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Comment by dagenix | Hacker News Reader

Lol - "Labor Shortage". It's like me complaining that there is a MacBook shortage because I refuse to pay more than $200 for a MacBook. There is no such thing - they just don't like the prices that labor is asking for. Maybe a "people willing to work for the money that they want to offer shortage" - but that sounds much less nice for the business.

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part of the issue is how fast they want to hire them too. People do not just think of themselves as employees in waiting.

If you are a business that is going to lay off a bunch of people... temporarily... then be sure get an agreement that they will come back.

Imagine you're one of these workers laid off. You move. You find another way to live entirely, another way to pay the bills, another entire path to another entire career. Heck, even if they give you your old job back... even at a higher wage. Would you take it back? It's not an obvious decision.

Ya. Just because the company would like for people to come back, doesn't mean they have the right to expect them to. The same way that the company chooses to stop paying people, people choose that maybe they'd like to do something else.

Not to mention they've created a huge amount of bad will. Got fired from the trains because "down sizing", or maybe dad did?

Now they're like, "hey come work on the railways" - and the answer is "fool me once, shame on me..."

Maybe it's not just money, maybe it's not just shitty work conditions, maybe people notice when you treat employees like commodities and choose not to become a commodity.

There is a solution for that. Hire unskilled, or underqualified employees and train them. But that costs money and takes time so of course companies don't want to do that. Then there is the fear that the employee will leave and work for a competitor after you train them. The solution to that is to treat them well enough they don't want to leave. But again, that cost money.

Train people on the job? No no, much better to market to youngsters how much demand there is in a field and how easy it will be to get a job so they spend multiple years in school training for it theoretically, only to find upon graduation that things have changed and the industry no longer needs them. /s

In reality, on the job training has largely disappeared in the last few decades outside a handful of trades. Business has pushed the risk and costs of training to labour and the costs have subsequently skyrocketed despite lower expected return.

Absolutely. And then businesses complain because the external training doesn't do a good enough job preparing prospective employees for their specific needs. Go figure.

I like the term "capital strike."

Companies don't want to pay more than $X. That's not the fault of labor. That's ownership trying to force labor's hand.

Correct, they are betting that unemployment benefits and eviction maratoriums will end and the workers will come back. They don't want to get locked into higher labor costs. Some businesses genuinely can't operated at a higher cost price as well

> Some businesses genuinely can't operated at a higher cost price as well

I'll believe that when executive pay at said companies isn't high enough to cover hiring 1000+ front line workers that they supposedly can't find.

Their CEO alone made $14m last year and their wages are $15-33/hr. "Can't afford" isn't the issue.

There are some small businesses that are barely viable who really can't operate at much higher labor costs. That means they probably shouldn't be viable because labor is propping their model up with artificially low wages.

Can you explain? How are wages artificially low? Why is insolvency the solution instead of lowering payroll taxes or whatever business owners generally advocate for?

That's fair enough if they want to try, but they can't complain if that doesn't work.

Low paying employers should be counting their blessings right now. I keep wondering when somebody is going to mention "hazard pay" for any job requires them to work around others. At this point in time that seems like a totally reasonable argument a labor force might make.

Technically that is a shortage. We're also talking about a GPU shortage despite nearly all of them being readily available - if you're willing to pay four times MRSP.

I do agree that paying their workers more is necessary, but increasing the budget for them is still money that has to be drawn off somewhere else. So the term shortage seems quite fitting.

No technically in economic terms that is not a labor shortage. There is nothing preventing the market from clearing.

Then there is always a shortage. I'd always like to pay less than what someone wants me to. And with labor, its not like the companies referred to are offering 4x the old salary and still can't find takers - they are upset that they need to raise wages even a little.

Yeah people always make that argument about labor shortages (you're just not paying enough) but when I made the argument that stores should have fixed their toilet paper shortages last year by charging more, I got downvoted to death. It's the same thing.

