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Comment by bko | Hacker News Reader

In a market economy there is no such thing as a "shortage" of workers. You just don't want to meet the market price of the workers with that skill set. You could imagine a widget factory whose economics rely on paying employees < X. And if the market rate for those workers is > X, it doesn't mean there's a "shortage" of workers, but the workers demand a wage that makes your work unprofitable.

The fact is a lot of people are paid not to work through generous covid-related safety net measures. That are supply of workers has been restricted through immigration policies. But it's not a shortage.

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> In a market economy there is no such thing as a "shortage" of workers

You need a license to drive a truck in the UK (the actual subject of the article). It takes a minimum of two months acquire [1]. Even paying a thousand dollars an hour does not magic more qualified candidates into existence at short notice as you appear to propose. The reason for the shortage is the trivially foreseeable effects of idiotic hard-line immigration policies, not market economics or “generous” safety nets.

[1]: https://www.get-licensed.co.uk/licence/hgv

If the pay is good, demand is high and all you need is to go on a two month course, I'd bet a lot of unemployed people would be eager to do that. The "shortage" is indeed because of Brexit, but paying a thousand dollars an hour will most certainly magically summon workers en mass in a few months.

Unless people see through it as a short term gimmick in an unstable industry.

Given the example of last two years, what are the chances people see through anything.

I doubt it. If the pay was high enough and the term was long enough, you'd see interest from retired licensed drivers and licensed driver's who'd changed jobs. Then you have 2 months to train up and license new drivers.

Plus you can outbid others who are contracting owned and operator drivers.

There are people with commercial driving licenses who aren't currently working as truck drivers. They could be recruited if employers raised wages.

And a regular truck driver can be trained in a few months. It's not rocket science.

> And a regular truck driver can be trained in a few months. It's not rocket science.

They still need to pass the tests, there is a backlog of people waiting to take them.

> And a regular truck driver can be trained in a few months. It's not rocket science.

I get why you've said this, but I'm not sure this kind of flippant remark is helpful -- what exactly isn't rocket science? Is it the actual act of training a truck driver? Is it the act of writing down the things needed to get more truck drivers?

Actual process is non-trivial, expensive (you need to persuade people to leave their families), time consuming and involves a chain of other non-trivial time-consuming tasks that currently doesn't really exist (or is at least regionally bottlenecked).

Sure the market will probably eventually sort it out, but that seems neither a quick nor an efficient way of doing things in this case, where this was widely predicted years previous + is now critically required

> Sure the market will probably eventually sort it out, but that seems neither a quick nor an efficient way of doing things in this case, where this was widely predicted years previous + is now critically required

Isn’t the whole idea behind the benefit a free/freeish market provides that it is the most efficient system for allocating resources?

Mind you efficient != resilient

I'm slightly leery of that. But to be fair to the markets here, gov policy + protracted negotiations + lack of concrete information + conflicting guidelines surely made it impossible for a market to actually function properly.

(to be fair to the gov, not sure how they could have operated differently without advising everything the remain side was warning against. Which would have worked I guess, but would have also been bizarre and probably tanked the economy [more])

So based in that, how can it efficiently allocate resources? Given time, sure, maybe in theory. Which is great unless you're a. a business that has actual costs now or b. a real person that needs to eat and pay rent now.

With above in mind, I don't think it's about resilience. Maybe that ultra-simplified answer works! But it seems a pat free market 101 answer -- ignore the context, market will fix it.

Raising prices doesn't only move toward equilibrium by increasing the quantity supplied -- it also decreases the quantity demanded.

There are currently many more licensed UK drivers not working in the industry than there are vacancies.

Maybe ask why so many people have chosen to do other things such as amazon delivery or other such jobs that pay better, have better conditions and don't require regular medicals and certification, etc paid from one's own pocket?

> There are currently many more licensed UK drivers not working in the industry than there are vacancies.

Do you have data to back this up (specifically for HGV-licensed drivers, which is what the post you replied to was talking about)?

I briefly looked for stats around valid HGV licences out there, but couldn't find any recent figures.

It was from a radio interview I heard the other day, not sure what the actual figure was or the official source. So, take my comment as unproven.

> In a market economy there is no such thing as a "shortage" of workers

That's...not true. If you make a bunch of Econ 101-level simplifying assumptions, like that supply and demand curves are continuous, of infinite range, and monotonically increasing and decreasing, respectively, with price, it is a natural conclusion, but those “assume a cow is a perfectly thermoconducting sphere” kind of assumptions don't hold in real market economies.

There can be practical shortages - there can just literally not be enough people in the area to do the jobs. Saying “it’s not a shortage because you could buy the Yankees and pay the players $millions to assemble widgets” isn’t very informative.

It is.. it speaks to wages not raising enough to meet the demand. You wouldn't need the Yankees a lot of people would do it for a million, half a million, 100,000 pounds.

