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Comment by wgerard | Hacker News Reader

The openings seem to be largely in trades or nonskilled labor:

> Competition for workers has gone crazy, Joe McConville, who co-owns a popular chain of made-from-scratch pizza restaurants, told me. “At almost every restaurant that I’ve worked at, you always had a stack of applications waiting,” he said. “You’d call somebody up and half the time they're still looking for an extra job. That’s not happening anymore.”

> “There are not a lot of welders sitting around looking for work. The construction trades, the roofers, the framers, the dry-wallers,” said Dan Culhane, the president of the Ames Chamber of Commerce. “Those are [workforce] challenges that Ames and Story County and Des Moines face.”

> The trucking industry is instructive here: Trade groups have argued that it is facing a shortfall of 51,000 workers, yet businesses have not yet shown much willingness to cut hours, boost pay, and improve conditions to lure workers in.

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The last sentence is the big problem. I feel like a lot of industries didn't just make the best of the advantageous labour market in the last 10 years, they reshaped themselves to become dependent on it (i.e., on cheap and easily-replaced human capital). Now that labour's tight again, they're finding that they've worked themselves into a hole they can't get out of.

Business just got a massive tax cut. They can dig themselves out by spending on increasing productivity and paying higher wages. The economy needs to be run very hot for an extended period of time, instead of getting crashed by an obnoxiously over-eager Fed that likes to kick the economy into a recession to dampen wage growth for the benefit of businesses in the guise of controlling inflation.

Businesses need to be made to squeal in pain here. Run the economy as hot as we can get it for as long as we can and shove wages through the roof at the cost of business margins (which were just considerably boosted via the tax cuts).

If the Republicans and Democrats weren't collectively so stupid, they'd be cooperating on hammering out a massive infrastructure spending plan paid for by a trillion dollars printed by the Fed across 10-15 years (or similarly constructing an infrastructure bank filled courtesy of abusing the global reserve currency while we still have it). And doing that would juice things that much more right now and for the next decade.

Not much point increasing wages if you are just going to erode them with inflation.

Avoiding worker revolt is the point. If the inflation is bad enough, workers feel pain, demand wage increases. So far inflation has been low, wage increases low and thus cancel each other out (June wage increase 2.7%, May inflation 2.7%).

But from a business standpoint, no point in increasing wages above inflation until workers revolt. So what's needed is a healthy dose of inflation to get workers to revolt, and make business compete for workers by taking the risk, instead of hoarding, and paying more. Businesses and their shareholders have had it really good compared to workers, because workers have been docile and shareholders have been there to scoop of the profits that workers refuse to fight for.

The myth of the link between rising wages and inflation is very common in the media, but there is hardly any connection in reality.

Wages will naturally adjust to the equilibrium supply and demand. If the needed increase in wages to increase production pushes prices up such that supply falls then production will be cut to adjust. That is what actual economic theory says.

In the real world their is a lot of lag, so some market participants will be increasing wages and producing too much, and then they lose money, and have to overcut on the other side, but in a massive diverse economy this random noise balances out.

The market will never over price labor, therefore inflation cannot come from increasing wages.

Inflation comes from printing money (or creating it digitally since we don't actually print any more). When the inflation from printing money results in rising wages, then that is a sign to the bankers that they should cut back so that they can keep the poor in line, and keep them from paying off their loans so that they can't get out of debt.

Real world economics.

Yes, I was thinking about the comment "a trillion dollars printed by the Fed" when I posted my reply.

Run the economy as hot as we can get it for as long as we can and shove wages through the roof at the cost of business margins (which were just considerably boosted via the tax cuts).

i gotta say, this idea has some appeal. since businesses tend to use the new tax savings for stock buybacks or paying out dividends instead of hiring and expanding, force their hand a little.

This is one of the most insightful comments I’ve seen for awhile. Perhaps this is why low wages tend to create recessions as inefficient businesses start to fail. One could argue that these system stressors act as a cleansing agent.

This is actually a pretty common interpretation; Google "positive effects of recessions".

Also, all kinds of stressors can create recessions - from a supply shock (the sudden increase in oil prices in 1979 forcing the US economy to restructure to adapt), to a demand shock (a sudden drop in consumer access to credit in 2008), to sudden shifts in the type of demand (both WWI and WWII ended in steep, short recessions during the switchover from wartime to peacetime production).

yes. i often think that, too. from the article itself:

Yet the experience of towns like Ames and Des Moines show that such “labor shortages” might be due to insufficient wages and crummy working conditions — not an unwillingness of workers to switch industries or improve their skills for a job.

> they reshaped themselves to become dependent on it

What does such a restructuring look like, in concrete terms?

Slashing benefits and wages. Making long hours and unpaid overtime the industry norm. Getting rid of whole departments and replacing them with third-party contractors. These all seem uncompetitive for businesses, but it must seem easy to do when your entire industry sector is doing it: truckers can't leave you if every other company is just as bad.

