore. How about not making people jump through a million hoops, how about not refusing to talk to those who walk in and ask about the job, or who don’t want to play the keyword game? How about not ghosting those who do apply? How about training those who have potential?

    • The fine print at the bottom of the sign is great.

    • This is brilliant. Read the whole thing, folks. It’s brilliant.

  7. The problem at the low end is that the federal unemployment benefits may blanket the country with a bunch of people making $10/hour staying home. Given regional cost of living differences this could be a big issue. In high cost areas such as New Jersey, you need to pay $15/hour to get someone interested. In other parts of the country (Midwest, Southeast), $10 is a good wage. So the unemployment benefits will impact some regions more than others.

    One topic that was not addressed is frictional unemployment (yes, I have a degree in Economics). This is what happens when massive numbers of people are moving and/or looking for new jobs. Think of the hundreds of thousands of people leaving California to seek greener pastures. I receive dozens of job alerts from California companies where I might get just a dozen from the rest of the country. California companies can’t fill jobs fast enough because people are leaving in droves. Hello remote work!

    • @Steve: Jeez, an economist with a good point. :-) Please don’t be offended. People say similar things about me when they find out I’m a headhunter.

  8. For those complaining about applicants being lazy, it cuts both ways. If they are concerned about being able to afford higher wages, they have to put in the work to provide a better product/service.

    • @David: Time to cue up the recruiters who schedule 10 wrong candidates for a job, waste everyone’s time, while their HR client complains “we can’t find people to hire!”

  9. I’m a certified cyber threat intelligence analyst. The going rate for one is between $140,000-$150,000 a year.

    I get regular emails from (cough-cough) “recruiters” asking if I’m interesting in a new job.

    Far too many of them want to pay under $100,000 a year.

    You don’t get a Bugatti if you’re only willing to pay for a Ford Fiesta.

    • Wow, where do I get THAT certification? :)

      I’m a retiree (not totally by choice) and have plenty of time on my hands to learn a new skill!

      ;)

      • Most of what you need to know you can learn from the library and online for free.
        Check out Mike Chapple and Professor Messer, SecureWorld, CompTIA and the ISSA to get started.

    • I have to agree. In 2003, I was contracting as a professional project manager at a large software company making $60 per hour. I get several requests a day now from random “recruiters” offering $60 per hour as a contract project manager, running what appears to be pretty complex projects. Very interesting. 20 years more experience and the same wages as 20 years ago? Something is fishy.

      • That’s been my experience. (See my comment below.)

      • Indeed. In 1999 I was working in a local glue factory (quality control) making $15/hour. Twenty years later I was working in another local factory as an AutoCAD designer and backup CNC programmer, having worked my way UP to $15/hour. It doesn’t make any sense, especially when you consider inflation and the fact that the latter position required a more advanced skill set.

      • Contract hourly rates for marketing managers/directors have absolutely cratered. The few FTE jobs out there at director/VP level all want some impossible combination of brand/digital/growth (lead gen/ABM) marketing experience–and they are few.

        Why management people get disgusted and cynical with employers:

        After over 6 months of layoff and a year of looking because I knew for 6 months my job was being eliminated due to acquisition, I landed a long-term contract as a senior editorial/content manager (because I can write) at a giant consulting/professional services firm. I barely could get the truly low-ball rate up a few bucks. Even so, I estimate it’s 1/3 less than the pre-COVID rate. I know it’s about 15-20% lower than comparable spots I interviewed for (but didn’t get). Then when I took the job, I got another vertical (actually a horizontal) added in to the two verticals I knew about in the interview–yep, I got sandbagged, and nothing I could do about it. Far more than I bargained for nor really wanted to handle. Like most multi-nationals, it’s a puzzle palace with meetings all day. For me, the final straw will be if my boss won’t sign off on time over 40 hours a week, which the agency can’t tell me–and in my first two weeks I’m already well over!

        Any advice on what to do?

        • FYI, I quit the job. When you are lied to, dumped on, and underpaid, I called three strikes and out.

      • The Bureau of Labor Statistics tells us pay is up 0.7%, highest bump in a long time. Yah?

