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Greedy employers cry “no one wants to work anymore”

The Myth of Labor Shortages

Source: New York Times
By David Leonhardt

greedy employers

The idea that the United States suffers from a labor shortage is fast becoming conventional wisdom. But before you accept the idea, it’s worth taking a few minutes to think it through. Once you do, you may realize that the labor shortage is more myth than reality.

One of the few ways to have a true labor shortage in a capitalist economy is for workers to be demanding wages so high that businesses cannot stay afloat while paying those wages.

If anything, wages today are historically low. They have been growing slowly for decades for every income group other than the affluent. As a share of gross domestic product, worker compensation is lower than at any point in the second half of the 20th century. Two main causes are corporate consolidation and shrinking labor unions, which together have given employers more workplace power and employees less of it.

Corporate profits, on the other hand, have been rising rapidly and now make up a larger share of G.D.P. than in previous decades. As a result, most companies can afford to respond to a growing economy by raising wages and continuing to make profits, albeit perhaps not the unusually generous profits they have been enjoying.

 

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Nick’s take on greedy employers

We discussed this recently: The labor shortage is really a pay shortage. David Leonhardt explains it better than anyone: Wages are historically low and corporate profits are huge. Employers on the whole can afford to raise wages without any real pain. It’s time to shut down the economic bullies crying that lazy labor is living off pandemic relief funds.

What’s your take? Is there really a labor shortage or is it about greedy employers? Are they unwilling to spend what it takes to keep their businesses profitable? Is this greed in action?

 

 

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31 Comments
  1. I can only imagine a small business owner looking to open back up again while burning through their savings to keep their company alive while being FORCED to be closed by the GOVERNMENT, hearing you call them GREEDY. I’m guessing they won’t much appreciate it.

    There are more reasons for this than just employers being greedy and I don’t think it helps one bit to vilify business owners that have faced down and are trying to come back from the worst government abuse against small business I’ve ever seen in my lifetime.

    I think this modern oppressed/oppressor narrative being shoved down our throats for EVERY problem and issue is a way bigger problem than solving the issue of pay versus profits with the added confusion of massive government interference.

    So no, the jobs and wages issue is not a cut and dry ‘business owners are villains’ issue.

    It likely won’t really matter anyway, with the massive inflation set to swamp us, even the vaunted $15 minimum wage won’t be enough to live on. There’s not going to be a job shortage for long, one of the biggest economic downturns in history is on its way. Incompetent and irresponsible government is going to guarantee that.

    • “There’s not going to be a job shortage for long”. SAYS WHO?
      Today, and yesterday, I was in industrial parks. As far as the naked eye could see were “Help Wanted” signs. Every single account I met with was crying for workers. There’s jobs out there, and they’ll be plenty of jobs to come, in the manufacturing, repair, and construction industries for sure. Skilled trades are seeing gray heads walking, and few young folks stepping up. Problem is, you have young folks who want to pick on computers all day long in cool, trendy, and hip environments, have fun and be entertained, come and go as they see fit, and earn doctors wages to boot. I guess they didn’t get the memo that you can still earn a good living in the trades.
      I have two jobs, and I’ve had several different interviews for a new day job the past 3 weeks. The small business types you speak of, and clearly venerate, well 10 years ago, when I was out of of work, they were ghosting, lying, crass, cocky, vile, and petulant. Today, they’re “hat in hand”, humbled, penitent, and knob polishing.
      I’ll concede that our government is mostly anti-business, but the free market capitalists you speak of (yeah, I’ll grudgingly take it over socialism) are getting a taste of their supply/demand economics, and they’re bawl babies because the deck isn’t stacked so much in their favor now! These industrial and trade jobs are going unfilled, and these capitalist businesses are sweating bullets. It’s good to see a little humble pie!

      • I don’t see how we avoid hyperinflation coming off the massive government spending.

        Then there will be an economic downturn an there won’t be as many jobs open.

      • Few notes:

        1. There are supposedly so many good jobs that need filling yet you have two jobs and are looking for a third.

        2. Many of these good jobs don’t offer training, and they do offer low wages and few benefits. I just checked my local CL site and there are no “good” jobs advertising there.