There always seems to be a shortage of people willing to work for little never a shortage of people wanting the CEO's jobs

There is definitely a shortage of decent CEO's, which is why companies are forced to hire and try to work with the charlatans they have today. That is also why the salaries are increasing, they try to get one of the few good ones.

There is a huge supply of people who want to be CEOS so much in fact most places will not hire you unless you have been a CEO before or have risen through external ranks.

If you take what unemployment defines are qualification.. many able body people could perform those tasks if all CEOs decided to move to other careers.

Salaries increase because qualifications increase creating scarcity which benefit the people who create scarcity. If the hiring guidelines say only CEOs can be CEO prices goes up for CEOs, VPs and anyone in charge of making the rules.

>It is.. it speaks to wages not raising enough to meet the demand.

That doesn't really cover the current situation. In the US 7 million or so fewer people are employed than pre-covid. Wages haven't gone down so they can't explain the change.

Something else has changed for these 7 million people.

You could say the same thing about unemployment. There is no such thing as an unemployment problem in an economy, just workers who want too much and think too highly of their skills.

That's one of the problems with minimum wage laws: they prevent the labor market from clearing. Some people want to work but due to lack of skills their labor is worth less than the minimum and thus no employer will hire them.

I understand that people can't live on less than the minimum wage. But the solution to that is a proper social safety net, not imposing arbitrary minimum wage limits.

The problem with this idea is that, beneath some wage floor, workers lose money by working, and would be better off growing food somewhere. The minimum wage is often below this floor, actually - people working minimum wage are often overall paying to work.

Growing food where? Someone owns all the productive farmland and they aren't giving it away. But people who are willing to work hard and get dirty can certainly find jobs in agriculture.

Maybe growing food is a bad example, especially since you may be homeless, though if you do own a house, you can do subsistence farming in almlst any soil, raise a few chicken etc.

A better example could be that rather than working below minimum age in NYC you would be better off moving to a rural area and working there.

>But the solution to that is a proper social safety net

Playing devils advocate with your logic, how is this different from preventing the market from “clearing” non-viable businesses? I.e., don’t many safety net programs essentially subsidize business profits by allowing employers to lower wages?

It's different because allowing people to work for low wages gives them a chance to improve their skills and move up to higher wage jobs rather than perpetually living off welfare.

Or it traps them in a cycle of poverty where there’s never enough time or money to make the skills necessary to advance. When I worked as a dishwasher or landscaper, I wasn’t building valuable skills to progress my career. Maybe your point holds for some careers, but I’m doubtful it’s relevant to most low-wage (especially non-skilled) labor. I think the point is also diluted when considering there’s almost always more people at the lower end of these jobs than the higher, meaning everybody can’t always be advancing. There will always be more dishwashers than restauranteurs (ignoring automation)

For some people the skills they need to develop first are really basic, like showing up on time and sober, and following basic instructions. We're talking about the lowest tier of the workforce here where the concept of a "career" is kind of alien. Many of them have never been formally employed before and need an opportunity to learn really simple things that most of us take for granted. I think most HN users are disconnected from that reality.

> like showing up on time and sober, and following basic instructions

Poor people are not stupid, or unambitious, and have the same addiction rates as the rich. Of course, rich addicts go to rehab, and poor addicts are imprisoned.

When they try to work their way up at places like Walmart, and get fucked over again and again even when they are taking time off to serve in the military[1], they recognize that the system is rigged and there is no point in pretending otherwise.

There is not a single state where working full time at one minimum wage job is enough to pay for an apartment. [2] That's why more than 5 million people work more than one job. They are trying to beat the system. They want an education and a career. But our society does not provide a realistic path for them to achieve any of those goals.

[1] https://www.militarytimes.com/pay-benefits/2021/01/05/walmar...

[2] http://nlihc.org/sites/default/files/oor/2012-OOR.pdf

This comes across as one of those talking points where an employer exploits a worker under the guise they are almost doing them a favor. (See: NCAA athletes or unpaid interns).

I think this take is a caricature of low wage employees. It’s kinda similar to the talk I occasionally hear about the enlisted ranks in the military. “That’s just for losers and dropouts” or to that effect.

My experience is that those low wage jobs can just as easily be filled with every segment of the spectrum from incredibly smart and competent to those who struggle with basic life tasks. The commonality seems to be they were all disadvantaged in some way. Maybe it was a strained family life or disability or sick relative but the necessity of them taking the job couldn’t be boiled down to something as simple as they couldn’t get their shit together

Do you understand that most peoppe on welfare and/or section 8 housing also are required to work shitty jobs in order to receive those “handouts”?

Very few people leave poverty in the usa because of many factors that have nothing to do with welfare.

