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Comment by aresant | Hacker News Reader

Most businesses that rily on unskilled labor are tripling down on automation / systems engineering.

The common explanation is cost savings, but I've observed another major driver : quality of service.

Our current unemployment rate is virtually the lowest in 20yrs and it's hard to hire ANYBODY as a result. (1)

And the low unemployment rate has had the interesting effect of upwards mobility for the traditional unskilled clerk / laborer / driver / server / etc.

As a result the labor pool that is showing up is less professional / educated than they have been in the past which is creating major quality of service issues, training issues, etc.

Automation in some of these jobs is a necessity, as the automation tech is a closer reality than availability of "professionalized" unskilled labor.

(1) https://www.google.com/publicdata/explore?ds=z1ebjpgk2654c1_...

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> Our current unemployment rate is virtually the lowest in 20yrs and it's hard to hire ANYBODY as a result. (1)

This observation is so weird in the context of flat wages and the proliferation of sub-minimum-wage "gig economy" jobs. If labor was really scarce, shouldn't that put upward pressure on wages? Perhaps what automation is doing is giving employers a way out of competing for labor. The long range consequences seem pretty obvious: massive, rising inequality.

There's a second option I just recently understood in the "high employment == high wages" equation - employers can just wait longer for hires at the wages they're offering. And, based on the way employers keep the jobs posted for months or years, it seems to be working for them.

I guess in a way it's just another signal that the jobs being filled aren't that critical.

In a lot of cases, a job opening listed for months or years reflects a company continuously hiring. I certainly know our office does that.

I've always found it strange that the most 'critical' job positions are among the lowest paid / furthest down the totem pole.

I work for a medium-sized established tech company. We've been running without a CTO and Director of HR for > 6 months. Everything has run smoothly. We've even had open positions for mid-tier management that have gone unfilled for long enough that they were deemed 'unnecessary' and the req was closed.

However, we had two of our operations people (one step above entry level) leave, and our regional office almost tanked completely.

It's almost as if a CTO is around to make sure stuff like that doesn't happen...

No, it is literally operations people who are around to prevent that from happening. (facetious:) C-levels are around to look pretty and offer pleasant platitudes during board meetings.

Or we might see employers paying for "professionalism" and "workplace etiquette" training.

People can be taught that it's not just what they do, but also how they do it that makes them valuable. It just costs some money.

The other challenging issue is that what training people need changes over time, and I think it's hard for people to pick up on that versus thinking they just hired poorly.

For example, younger workers now may have never answered a shared phone line outside of a work setting, so they may need phone training previous generations would have gotten at home.

That's because wages aren't flat. All of the studies which claim wages are flat make one or more methodological errors. The errors primarily being 1) using different price deflators when calculating price inflation vs wage inflation and 2) not including the value of benefits in their calculation of wages. Studies which avoid those methodological errors have shown that wages have kept pace with inflation.

Wages keeping pace with inflation, but not rising above, are "flat."

I think there's some confusion here because often when talking about "flat" or "stagnant" wages people are referring to the idea that inflation outpaces wage increases (which is wrong, and the point I was addressing). But even taking into account how you're referring to "flat" wages, the logic is still wrong. If we take a worker today who earns the same wage, in inflation adjusted dollars, as a worker in, say, 1985, today's worker has a hugely increased standard of living, better healthcare, longer life expectancy, etc.

> If we take a worker today who earns the same wage, in inflation adjusted dollars, as a worker in, say, 1985, today's worker has a hugely increased standard of living, better healthcare, longer life expectancy, etc.

Is this actually true? In the US, healthcare costs in particular have outpaced inflation meaning that a worker earning the same in inflation-adjusted dollars is getting worse care. This is backed up by the fact that life expectancy has started to decline[1].

Finally, saying that "you're better off than 1985" does not address the fact that the economy has not just kept pace with inflation. That growth is going somewhere and it's not into the wages of the middle class. Inequality is not just bad for the people at the bottom. It has a tendency to destabilize politics as people realize that the game is rigged and swing towards the political extremes.

[1] https://www.cnn.com/2017/12/21/health/us-life-expectancy-stu...

It's pretty amazing how the narrative around labor has generate an expectation from employers that employees should get their skills from anywhere but them.

Skilled employees come from being trained and taught. They don't fall from the sky.

I don’t find it amazing, but it’s an issue I try to help solve where I have control. The trouble with an offer that includes training is that it is effectively a provisional offer. Candidates do not like that unless they think they’re getting training valuable enough. Meanwhile, employers don’t want it to be too valuable or else they’re just training people to work somewhere else. So, the offer needs to come with an expectation of 2+ (depending on industry) years of employment on both sides without actually being contractual (again, industry dependent) because of employment laws and because training costs can’t be clawed back as they’re just payroll going to an unskilled worker.

Navigating this, in my experience, takes a lot of emotional intelligence on our part and I don’t know how I’d scale that in a bureaucratic organization.

They don't have to train people to work somewhere else. It's perfectly legal to offer training to someone with a claw back on training costs if they leave before x years. The issue is that this creates a contract and every employer in the US currently wants to have at will employment at all costs.

I have had managers complain about turnover and offered to sign a contract with them if we could agree on set goals that would translate to a set raise if reached each year. They don't even entertain the thought.

Companies and managers want to just mine society for skilled labor but put zero investment into creating it. They can lie in the bed they made at this point. Most employees would prefer known stability. We didn't all start job hopping because the idea of working at one place for 40 years and retiring comfortablly became unpalatable to the population at large. We started getting treated as disposable and now employers are treated as disposable right back

Yes, I don’t think either party wants to be locked into a contract. Your personal example is interesting, though. I’d like to think we would entertain a contract if presented the idea, but that would require negotiation, as I mentioned, and I don’t see how training contracts with financial consequences to the candidate could scale effectively in a bureaucratic org —- but again, it’s a puzzle I keep trying to solve.