        • Huh? I didn’t say I was looking for a third job. I stated that I’m looking for a “new day job” in my post. I’ve worked two jobs for years. So do a lot of people. I pay my bills too, and am working on reducing debt.
          “Many of these good jobs don’t offer training”. Yeah, maybe the service sector and neck beard computer jockey jobs beloved on this east coast influenced site, but a lot of manufacturing employers I do business with, and see hiring where I live, are forced to do on the job training now, but like I said, few takers. The young folks in particular don’t want to work in manufacturing and construction jobs.

    • @J:

      “…being FORCED to be closed by the GOVERNMENT”

      Say what?? That’s quite a leap! Apparently they’re being forced to close because they can’t fill jobs or get enough revenue from enough customers. What’s the government got to do with it?

      “…business owners are villains…”

      Of course not all business owners are villains. I discuss the smarter and more successful ones here:
      https://www.asktheheadhunter.com/15639/labor-shortage-pay-shortage

      But I think you have to admit, just as there are good small biz owners, there’s the opposite, too — and they seem to be the loudest.

      “…It likely won’t really matter anyway, with the massive inflation set to swamp us.”

      Not likely at all. Hard data tells us that there’s enough margin in biz profits to more than cover the artificially low wages and salaries without putting good businesses under — and without triggering inflation.

      I suggest you take another look at the graph in Leonhardt’s column. If anything, it’s the story about “lazy workers living high off their benefit checks” that’s goofy.

    • It should be noted that the pandemic and the government response didn’t cause the problem, just exacerbated what we’ve been seeing – companies haven’t kept up salaries for whatever reasons.

      In my mind, there’s at least two issues at play:

      Minimum wage hasn’t kept up with inflation or local COL.

      Company raises have become pathetic, the average is barely more than inflation. So a good chunk of folks are literally losing money by string put.

    • Blah blah blah, all I hear is you whining about a NECESSARY lockdown to keep COVID from spreading. I guess more people dying for the economy is okay with you, huh?

      • Beats dying from Covid, which doesn’t take a disrupted economy to beat.

        Normally a pandemic comes with severe economic disruption: famine, mass starvation, etc. This one brought spot food shortages and a mass influx of Adam Smith dittoheads who never read Adam Smith.

  2. So far I’m betting on the greedy employers. I’ve seen too many of them over the past couple of decades, to pretend they aren’t out there screwing up their free lunches.

    • Yeah, I’d take your bet too if I was a bookie. Many of these employers are greedy as stated.
      Case in point, my current employer has lost over 40% of their commercial/industrial accounts the past 3 months because they started tacking on hefty service fees and charges to nickel and dime said accounts. Thing is, many aren’t buying it, and have voted with their feet.
      This clown show business model is in fact screwing up their free lunch, as you aptly stated.

  3. I don’t see how we avoid hyperinflation coming off the massive government spending.

    Then there will be an economic downturn an there won’t be as many jobs open.

    • @J: As I said above, you can see it in the graph Leonarhardt posted, and he explains why inflation is not likely. So does Fed President Neel Kashkari (listen to the audio clips) in https://www.asktheheadhunter.com/15639/labor-shortage-pay-shortage

      Don’t worry so much.

      • Sorry, I’d worry less if we weren’t pretty much locked into deficits of over a trillion dollars a year going forward. 30% of the money in circulation has been printed in the last 18 months.

        What can’t go on won’t go on.

        Maybe everything will keep pace with inflation and all work out. But the best case is that wages just keep up with inflation as the dollars value falls.

        But historically it Never works that way.

        Modern monetary policy (i.e. print more money as needed forever) is a complete fantasy.

        Inflation is exacerbating the wage issue from multiple angles.

        Irresponsible economics will not lead to a well functioning economy, any more than a toddler shouting gimmie gimmie gimmie will be able to be made happy.

        We will have to reckon with how our country is managing its currency, and the solutions that really fix it aren’t pretty.