    • Yeah, pay rates in tech are crazy. I get automated emails from Hired and Glassdoor saying I’d be great for jobs with estimated pay rates of one-third to one-half of what I’m currently earning. On the flip side, I have a friend who is obsessed with getting into one of the FANG companies (Facebook, Apple, Netflix, Google, etc), and I know from him that what I’m currently earning is one-third or so of the compensation at a comparable job level at those companies.

      And then people flee California and make the cost of housing in Montana jump an order of magnitude in a month… (rivergeddon)

  10. I’ve been discreetly looking for a new job for 2 months now as my current employer of 8 years tenure is a sinking ship, and a clown show to boot.
    Interesting what I experienced in 2010(in the throes of the “Great Recession), and what I’m experiencing today.
    Before, it was low wages, hiring the young (and cheap!), incessant ghosting, degrading in your face interviewers marginalizing my skills and age, time wasting/go nowhere interviews, blatantly implying that I’d be a drain on their health insurance, and interviewers pimping and trying to get free consulting out of me.
    Today, going old school, I’m actually getting a fair amount of hits on paper resumes submitted in person, or via snail mail (I don’t pajama blog on indeed.com). Hiring managers are asking the compensation question soon out of the gate, and the (conservative)competitive figures I’ve been shooting them (I’m not asking for doctors wages) has been met with good acceptance. I’ve heard more and more hiring managers saying that they’re seeing (often younger workers) who have an aversion for anything manufacturing related, and that they want to pick on a computer all day long. I’ve even had younger hiring managers tell me they’d welcome an older (I’m 63), skilled, and dependable worker, over their peers. I’ve also seen less “being triggered” by gritty straight forward candor. Bottom line, there’s a lot of people who just don’t want to work, or want to pencil push remotely forever (not sustainable).
    While I’m just 2 months into my search, and have received no offers yet, I’m somewhat optimistic, and have even predicted, that going forward, especially in certain industries, that there may yet be some semblance of light at the end of the tunnel for us older workers.

  11. You can just analyze this with the total number of jobs available number. Some of the jobs are crap, some are scams and then there are those that require skills that not everyone has. HR does a great job of weeding out people that would probably be good candidates because they are overwhelmed and/or too lazy to bother interviewing candidates that don’t fit “exactly” in the job description box. Some job descriptions are so crazy you can’t even understand them….the whole hiring process needs to be revamped—hello SHRM- are you listening?

    • My job search this go around, has been interviewing with hiring managers exclusively, and most, surprisingly (and I don’t give much credence to employers in general)aren’t doing the box checking impertinent interviews as much as was done in the past. Whether this is coincidental, or employers are seeing that the “HR Lady” techniques are no longer working, I don’t know.
      Again, I’m talking to small to mid-size companies in manufacturing related industries, so it may be different.
      Since the last Great Recession, I’ve seen less and less of HR out there (a good thing IMO). On the rare case I do get contacted by HR, I tell them flat out that I’ll talk to the hiring manager, and not HR. While that has led to immediate disqualification, the juice isn’t worth the squeeze if you have to go through an HR gate keeper.

    • Former SHRM member here. The organization may have had value at one time but it went downhill a while back. They supported a perfectly good certification program (PHR and SPHR) that was targeted at experienced professionals. I had twenty years working in a subset are of HR yet I took an semester long graduate level prep course covering the “body of knowledge” before sitting for the certification exam. The exam itself long, extensive, and definitely not a walk in the park; one had to be able to understand the effect of a lot of laws and court cases on different areas of HR, apply them to situations, AND know how to deal with people I passed the first time but I know of other folks in the field who failed at least once. Anyone with PHR or SPHR after their name was a qualified HR person.

      So about ten years ago the powers that be decided to bring the program in-house, watered it down substantially to have separate exams in “areas of competency” and reduce the requirements to take the exam to be almost meaningless. Work in an HR “job”, loosely defined, for a few months and you too can become an HR professional with letters after your name. This is part of the reasons why some (not all) HR people aren’t very good these days.

      While I was working in my marginalized subset field of HR, I began to notice that most of the female “real” HR people I encountered could be spotted at 20 paces due to their large, expensive designer purses ( the more chains and hardware the better). It seemed to be their calling card. My company sent me to the annual SHRM convention in Las Vegas as a reward for getting my certification. I was surrounded by thousands of woman wielding large purses dripping with chains. There’s a lot of groupthink going on among the members of that organization.