The toilet paper shortage has some more interesting aspects to it.

Eg people widely blamed 'panic buyers' 'hoarding' toilet paper, and made fun of how stupid and/or selfish people were.

In reality, much simpler explanations suffice:

Commercial toilet paper that you use in the office (on those big rolls) comes out of entirely different machines and with entirely different materials than the consumer grade stuff you use at home.

Normally, the demand for toilet paper is one of the most stable things in the world. So competition drives the manufacturers to run extremely efficient with no extra buffers.

But with the pandemic, all of a sudden there was a massive demand shift away from commercial grade to the lush consumer grad stuff.

Add in that many factories for all kinds of stuff had supply chain issues.

Yes, raising prices on the consumer grade toilet paper would have helped: it would have encouraged people to economise and to find substitutes (like going with the commercial grade stuff, or a bidet).

But for PR/psychological reasons, there seems to be a limit to how much supermarkets can raise prices for daily essentials.

I've seen that argument, and I'm sure it has some truth to it and may have been the main problem in some areas. However, where I live stores ran out of toilet paper (and hand sanitizer, and water, and diapers) a couple weeks before things started shutting down.

I don't see how the commercial vs consumer grade toilet paper explains that.

Could this type of operation had something to do with it?

https://www.smh.com.au/national/chinese-backed-company-s-mis...

What timeline are you talking about?

Also, toilet paper is probably traded over longer distances than you realize. Your area not shutting down yet, doesn't mean other areas weren't already affected?

That's not the same thing. The reason that you couldn't buy toilet paper was because there was literally none of it on the shelf. That is a shortage. You could show up with $1,000 and you still can't make toilet paper show up out of thin air when it's not there.

What you are describing is having stores re-price toilet paper to reflect demand. And that would have fixed the shortage. The problem then isn't that toilet paper isn't available, its that its price becomes completely unethical - rich people and not-rich people both have an equal right to toilet paper and pricing it up to level where the less well compensated have a hard time affording it - even if is available - is ethically problematic. Outside of there being laws against price gouging, stores know that customers will never forgive them for this - if you are working at a minimum wage job and you show up to Target and toilet paper costs $150 you could very well swear to never go there again.

That is massively different than what is going on here. We're talking about huge corporations that have spent years reducing their work force that want to increase their work for now and are upset that they can't get the same prices for labor as before. It's not like labor is going to cost 10x as before - it's an incremental increase. And its not like this is some fundamental right - people of all income levels should have a basic right to keep themselves clean. Corporations don't get to dictate what it wants to pay its workers. A 25% bump in toilet paper costs probably wouldn't have fixed the toilet paper shortage. A 25% bump in pay may very well fix this "labor shortage".

They aren't the same things.

It seems like you're conflating toilet paper being a product vs someone working being more like a service.

A shop being out of stock does not in itself mean there is a shortage.

> The problem then isn't that toilet paper isn't available, its that its price becomes completely unethical

> ...

> That is massively different than what is going on here. We're talking about huge corporations that have spent years reducing their work force that want to increase their work for now and are upset that they can't get the same prices for labor as before

It also seems like you're trying to moralize this when it's just about supply and demand.

> A shop being out of stock does not in itself mean there is a shortage.

_A_ shop being out of stock doesn't mean that there is a shortage, but when all of them are it is.

> It also seems like you're trying to moralize this when it's just about supply and demand

I don't see how you can ignore the moral aspect - there is a massive difference between being able to afford toilet paper vs being able to hire workers at the rate that a corporation wants.

There's only a difference because you're moralizing it. If you look at it objectively, it's just supply and demand.

Because HN, like most people, tend to form opinions based on self interest.

And people in general like pay raises but dislike not being able to wipe their bums.

increasing prices on toilet paper would have fixed the supply problem for the rich. It would have likely done nothing for actually increasing the distribution problem of supplying everyone with some adequate amount of toilet paper. Nor would it have likely increased the capacity of toilet paper manufacture in the long term.