  4. I think the better question is “Does this job pay a living wage for this area?” And the answer is not a flat minimum wage, but a quick look at the living wage calculator at https://livingwage.mit.edu. Of course, the issue of “greener grass” and employee churn may still exist if firms do not do their part to retain good employees (and quickly terminate bad ones) but I believe this is a much better starting point.

    • But what’s a livable wage? These statistics are subjective depending on where you live, and they’re often far from truthful, or accurate.
      Wages where I live are lower, but so is the overall cost of living, as compared to other areas I’ve lived at where the wages were slightly higher.
      In my last job I worked with an 18 year old kid (they terminated him at his 90 days due to attendance, performance, laziness, and general disrespect). He started telling his boss, his boss’s boss, and his colleagues that he should be making “$80,000 annually “. Huh? $80,000 in my area is like $100,000 in other parts of the country. I worked there for 6 years, and I was at $68,000 when I got laid off after a buyout. I was also a lot older, and had more skills to offer to boot.
      I’ve seen more and more people demanding doctors wages for grunt jobs. That’s delusional. You have to be realistic, or get into medical school if you want those wages.

      • “But what’s a livable wage? These statistics are subjective depending on where you live, and they’re often far from truthful, or accurate.”

        If you read the technical documentation, the website uses a formula that develops a “basic needs” budget that includes food, housing, transportation, healthcare, child care (if applicable to the table one is looking at), etc. It looks like they use state data and, where possible, county level data, to estimate these various factors.

        So it does take into account where you live. No analysis is perfect, but it looks like they made an effort to be as realistic as possible.

        • Yeah, I wouldn’t take much comfort in this.

          • Why not, they are calculating it based on the variable of cost of living that arise from different areas.

            Seems a better way of coming up with a living wage that just picking a number, putting it on a sign and going out to protest.

  5. Putting aside all the political BS being discussed here I would say that many of the employers that are constantly looking for employees have done so for a long time – decades in many cases. There are restaurant and retail stores locally that constantly have had “Now Hiring” signs up for years. It’s usually the same reasons why they are constantly hiring: wages are crap, no hours/stupid hours, being overworked and used as a punching bag by management, no loyalty from the company, and basically being a dead end job. Most of these places are awful places to work at, so why are we surprised at this?

    I have dealt with manufacturing companies in the previous job I worked at (family business, parent worked in industrial sales) and currently work with the trades at a local home improvement supplier. Both manufacturing and trades employers had the same ridiculous reasons for their turnover of employees: low pay, crappy work environment, screwy management, and so forth. The millennials that employers keep complaining about probably have seen or experienced this sort of circle jerk before and that’s why they don’t go into those industries. Furthermore, many of the long-time employees and owners don’t make an effort to train or show new employees around, so why bother? I’m probably considered a millennial myself and I find the whole thing ridiculous and as far as I’m concerned a lot of employers are just crying wolf. This was going on 25 years ago (I saw this as a teenager) and it hasn’t really changed one bit, people just hear about it more from the media.

    Another observation: pretty much any industry/career/job that LEGITIMATELY requires more than a HS diploma is probably over-saturated with grads and degree holders. STEM, medicine, law, the trades, teaching, even vocational stuff like welding is probably full. It’s something to consider for anyone looking for a job irregardless of what generation they belong to.

    • Yeah, we’ll abuse, sub-standard wages and benefits, and shylocks is how it is with many employers. But nobody is holding a gun to your head and forcing you, or anyone, to work for these ingrates. The Ted Talk rainbows and puppy dogs crew on here don’t get it. That’s how life is, as the Britts say. So in a free market, you vote with your feet, and move on. You’re so off base, especially on trades. I’ve worked in industry for over 42 years. I deal with folks in industry and trades daily, not to mention teaching part-time in a welding program in the evenings at a local CC for almost 6 years now. There’s so many welding, machinist, tool & die, multi-craft maintenance, millwright, plumber, electrician, mechanic jobs, yada yada in my area. Some pay chump change, but the majority pay decent wages and benefits. Your computer jockeys, bean counters, educators, ambulance chasers, donut dunkers, baristas, STEM, bed pan emptiers, SJWs, or millennial men children whatever’s wouldn’t touch an honest get dirty blue collar job if it hit them in the face, nor would they show up daily, on time, nor give any semblance of a good faith effort. That’s just a fact! I could take you to a dozen CNC machine shops, metal fabricators, and every type of manufacturer under the sun tomorrow in my turf, and most are more than willing to do OJT, and pay to send people to trade schools at night.