Minimum wage limits is one of the best tools we have to act as a safety net. What would you replace it with 1 dollar an hour workers with a bigger food stamp budget?

If you can't afford to pay someone the minimum prices you can't afford your business. A minimum wage creates a floor. Allowing low wages means pushing the burden to everyone else not that business.. raise your prices or move to a lower cost country.

Our local pizza places have raised prices dramatically in the last 6 months (16” pizza went from ~$10 to ~$15).

Based on observation during the far fewer times I visit them, they appear dramatically less busy than they used to be. It’s not clear that “just raise your prices and pay workers more” is going to work out for them.

What you actually need to do is keep your prices the same while everyone else raises their prices and collect all their business, then you can afford to pay your workers more. But the end effect is the same, less work for people.

Is this a joke comment? I'm starting to lose the ability to see sarcasm I think. Why would you have expected them to have been busy in the last six months?

Maybe I’m misunderstanding your comment, but why does the expectation of growth in a pizza parlor come across as absurd? Dominoes had 13-14% Q1 same store sales growth over 2020 numbers.

https://ir.dominos.com/news-releases/news-release-details/do...

sorry, it just seemed a bizarre comment: you said it was less busy when you visited it, at a point in time when everywhere was less busy, nothing to do with overall sales

Edit: sorry not OP

I’m not the original poster, but I would expect sales to correlate with “busy-ness”. To your point though, I guess if everyone was doing takeout, sales could still go up and the place could be empty. Where I’m located though, it seems like businesses have been open for dine in for months and people are filling the dining rooms

Yeah, fair as does depend on country (and region)

They were busier (for pickup) this winter than this summer. I checked my own order history at our previously favorite pizza place. We ordered about 5x/month from Nov ‘20-Mar ‘21 when large cheeses were $9+tax and there was often a line for pickup. We now order around 1x/month (at $13+tax) and walk directly to the counter.

If anything, CV19 is much less a safety concern now than before.

sorry, it just seemed a bizarre thing to comment on: yes the sales may have been higher, and anecdotally you may have seen longer pickup lines (at what times?), but you gotta understand why it reads as a joke, because regardless of above, in-person business is almost universally likely to have been lower, restricted to pickups clustered at specific times

As a VP does that $4 difference really mean anything to you?

We've switched many of our family's Friday night pizza nights to "make pizza at home". Can I afford $4 more? Of course. Do I see the same level of value in a ~50% more expensive pizza? Of course not.

Covid has shifted demand. Covid in some areas means limited seating and increased prep costs. Pizza is more popular in the winter. 10 to 15 sounds like a Covid related increase. This is the summer of the gauge where everyone is making back the profits they lost.

If think it's because minimum wage workers are making $50.00 more a week then this would only apply if the shop was selling less than 10 pizzas a day and had about 10 employees which sounds overstaffed and in an area with no demand.

A pizza shop with 1 - 3 employees working making 80 pizzas a day would only need to raise prices by pennies.

> Minimum wage limits is one of the best tools we have to act as a safety net

Minimum wage isn't a safety net at all. Minimum wage is a mitigation of the problem of low bargaining power of unskilled labor; it basically raises but narrows the tightrope above the safety net.

> If you can't afford to pay someone the minimum prices you can't afford your business. A minimum wage creates a floor.

Yes, it creates a floor for the value of labor you must be able to provide before you can be sustainably employed. (It also, simultaneously, sets a floor for what businesses will offer for labor even in conditions of labor oversupply; set at the right level, this makes it a net win even given the safety net problems it can exacerbate, but it is not the same as and does not remove the need for a safety net.)

> Allowing low wages means pushing the burden to everyone else not that business.

Only for the employees in fields affected by labor oversupply that would be employed in any case, and which are employed at lower wages.

Conversely, it also means lifting some of the burden off everyone else for the people who would not be employed with a minimum wage but who are employed without one.

> raise your prices or move to a lower cost country.

Unless you take the workers with you, “move to a lower cost country” means more people unemployed that are fully reliant on social support in the country that squeezed you out. Which is why minimum wage isn't a safety net.

Ugh, gross. That’s just slavery with extra steps.

The relationship between minimum wage and employment is profoundly complex and the empirical data is inconsistent with the simple supply and demand model many believe in. There are many documented cases of increases in minimum wage resulting in reduced unemployment.

>In a market economy there is no such thing as a "shortage" of workers.

Certainly there can be a lag effect though. If there is a shortage of doctors that won’t be remedied overnight by simply increasing incentives because of the amount of time to gain the necessary skills, licensing, etc.

Unless you are willing to lower quality substantially, there absolutely can be worker shortages in a real pragmatic sense

Except the discussion here is truck drivers (lag: 60 days) and restaurant workers (lag: ~ 0 days).

The comment I replied to didn’t mention truck drivers. They brought up a hypothetical widget factory as an analogy for the economy at large

Using this logic, in a market economy there can never be a shortage of anything.