Maybe variable pricing might have worked - price x for the first n rolls a and higher prices thereafter.

That isn't what a shortage is in economics: https://en.wikipedia.org/wiki/Shortage

It is only a shortage if something is preventing the price from adjusting (like anti price gouging laws or price caps). That is not the case for labor. There is labor available if they pay more, and nothing is preventing them from paying more.

It isn't quite the same thing. GPU prices are driven up because there aren't enough GPUs to meet the demand at MSRP prices. Which is both because demand has gone up due to crypto mining and supply went down because of the pandemic.

I don't think the railroad industry is having a hard time finding workers because there aren't enough unemployed people to hire, there are plenty of those. It sounds like demand is less than it was a year ago, and the supply of workers who aren't currently employed is probably higher. So something else is going on. Possibly, they've driven away peoeple with the skills they want with low pay and poor working conditions, not to mention laying off a bunch of them. And they aren't offering enough to attract new workers, especially if they aren't willing to train workers entering the industry.

What I don’t understand is my the M in MSRP aren’t the ones raising prices as demand increases. Why let scalpers profit? Is it just business pipeline / contract issues?

Possibly it has to do with reputation. If the GPU makers dramatically raised prices it would probably upset customers, and could hurt sales in the future, when there is more supply.

a variation of the classic "we love markets, but shut them down if they don't work in our favor".

The labor force participation rate is at multidecade lows.

It's more like not paying $2.5 million for a house in the bay area and complaining there's a shortage. It can be an accurate statement.

I don't think you're interpreting the labor force participation rate correctly. A low rate usually means that a significant portion of people simply aren't looking for work at the moment, but the reason for that is not reflected in the rate. Right now, many people have decided that taking pandemic payouts is a better option than working for low wages with no benefits, so the rate is lower than it would normally be. If wages were to go up (or when the payouts stop), the math would change and the rate would likely recover.

But that's the definition of a shortage of labor. Like you said yourself, the solution to remediate the issue is to stop paying people enough not to work.

Why do you view that as the solution instead of Employers raising the wages they are offering until they get enough workers?

Why must the answer be to force people into desperation such that they have to take crappy jobs with low pay and no benefits?

because it's worth it to most people to make less working 0 hours per week than it is to make a more putting in 40 hours.

The government is competing with businesses for buying time, but they are willing and have the means to push the price to infinity.

It would be more like the government fining Apple $500 for every MacBook sold and then finding out that you can’t buy a $200 refurbished MacBook because they’d lose money on it.

Edit: that is, because the opportunity cost induced by extended and higher unemployment benefits is greater than the benefit of working — or so close that the effective wage, even at higher-than-usual wages isn’t worth it.

And there is a legitimate discussion to be had about the impact of enhanced unemployment benefits on the labor market - especially since those benefits are temporary. When they run out, it could leave employers that hired people at the wages they can demand today with a workforce that is being compensated more than what comparable workforce would demand in a few months. The fact remains, if employers wanted to hire people, they could. It just costs more today - either via a higher base salary or offering something like a signing bonus. People didn't vanish into thin air - they just want more money to do the work. But it's not a shortage - it's a failed negotiation.

Yes, for a high enough salary, someone will do the job. But it makes a huge difference whether a third party is artificially disincentivizing one of the parties to the extent that a good deal before the artificial disincentive is now woefully insufficient.

To ignore that effect and just focus on the negotiation dynamics is to miss the bigger picture (and unforced error).

You're arguing that the labor market is distorted by unemployment benefits - that may very well be true. But that doesn't mean there is a "shortage" of people able to do that job.

Yes, it means there might be a technically inaccuracy in the use of that term [1]. But the substantive point is still sound, and it would be a mistake to miss that point merely because of such a technicality.

[1] But even that would be dubious. It’s actually closer to the technical economic meaning of “shortage” when artificial effects prevent exchanges that would otherwise happen.

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