      • Corrine, thank you for your candid description of the players within SHRM. You just validated my gut, instinct and mental health sense of well being —

        I always sensed that SHRM is run by a Posse of Seasoned Tribal Women, whose polished public persona has charmed, will charm and will continue to charm, manipulate and kowtow to the executive who writes the check for their hired services; these monies originate from the company’s investors and stockholders. SHRM is an expense for all corporations; does not generate direct revenues.

        Underneath these Posse’s professional persona belies a manipulative and greedy sado-narcissist who knows of their power to ‘break the spirit’ of every eager job seeker.

        SHRM’s real modus operandi is similar to human trafficking: ‘Bait and Sell Flesh’

      • @Corrine: Thanks for that blunt assessment and revelation from the inside. Many folks here don’t realize how many honest, frank HR folks we have amongst us here — not everyone speaks up. So thanks.

        SHRM has become a brand.

        But is HR really dominated by women?

        • Yes, it is. Or it was. HR, and it’s predecessor ‘Personnel’, were one of the pseudo management areas that women were allowed to populate. Because they are so “good with people” or something. typically the function reported to Finance. A really good HR job of that time reported right to the CEO.

          That was how it was when I abandoned ten years of experience in comp and benes about 25 years ago for IT. I figured if I needed to spend thousands on a SHRM or similar to teach me stuff I already knew, may as well change careers. Now I’m doing HCM IT work and there is still a very large number of women both as employees and customers.

        • There are more woman than men in HR BUT they tend to go farther and faster than many women. In my travels through HR land over the years, I observed that a man in HR usually rose up the ladder much quicker than a woman. A man could be the kind of person and succeed in HR –good’ol Cajun boy, unsuccessful Broadway actor, snarky gay guy, nice family man were among those I met in managerial positions– but in the last twenty or so years, a successful woman in HR in a managerial or higher position is generally a b**** on wheels and carrying one of those damned purses. (Don’t get me stated on the manicures!!)

  12. “You can’t” just…typo

  13. We don’t have a talent shortage; we have a hiring problem.

    If you can’t find the talent, then it is on you. You are either:

    Looking for a purple squirrel – the perfect candidate that doesn’t exist. Refusing to do any training.
    Excluding people due to age, gaps in employment, race, gender, liberal arts degree or other prejudices that you won’t admit your organization has. Not admitting there is no reason for this job to exist or leaving a job open for months on end. Refuse to consider other alternatives like apprenticeships that have worked well for millennia. Not willing to pay a living wage for the job such as offering $11/hour for a $30/hour job. Will not admit your hiring process is broken and you repeatedly run candidates through the ringer. Never training your hiring managers how to bring on and interview talent properly or holding them accountable. Thinking the latest techno fad peddled by job sites or pseudo psychology tests will solve your problem. Do not understand that your insensitive hiring process is part of your marketing and has damaged your brand.

    Before you blame the candidates for the shortage and repeatedly say the talent doesn’t exist, look at your own company first. There is plenty of talent out there that you are walking right past. They are motivated. You can teach skills after you bring them into your organizations. What you need in today’s business environment are problem solvers. Try it. No one wants to stay on long term unemployment. The talent is there and ready to work.

    • @Dan: Are you saying that the chickens in the employment yard have finally come home to roost? That could explain everything. Which economist is going to take the time and make the effort to follow that trail?

    • You have hit the nail on the head. I left the workforce for one year to care for my terminally ill father and I have spent two years trying to re-enter it. I have a degree and years of experience in my field and can’t catch a break. I can’t find a job in or out of my field. There are plenty of folks like me who desperately need a job, but employers slam the door in our faces. Employers won’t give an unemployed job seeker the time of day. The fact that I am in my early fifties doesn’t help either.

      • Same here, add 10 years. Especially in marketing if you’re a generalist, not a specialist in digital or “growth” marketing (lead gen, which every marketer has done) it’s really hard.

        Employers are finding that that younger employees can’t write so that is a gap there, But many of those content jobs are “factory writing” so if you are an hourly contractor you wind up writing and editing on your time. Try to find an employer who will pay for real time spent above 40 or 35…another problem.