      • Uhm, no, I’m not off on the trades as you say. You do realize that many of the trades programs you mentioned are often piecemeal jobs? As in, you don’t get consistent work? You might get a few weeks of 50-60 hours/week then you’re off for the same amount? Yes, a welder might get 60 hours/week making $15/hour but might work a stretch of 8 weeks at a time. That’s $1,050 pretax income per week or $8,400 over the course of 8 weeks. However, if they are out of work for 4 weeks afterwards then that average wage falls to about $700/week factoring in the time off. This is somewhat common for welders and other construction trades; obviously, not all of them have this sort of schedule but it’s more common than depicted in the media.

        Another thing, many of those trades require training that goes beyond OJT. I have not seen a whole lot of places that are willing to take the time to have a potential employee earn a degree on the employer’s dime before the employee starts working. Yes, there are exceptions like the apprentice programs for electricians and plumbers and such but even being accepted into those programs doesn’t guarantee work; before my current job I actually tried to get into the local electrician union’s apprentice program up here (upper Midwest) and was told point blank that my hours wouldn’t be consistent or even close to an average of 40/week over the course of the year. Also, many of the trades require that you buy your own tools, some of which can be expensive. Considering that many apprentices only make maybe 1/2 to 2/3 the wages of a journeyman at best, it’s understandable that quite a few people might not want to work these jobs.

        And yes, I’m well aware that we have a free market (mostly) and that no one is “holding a gun to your head and forcing you, or anyone, to work for these ingrates”. I was just pointing out the obvious to people here. And what does politics have to do with this topic here anyways? Who cares about the SJWs/bean counters/donut dunkers that you brought up?

        • @Lina: That’s interesting about the difference between journeymen and apprentices, and the piecemeal jobs. Sounds similar to short-term “contracting” gigs that, for example, programmers get through “staffing firms.” And you’re right, if you’re not lucky enough to get a permanent job, you must average out your earnings over time, to account for “time on the beach.” (I love how staffing firms call it that, as if you’re sitting on a beach with Snoop Dog drinking Coronas…)

          • Well if you’re any kind of welder (or machinist, or millwright, or plumber, or diesel mechanic, or whatever trade or craft you’re in) and you’re working “piece meal” (whatever that hipster/millennial jargon is supposed to mean), then you’re not much of a welder (or machinist, or plumber, or whatever) to begin with, nor are you serious about your trade or being gainfully employed. Actually surprised you don’t see that.

          • Apprentices (in the few apprenticeships left) make a % of journeyman wages, but it goes up exponentially as they go through their apprenticeships until they reach journeyman status.

        • That’s a load of crap, lady!! My students who’ve graduated from the 9 month welding program are not doing “piecemeal work”.(that’s for your artsy fartsy do nothing freelancer crew). You need a grip on reality! These guys are getting decent starting wages, working 50-60 hour work weeks, good benefits, so plenty of OT, and some get production bonuses and safety bonuses. Same for the machinist, millwright, HVAC, pipefitter, plumbing, heavy equipment mechanism, and electrician programs. You’re dead wrong on that! My customers are working full bore, and are hiring manufacturing and construction people, but few want manufacturing or construction jobs, they want to pick on computers and have fun at work. Your words remind me of a journalist for the Kansas City (Red) Star where I live who writes articles that say we need “more pizza delivery drivers and CNAs”. She told me time and time again that “ there were no welding or manufacturing jobs, and the government statistics proved it”. She refused to cover the need for manufacturing jobs. Yeah right! I contacted her young, and incidentally, very woke colleague, and told him I’d hook him up with my customers for an article. The kid took me up on it, and he wrote an excellent article featured on the front page of the paper.