The dependent part is where these slashes and cuts are accompanied by lowering prices in a race to the bottom within the industry, to the point where every business in the sector is operating on near-zero margins. Then, when wages overall start to go back up, the first business in the industry to flinch has to raise prices immediately as well, and ends up getting out-competed into oblivion. But if nobody flinches, the entire industry's labour pool dries up, harming everyone.

“There are not a lot of welders sitting around looking for work."

That's a good thing. Welding is hard to learn and takes a lot of practice to get right. There shouldn't be people sitting around idle with that skill.

Ask employers who are whining about a shortage of skilled labor "how many people do you have in training right now?"

And ask what they're paying. When an employer says they can't find anyone qualified, it's usually because they're not willing to pay enough. There is always someone qualified.

truth

FWIW, I sit around idle all day long as a 6g certified welder. By "idle" I mean sitting at a desk writing python and trading commodities. Welding is for the birds, and humans that want to lose their sense of smell and eventually degrade their vision. Welding is not fun over any stretch of time.

Same for trucking. Who wants to spend a month at a time away from family?

When people talk about higher wages for these jobs as a solution for the labor shortage, I always bring up improvements in working conditions (safety, hours, etc.) as a perhaps more cost-effective way to make these jobs attractive.

> Same for trucking.

That strikes me as an exaggeration. Notwithstanding "sitting is the new smoking", I don't imagine trucking has nearly the permanent health risks of welding, especially considering that maximum-time regulations are now actually getting enforced, thanks to electronic logbooks.

> Who wants to spend a month at a time away from family?

Someone without a family (usually modified by "yet") or who's into making shorter-term sacrifices for the longer term. The latter would apply if the pay were high enough, but it isn't. The latter type seems to exist in the military.

The question makes an assumption that isn't necessarily valid, as there's another kind of person: one who has no kids and brings a spouse along to drive as a team.

None of this, of course, necessarily translates into an attractive long-term career, but it's also not high- or increasing-skill labor.

> improvements in working conditions (safety, hours, etc.) as a perhaps more cost-effective way to make these jobs attractive.

I suspect the reason such measures are particularly unattractive to employers is that many would be practically impossible to roll back once the job market turns. Wages are a "knob" that turns both ways, but once you've spent money on all those safety upgrades at the plant, there's no un-spending it.

As cynical as that may sound, for low-margin businesses, the fear of being out-competed is always on their mind. Whether the fear is exaggerated compared to reality is another matter.

Some employers don't have the luxury of selecting the employees that work for them, many union shops in the construction business for instance.

The trucking industry is instructive here: Trade groups have argued that it is facing a shortfall of 51,000 workers, yet businesses have not yet shown much willingness to cut hours, boost pay, and improve conditions to lure workers in.

Now that's a good point. The job could be much better if the employers were better organized. Employers want to send someone out on the road for weeks at a time. With better scheduling, the first driver drives for four hours, stops at a truck stop, and swaps trucks with another driver going the other way. Both drivers end up back home at the end of their shift. Where's that Flexport guy who's always on here when you need him?

There are many loads where that system would create a lot of inefficiecies. The type of loads where it makes sense are already run that way. It's called LTL (less than truckload) and is one of the most volatile sectors of the industry. Wages tend to be higher in that sector, though, and there's more home time, so they tend to go to more experienced drivers with excellent driving records.

Yes, overworking drivers is more "efficient". Right now, the labor market won't let employers do that. The winners will now be the employers who figure out how to give their truckers a better life without wasting too much time sitting around at crew change points.

Or buy a semi-autonomous truck that can be used in convoy mode - one driver in the lead, two trucks behind following. Once it gets to a city they all get drivers to navigate to the depot. This is already a feature of the Tesla Semi.

I don't know much about the job market, but it seems weird that they push people throw college for degrees they can't use. My friend got a masters degree in pharma and he didn't get a job for about 2 years, his wife had to work as a retail manager to support their whole family, and he had a mental breakdown because of it.

That's the point I was getting at.

> masters degree in pharma

Is that a pharmacist degree? Don't those need a PhD equivalent to be most beneficial?

It may be a PhD for pharmacist, yeah. We lost touch a few years ago when they moved away, but he went to school for something like 10 years. So I think it is a PhD. But there were no jobs. Last I heard, even the job he has now doesn't cover insurance, so he pays for that himself and they're still living like he works at Burger King.

Why didn’t he learn JavaScript?

I've always heard it was in high demand because every drug store needs a pharmacist and the education requirements are stringent so the supply is not great.

There was a 10 year lag time between when he started school and when he finished. It's extremely difficult to predict what's going to be in demand and what's not over that time period.

Even still there should be plenty of steps in a career between a PhD in Pharmacy and working at Burger King.

Yes, the requisite degree these days is a "PharmD"

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