  14. Economists are not a profession so take anything they say with a bolder of salt. Who licenses economists? My state licenses Doctors, Nurses, Civil Engineers, Barbers, Hairdressers, Plumbers, Electricians under the premise that their mistakes can cause harm and death. No one talks about what happens when an economist screws up being caused by his errors in judgement. Maybe they need malpractice insurance.

  15. Your points on raising wages are spot on.

    However, lately there has been an alternative to raising wages. That alternative is to automate the tasks required by the job.

    We have seen an increasing amount of automation labelled “AI” which I decode as “Computer Learning”.

    I am still learning some of the automation built into my 2014 car. Last month I took my wife’s 2017 car in for a “software update”.

    I read last month that a company has developed a “Pick and Pull” robot for warehouses that is 8 times more efficient than a human. Years ago, I wrote software to use a radio frequency transmitter to broadcast the items to be picked to an LCD display on the dashboard of an electric tug used to collect items in a warehouse. The software displayed the items in an order that minimized the travel through the warehouse to complete the list.

    My retirement hobby is photography. My latest Canon camera has a very thick manual. Many of the tasks of taking pictures have been automated. After a month, I am still learning the menu system and how to enable these automated features when I need them.

    I have seen many entry level jobs eliminated by automation. So, my thinking is that raising wages is a short term solution which encourages employers to look for automated solutions.

    Jim…

    • @Jim: Interesting point of view and conclusion! I think you’ve hit on something.

  16. In my last job search I was noticing that salaries being offered for roles that I’d been hired for in the past were dropping. By quite a lot. Of course places like Glassdoor and others were telling me the opposite of what I was seeing “in the wild”. Just yesterday, while rummaging around in a carton of old office supplies, I ran across a 25 year old old spiral notebook containing a few pages of notes taken while talking with recruiters in the mid-90s. A /lot/ of the salaries I’d seen during my most recent job search were barely higher than many that I’d written down during talks with recruiters way back when… for jobs that were now demanding a large number of additional skills that wouldn’t have been part of those old jobs. If jobs requiring a high degree of skills is taking such a salary hit, you can easily imagine what’s happening to the hospitality jobs endlessly talked about on the evening news where an extra US$300 is a significant chunk of their former income but /still/ has the employee living below the poverty line.

  17. Excellent discussion! Last weekend on CNN, former Labor Secretary Robert Reich was a guest, and was asked if he thought that the $300.00 UI should be eliminated as the Chamber of Commerce, Mitch McConnell, and many businesses large and small are demanding. Reich said no, absolutely not. Reich said “raise your wages and salaries and then you’ll find plenty of applicants.”

    And then there are other issues: perhaps an unsafe workplace (COVID concerns if enough people haven’t been vaccinated), schools not fully reopened, etc.

    https://youtu.be/yYXCRfp5P_I

    And one viewed sent in a comment to the program noting that her employer isn’t mandating vaccinations, isn’t requiring people to wear masks, so when she gets sick, she doesn’t even get a single paid sick day.

    I don’t think it is because people don’t want to work. I’m looking, and despite “help wanted” signs posted, I still can’t get a manager to talk to me, instead pushing me to apply online (where a computer will screen me for key words, age, sex, etc.). And the employers in my area who are screaming the loudest about the “lazy bums/unemployed” are also paying the least. They haven’t raised wages and salaries, and aren’t offering full time jobs (so no benefits). They’re behaving as if it is business as usual, and still treating applicants as supplicants (ghosting, making people jump through hoops, etc.).

    • “her employer isn’t mandating vaccinations,”

      Not to get into a lengthy political or moral/ethical debate, but this opens a can of worms regarding religious beliefs and a bunch of legal stuff relating to the ADA, OSHA and all the vaccines still being under EUA.

      I’ve personally have had to hold off because I have had severe reactions to vaccines in the past, up to and including spending several nights in hospital. It’s been suggested that I go see an allergist/immunologist if I ever needed vaccines in the future, but haven’t had the need until now. And of course, they are all backed up.

      “so when she gets sick, she doesn’t even get a single paid sick day.”

      Between my wife and I, our employers have come up with pretty good sick day policies, offering extra time off on a temporary basis. It pretty sad that not all employers are doing this, it’s just going to encourage people to come in when sick.