I respect but don’t generally share your dimmer view of the labor market, but I do agree that some companies have made it difficult for other companies to present themselves as stable places worth investing time into. I also think some employees have made it difficult for other employees. I try to improve the situations I can control.

Your point about the trust between employers and employees being poisoned by bad actors has been true everywhere I've worked. I've seen both management micromanaging employees out of fear because they had one employee burn them with poor performance. I've also seen employers try to tell their employees that there was nothing to worry about and no one was going to get laid off despite the rumors, _and_ mean it, but employees started jumping ship because that's exactly what a company that's about to lay off everyone says

> It's perfectly legal to offer training to someone with a claw back on training costs if they leave before x years. The issue is that this creates a contract and every employer in the US currently wants to have at will employment at all costs.

There is an obvious failure mode here (well, a related pair of them) -- I don't want to sign a clawback contract, get fired just before x years, and have to disgorge the training costs. This is a live issue with option vesting and it's only not a live issue with training costs because that sort of employment contract is rare.

On the other hand, once we've signed a multi-year contract making it difficult for you to fire me, I may not be inclined to work all that hard.

All 100% true points. That's still the buyers problem if they are going after a scarce resource, in this case labor. In every other market you get a better rate for a stable, repeatable transaction vs being able to buy as needed.

Employers are going to have to raise their rates a lot if they expect to have people maintain skills that are relevant to the employer while not offering stable employment.

> once we've signed a multi-year contract making it difficult for you to fire me, I may not be inclined to work all that hard

Right... Training, once paid for, is a "sunk cost." The decision to fire or retain an employee can't really be based on recovering costs associated with hiring the employee.

The the easy way is to say that If you leave of your own will, then your get credited 1/24th of the training costs for every month you work there. (similar to cell phone payment plans in the US.)

If the employees are only working just hard enough to not get fired, there are other problems with the company. Firings are all stick. There should also be some carrot.

Meanwhile, employers don’t want it to be too valuable or else they’re just training people to work somewhere else.

Or pay them what their worth so they don't look for greener pastures. Having skilled employees is an asset.

I like to focus on this point. The unwillingness to train provides some indication about the labor market, that it isn't all that tight.

If consumers don't show a willingness to pay for skilled employees, then it isn't an asset. In low margin, low skill businesses such as retail for everyday items, there simply isn't much value to be provided other than stocking shelves, keeping the place clean, keeping an eye out for theft, occasionally telling people where things are, and scanning items at check out.

I stay at Hilton hotels and they frequently have digital keys that use phone to open the hotel door. I don't even interact with any staff, just use the app and I'm out and in at my own leisure. Some businesses are just skirting the line between do we invest in employees or automate things, and of course automating things is the preferred option.

consumers don't always have the ability or the option to discriminate based on employee pay. And the lower you are the less you can discriminate which creates a vicious cycle because you are almost certainly in the same boat as the employees at $low_wage_employer.

People might not have been aware that by choosing to shop at Walmart and Home Depot, they would help create this cycle, but we're firmly in it and there's no way out. Anyone that tries to train and reward employees more than necessary is not going to survive as a busines, especially in retail.

Retail and other business that deal with the public also have the problem that people are a pain in the ass from the whole "customer is always right" attitude. No one with options is going to choose to work in retail, so they will always be scraping the bottom of the barrel in terms of employee talent.

Organize Walmart labor.

Difficult. Probably not impossible (they are already employing the sliver of people willing to accept the hours and pay and not immediately able to obtain a better job).

Not bad points, but I won't believe youre first statement (Re: "tripling down" on automation) without a citation.

The heart of what's going on (good or bad; I tend to think it's bad for society in general) does not lie on the surface, instead it's rooted on the flawed notion that profits to appease shareholders should be maximised and indeed prioritized over corporate goals that benefit society in general.

Increased automation and productivity are a good thing. They have the potential for increased standards of living for all. Unfortunately, the profits from increased productivity are not being redistributed/recycled into higher wages and a more educated workforce, they are instead being hoarded at the top by shareholders accumulating wealth.

That's certainly the prerogative of shareholders, but it's a foolish shortsighted bet. This faulty thinking is depleting a large consumer base because an increasing number of people have less to spend on taxes, and also products/services that these same companies sell. So, they're basically stealing from the future to eat heartily now. The future of our children, as a result will have a less educated and poorer populous, resulting in more crime, litter/pollution, and likely even a social atmosphere ripe for violent revolution thanks to the increasingly segregated wealth gap. It is what it is, and you can bet your sweet bippy that I'm not selling the stock I've accumulated for the good of the masses in the long term. However, I don't think it needs to end poorly.

If you want to dig into this deeper, I highly recommend "WTF? What's the Future and Why It's Up to Us," by Tim O'Reilly.(1)

It explains the philosophical shift that needs to occur to repair our societal trajectory, not just for the sake of the 99%, but also the 1% (and even the 0.01% where the worlds wealth reserve is truly accumulating).

1.) https://www.harpercollins.com/9780062565716/wtf/

There are still lots of folks who are chronically unemployed[1], whose skills have atrophied. It's nothing new, U-6 has gone up and down over the years, but we really have not put a good dent in it.

Many people forget about them altogether. They are not all un-retrainable.

[1]http://money.cnn.com/2018/01/10/news/economy/95-million-out-...

I think the problem when you are on the lower end of the market, it doesn't make much financial sense to train you. Nobody is going to invest in these people. The only entity that can save them is the government (ie: social help).

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