Yep, no housing shortage, just millennials who "don't want to meet the market price"!

What would you call it if we had 5 positions at the widget factory, but only 4 prospective employees looking for work? Wouldn't that constitute a worker shortage, as no matter how high I make my wages as a widget foreman, there are still less workers than there are open positions?

Or is that not something that could really happen outside of a textbook problem?

Advertise a higher than expected wage, and you will see more people coming out of the woodwork.

Offer people enough money and they will move. Offer even more and they will train specifically to do the job.

Jobs that require lots of training can have short term global shortages of skilled workers. But, that quickly self corrects as long as salaries increase.

That does not necessarily follow. It’s very difficult to put food on the table while going to school in hopes of landing a job in a new field.

Pay living wages and provide paid, on-the-job training. That will get prospective employees through the door.

It does at a high enough salary. Some people are unable to pay for their own training but you don’t need everyone you simply need enough people. Start offering Doctor money and people will jump through insane hoops, but it scales down so even 20$ an hour will motivate some people to do a specialized training course on their own dime.

If it's that important to employers, they'll pay them during the training period.

This used to be standard practice. It's a modern development (80s on) that businesses demanded workers come pre trained.

What are your requirements for the widget employees? Are you willing to train or educate? How effective has your advertisement for the job/wage been?

On a microlevel, a worker shortage is a reflection of lack of wage and too strict requirements. You can't find a worker because your potential workers are happily doing a different jobs. You've not incentivized them enough to come work for you. You might say "But we are offering $15/hour!" and that's fine, but that's what a lot of other companies are now offering. You make balk at the idea of going up further as being "too much" but that just underscores the problem.

Now if it truly is a labor shortage, SOMEONE is going to be left with not enough workers. That'll always be the person that wants "15 years of experience! We pay $30k/year!".

Just do the extreme. Do you think you'd struggle to find someone if the offering was "$200k/year!"? Hell no, you'd have people moving to live in your widget city for that job.

Thats not something that happens in real life, because you will run out of resources to pay the prospective workers with before the total supply of prospective workers is exhausted.

Realistically, you can even hire people to manufacture additional workers, if you have the financial and time resources required.

Not really. You'd have to add some very contrived constraints, like:

1) There's no one currently employed elsewhere that can make widgets who you could poach for enough money.

2) Widget making is so specialized and / or time is so short that you can't train up another worker to fill the role.

If #1 and #2 aren't possible because your margin can't cover it, then you have a failed business, not a labour shortage.

So basically "labour shortage" in a market economy is a myth, usually circulated to suppress wages. Anyone who says "labour shortage" really means "not enough cheap labour".

pay more money or any other incentive that would cause more people to be interested in the job. Why do you think FAANG has hundreds of applications for each job while startups struggle to hire?

Paying more is relatively easy to do when your company makes a few million per employee. The vast majority of companies aren’t blessed with pseudo-monopolies that allow them to do that.

The other employees will catch wind of your million dollar per hour offers thrown out in an desperate attempt to find someone, demand that you pay them that much as well, and you'll be bankrupt by Friday. At that point you will have no open positions and everything is corrected for. Or, to avoid bankruptcy, you won't increase your offer and therefore will be removed from the market as a buyer for that position.

A shortage occurs when an external force prevents price from rising. Medical doctors in some jurisdictions, for example, are often legally prevented from accepting higher offers to prioritize patients. Instead their service fees are fixed and they have to accept patients on system that is usually a mix of first come, first serve and needs-based priority. Therefore a doctor shortage, in said jurisdictions, is quite possible. But you generally won't find such restrictions in the general labour pool.

Companies can't just pay infinity wages. They sell a product for a price, often times the economics start to break down for them. Prices are going to rise and we will probably see a reallocation of workers.

> In a market economy there is no such thing as a "shortage" of workers

You can't meet the demand by producing more workers per hour in some plant though

If you need X doctors and only have X/2, no matter how much you pay them, they won't be enough.

Sure you can, skills based immigration. Poach from other countries.

In the 1970s the USA had a crippling shortage of nurses and doctors which was filled by relaxing skills based immigration laws and importing trained medical talent from the Phillipines en masse.

> Sure you can, skills based immigration. Poach from other countries.

there's no guarantee people will come to your country.

for example: would you go to work on the Iranian nuclear project?

Could you even go?

Would your country let you do that?

You keep counting on the fact that people will come to you instead of everywhere else, like it's the 70s.

But more importantly, the conversation is specifically about the hard stop on immigration that Brexit created.

You can't have your cake and eat it too.

Market can't fix stupidity.

I think it's time some nations, like UK, begin thinking about restructuring their society to adjust to the fact that their relevance has plumbed and will keep going down for the next decade.

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