      • FWIW, OSHA just said that if an employer requires a “covid” shot, then any adverse reaction is recordable as a workplace injury.

        From the OSHA website (https://www.osha.gov/coronavirus/faqs#vaccine):

        If I require my employees to take the COVID-19 vaccine as a condition of their employment, are adverse reactions to the vaccine recordable?

        If you require your employees to be vaccinated as a condition of employment (i.e., for work-related reasons), then any adverse reaction to the COVID-19 vaccine is work-related. The adverse reaction is recordable if it is a new case under 29 CFR 1904.6 and meets one or more of the general recording criteria in 29 CFR 1904.7.

        • That’s interesting. I worked in the biotech industry for years. Many of my companies had live pathogens on site to use as positive test samples. I was required to be vaccinated against just about anything and everything. It was never discussed that if I had an adverse reaction to any vaccination, I could claim it against L&I.
          I work in clinics and hospitals now, and that also requires that I provide proof of current vaccinations.
          Good to know.

      • @Dave: I understand that some people have health/moral/religious/political reasons for not wanting to get vaccinated. I think that’s fine, so long as employers do whatever they can to make employees (and customers) safe. Maybe that means requiring everyone to wear masks. Maybe that means limiting the number of customers permitted inside so people can keep at least 6 feet apart. Maybe that means providing masks for employees (one of the local supermarkets provides masks, gloves, etc. to employees; the other local supermarket requires employees to wear masks and gloves but does NOT provide them to employees). There are far too many employers who won’t do this, and to add insult to injury, won’t provide so much as a single paid sick day. You’re lucky that you and your wife have good employers who offer paid sick time to employees. Not everyone is so fortunate, and I can also understand the fears and concerns of those who aren’t willing to risk their health and their lives because their employers don’t want to take precautions (or pay them sick time).

        I once worked for a company that offered paid sick time, but penalized employees who took it. What good does it do to offer employees paid sick time, but then punish them when they use it? If they were worried that people would call in sick when they weren’t sick/abuse it, there are ways around it without punishing employees. They could have required a doctor’s note attesting that you were ill enough to stay home. They could make employees accrue sick time instead of giving it out all at once (the entire amount at the beginning of the year). What I found with this employer is exactly what you noted: their punitative policy only encouraged/forced people to come into work sick, thus sharing their germs and illnesses with those who were healthy, and making entire depts. sick. Not too smart, to my way of thinking. And these were the usual seasonal colds, flu, etc., nothing as deadly as COVID-19.

        A friend of mine recently learned that his body doesn’t make the antibodies for COVID-19, so even though he’s been vaccinated (he learned this AFTER getting both Pfizer vaccinations), it won’t help him. So he’s been taking the time to thank everyone he knows (family, friends, colleagues, others) who have gotten vaccinated as our doing so will help protect him. If/when booster shots become available, he won’t get it, but will be asking/pleading/reminding all of those around him to please get their booster shots so he’s protected as well as protecting themselves. Those who get severe reactions, are allergic, etc. fall in the same category as far as I’m concerned, and that’s why I think those who can get vaccinated should–it protects them, and protects those who can’t get the vaccine.

        • Regarding antibodies: Actually, there are people who lack antibodies who nonetheless have immunity thanks to T cells and NK cells. The immune system is quite a bit more complex than people realize, and the focus on antibodies as (virtually) the sole means of immunity is misguided.

    • Some employers are encouraging employees to get vaccinated by paying them for getting the shots and/or giving them time off for the shot and any side effects. My son got 4 hours of pay at Target for getting the two-shot vaccine.

      I’m surprised more employers don’t do that for things like the flu and not just COVID, especially ones that are in retail/hospitality/etc. A workforce that’s well-vaccinated should call off for illness less. You’d think that would also be a good “selling” point to mention to your customers.

  18. I am very lucky not to need a job right now but would not have an issue going to an office or other location or commute to work because I was prescribed Ivermectin prophylactically, the covid killer. Not kidding. It will be a game changer – should have been already. I feel for the folks out there who are nervous about going back to work.