    • @Lina:

      You’re blowing past what the media love to write about (which I believe is based to some extent on PR scripts they’re fed): The problem today is (a) Millennials, (b) lazy people collecting benefits, (c) nobody wants to work. More and more I find that what you’re suggesting is closer to the truth.

      “The millennials that employers keep complaining about probably have seen or experienced this sort of circle jerk before and that’s why they don’t go into those industries.”

      I think the sad truth is that every generation experiences the circle jerk, but is quickly dismissed by their “seniors” who had to walk 6 miles thru snowstorms to earn 50 cents an hour. The circle jerk is still a reality. That is, many employers at all levels of work abuse workers for fun and profit. That’s why there are always plenty of jobs going begging in certain fields. There is nothing more honorable or worthy about laying bricks than working in finance, or vice versa. No generation is dumb enough to work where they get abused.

      “Furthermore, many of the long-time employees and owners don’t make an effort to train or show new employees around, so why bother?”

      This is a fact. Wharton labor researcher Peter Cappelli and others have shown again and again that a big part of the so-called “labor shortage” is due to employers investing less and less in training and development. Meanwhile, HR in these same companies frowns on applicants who want a job “to get ahead” — translation: a chance to learn and so something new. HR wants you to have 100% of the skills they need now, and they want you to accept the same or less pay to do it at their company.

      “I’m probably considered a millennial myself and I find the whole thing ridiculous and as far as I’m concerned a lot of employers are just crying wolf. This was going on 25 years ago (I saw this as a teenager) and it hasn’t really changed one bit, people just hear about it more from the media.”

      Like I said at the start of this comment: It’s what we hear from the media. But it’s nothing new. It’s been going on generation after generation. I sometimes think that when people criticize Millennials for expecting “too much too soon,” what those people are really seeing is a new generation that’s smarter than THEY were, a new generation that’s not going to tolerate abuse.

      • I agree with the last paragraph that you wrote here, and the media and public both try to spin that as being ‘lazy’ or ‘not committed’ or some other nonsense. It’s funny given that the media (both mainstream and alternative) is fairly lazy and sloppy in it’s own work but turns around and puts out the product that it does.

      • So you’re saying be like this misguided millennial woman, or every other millennial neck beard basement dweller, and become a layabout because most employers are oppressive jerks and d-bags?? Wow!! Become a mercenary and monkey branch from job-job. Fire employers when it suits you, not the other way around. At will goes both ways! Or hang out a shingle (like Kevin on here keeps talking about, but never seems to get done). Still yet, young or old, do jobs that are nasty or dirty that nobody else wants to do. Money spends the same, and dirt washes off, easy peasy.

        • Aren’t you the same one who was whining earlier about how no one would give you a job ten years ago? Judging by the posts you made here and elsewhere on the site it sounds like you’re the basement dwelling clown world act. I’m already employed, BTW. I don’t need your jobs or any other jobs from this site; I just happened to see an article I was interested in commenting on. For the record, I didn’t even ask for your opinion; I’m doubtful you’re an instructor at a school given that you tried to pull the wool over everyone here (you didn’t fool anyone here) and you’re more like the neckbeard busybodies you complain about.

          Go get a real job and get in the real world!

          • Get triggered easily? I do have a real job, thank you. Two real jobs to boot. 8 years tenure (at a clown show, but I’m EMPLOYED), plus teaching welding in the evenings for 8 years tenure as well, 5 years at one CC, and 3 years at another CC respectively. No, I wasn’t on here 10 years ago. Never heard of it then.
            If I were you, I’d give up the koolaid, and get a real job, as you say, and this site will be of little help to you, or most anyone else for that matter, unless you are a computer jockey, or a bean counter. There’s a reason the electricians union passed you up, and it’s evident why. Any welder, or any other tradesperson, worth their salt, doesn’t piecemeal work, freelance work, or work for some low-shelf temp agency. But enjoy making those lattes at the coffee house. Put that gender studies degree to good work.

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