    • You are surely not in the Northeast because state policies have prohibited both ivermectin and HCQ! Easier to prescribe on a EUA gene therapy which is what the vaccines are, with now many thousands of ‘breakthrough’ cases (several just reported on the NY Yankees). If there is effective treatment and prophylaxis, the EUA should be pulled by the FDA.

      Like a poster above, I’m allergic and don’t react well to flu vaccines, so have avoided the jab.

  19. My company is offering incentive recruiting bonuses for engineering positions that they’re desperately trying to fill to meet work demands. They’ve also set goals to keep attrition below a certain percentage.

    In the meantime, this year’s raises appeared to average about 2.4%, while upper corporate management got their multi-million-dollar bonuses. Hard to retain people when Corporate is not willing to reward them for meeting the numbers that provide them with their bonuses.

  20. As much as they like to talk about how small businesses are the lifeblood of American business and create the most jobs, small businesses have a rough time and it’s getting worse. Large corporations banks, and wall street reap the rewards of the federal stimulus programs and are the first to get the billions that are printed, but it hardly trickles down to small businesses or actual people, the Cantillon Effect.

    So, while one can tell the small businesses, including a lot of restaurants and small shops to “pay up”, and you’ll get workers, they simply can’t afford to just like people are having a hard time getting a decent wage.

    If you’re lucky enough to have worked for a larger corporation and have kept your job throughout covid, you are one of the lucky ones.

    Let’s be honest, $15/hour is about $30,000/year if full time. $300/week + say $300 regular unemployment is $600/week for a year would be $31,200. These are not stellar wages and leave little wiggle room to save for the future or build anything.

    A lot of people have gone through many months of not being able to work and have had time to think about all this. Maybe they made more with unemployment and stimulus, maybe not. Part of what they’re thinking is F this, I’m going back to school or I’m going to do something else. Now whether the reality pans out or not remains to be seen when they do hit the end of their financial trickle and have to do something to actually bring in money.

    I hope something does get shaken up in the labor market from covid, but I’m not holding my breath. All the crying now from legislators about how they can’t find workers because of the stimulus could end any benefits sooner than thought. It’ll be back to the same old, same old and maybe even worse.

    • @Dave G:

      “Part of what they’re thinking is F this, I’m going back to school or I’m going to do something else.”

      I wonder how economists account for that fundamental factor and what they call it?

    • When you calculate hourly rates versus unemployment plus the COVID boost after taxes, assuming you do withhold from UI, I am making maybe double in a highly stressful job where I got sandbagged from the start. I am beginning to think I am the stupid person.

  21. “‘We are going to have to be forced to pay people who are not worth what they should be getting…”

    Wow. Some employers just love to broadcast their utter contempt for labor.

    • @Yoomi: I was wondering when someone was going to pick up on that. 10 points.

  22. Labor to Businesses and HR Managers:
    You get what you pay for (middle finger raised)

  23. Ok the government says 1 million new jobs will be created next month, Next month arrives and they say 266,000 jobs created. No if they are posted on job boards, the placement rate is about 2.5% so 6,650 jobs were actually filled.

  24. Pay is actually secondary. Hire thoroughbreds and pay them market wages. A thoroughbred can often do the work of 2 or more people. If you hire donkeys, you will hear a lot of baying and not much movement.

  25. Hey, try this one Nick. I have a friend who got a really great rate on a contract job, in a function where he negotiates and saves potentially millions for his company. He was in maybe 6 weeks. They just told him that he has to take 7 weeks mandated, unpaid off time as part of cost saving measures. Effectively it cut his rate by at least 1/3. Other contractors, same thing, some less time. His VMO knew nothing about it. He is using the time to engineer a move to FL as his job is full remote, but he’s resentful at getting lied to.

  26. “‘……That [pay raise] will increase my labor costs, then we have to increase the pricing because we have to stay in business. You’re going to see $30 plain pizzas and $35 subs.”

    Have economists calculated what would happen to the cost of a pizza, a hamburger, a sub, typical fast-food meals with increases in the minimum wage? I hear employers and political advocates talking about astronomical price increases for products with 25-50% increases in the minimum wage.

    Hard to separate facts from rhetoric.

    • @Arf: I think the Fed is pretty clear. There’s no reason for $30 pizzas because of the huge slack between profits and wages. Employers can afford to pay higher wages without having to raise prices. Look at the graph in the linked article above.

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