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Comment by guyzero | Hacker News Reader

So this is 95% just employers being unwilling to raise wages which will fix most shortages pretty quickly. In the longer term there may indeed be worker shortages as more countries face a demographic shift towards older people. In pretty much every developed economy the % of the population that's retired grows every year. Japan is now over 28% 65+, the US is 16% and growing, even China is facing the same issue. Long-term it's a smaller portion of the population supporting the economy. I'm sure it will stop at some point, but it isn't for now.

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It's trailing off, but remember that employers are competing with government unemployment benefits.

There's something called the backward bending supply curve of labor. At some point, people work fewer hours because they make enough money that more money won't affect their quality of life. Various closures, and, interestingly, labor shortages, have given people fewer ways to spend their money, lowering the inflection point of the curve.

Also remember about 620,000 people in the US have died from Covid [1]. That's a lot of people no longer in the workforce.

[1]: https://covid.cdc.gov/covid-data-tracker/#cases_totaldeaths

Yes, but the majority of deaths has been older people, most likely not in the workforce.

30% of deaths are from 85+, 27% for ages 75-84, 21% for ages 65-74

Source: same site as you https://covid.cdc.gov/covid-data-tracker/#demographics

80% of those deaths are of people retirement age and older[1], only ~130,000 working age Americans have died of COVID. That's significant, but definitely doesn't explain the extent of worker shortages we're seeing. There are a lot of things going on, but some of them might be there are many people who are now simply willing and able to not work, because that's what they had to figure out during COVID lockdowns.

1 - https://www.cdc.gov/nchs/covid19/mortality-overview.htm

> 80% of those deaths are of people retirement age and older

No, 80% of them were 65 and older.

For people who are 65 this year, full retirement age (as defined by Social Security) is 66 years, 4 months.

And lots of people aren't able, financially, to retire ar “full" retirement age.

Social Security eligibility contributes to retirement age, but real average retirement age is ~64: https://www.sofi.com/learn/content/average-retirement-age/

Many people who are retired can't financially afford to retire, but are more willing to make changes in their consumption habits than go back to work.

95% of those people were 50+ years old and 80% were 65 or older. while terrible, I doubt that contributes much to the labor supply.

A shortage occurs when price cannot rise. When the answer is “just pay more”, the question is not about shortage, only unfulfilled dreams.

> A shortage occurs when price cannot rise.

Do you have an example of this?

Anywhere where the product can be imported from abroad. If you can buy product A from Mexico for 10 USD, but can't get workers to produce the same product for 10 USD in USA, you cannot realistically increase the price.

In that case the price could rise, but does not need to as the market is sufficiently supplied at a lower price point.

A shortage occurs when buyers want to pay more, and need to pay more for the market to clear, but cannot do so for some reason (the law, for example). A decent indicator of there being a shortage is if the recipient of a product or service is determined by a non-price based mechanism, such as a lottery or a needs-based determination, as the usual 'highest bidder wins' method is not possible.

Price gouging laws are a good example of a mechanism that can prevent price from rising. One some of us got to experience at the onset of the pandemic last year.

I was talking with the head of HR at a medium sized company. We were talking about worker shortages and she said they had raised their wages and still had vacancies. I offered to just raise them more and her response was you can only pay someone so much to manufacture a 100 dollar product. It kinda opened my eyes that there was a cap and that we will likely see prices of goods rise in response to this. Wage growth is well overdue but it will come with inflation.

Prices may possibly rise, very true. We as a society/economy have gotten hooked on cheap goods. Perhaps too cheap in some cases.

It's also possible that certain businesses and products we've grown accustomed to, at the prices we are used to, are simply not viable anymore as the market changes.

The market giveth and the market taketh away. A lot of business owners complaining about a "labor shortage" love being pro free market when it works in their favor, but whine when it turns around on them.

Also the labor share of income has fallen in recent decades, so there is plenty of slack overall for wages to go up without raising prices.

> A lot of business owners complaining about a "labor shortage" love being pro free market when it works in their favor, but whine when it turns around on them.

Nail on the head, right here. "Burger flippers" are entitled if they expect to live off their work, but when no "Burger flippers" will come work for them, oh woe is me.

They'll preach about survival of the fittest until they figure out they're not the fittest, and then suddenly its not such a good idea

Exactly. Another comment on this submission (on a completely different thread) put it very well- businesses have no intrinsic right to exist. If you or me decided we didn't want to pay for the rising cost of food, rent, etc., we could be out on the streets and it's their fault. If businesses decide they don't want to pay for the rising cost of labor, a bunch of armchair economists come out and defend them.

Why we feel the need to treat businesses better than we treat other people is beyond me.

Of course when you say this you get a bunch of people saying "But think of the small businesses", as if exploitation is okay as long as your a small business.

Employee's have no right to an employer: Absolutely fine, no issues there, the way things should be

Employers have no right to an employee: Blasphemy! What a cruel, terrible world we live in

This happened with gas prices too. When they dipped too far the oil tycoons started screaming they weren't making enough per barrel.

Not once, ever, have the oil speculators thought the prices were too high and yanked them back down.

Oil prices literally went negative last year when speculators did exactly that.

I don't think it was speculators thinking the oil price was too high. It was that nobody wanted to take delivery on a contract expiring that day, partly because there wasn't any space at the Oklahoma storage facility to take delivery, which presents a massive storage problem. The price promptly returned to its previous level the next day, even within that day, I think. -$40/barrel was panic, not speculators pushing prices down.

(Not only does one not want to take delivery of a commodity unless you are actually using it, but I think crude oil gives off hydrogen sulfide, which is poisonous in small quantities, making storage even more problematic)

This was what happened, and why you heard people saying things like 'I've got some barrels in my garage we could use.'

I reiterate that not once ever have gas/oil speculators lowered prices because they went too high, but they damn sure froze prices when they thought they were dipping too low.

I seem to remember people saying back when it 'dipped too low' (speculators'/tycoons' words) that they most certainly would retard prices if they went too high. They pinky-double-scouts'-honor swore.

Never happened. Especially scummy because oil prices affect everything.

I believe it was late 90s, the last time gas dipped to $1/gal and below. It didnt last but a few days but to hear the oil companies cry it was the end of times and they were going bankrupt.

As an aside has anyone seen the Dubai videos of the children of these tycoons getting bored and racing/flipping/destroying $500k+ cars? If not search Saudi super car stunts/flips/races/wheelies/crashes/whatever.

Obviously oil prices are priced accurately and the companies/families that own them are making the slimmest of margins, we should cut them slack- oh wait, that's every business now.

I hate what humanity has become.

Kind of makes me think back to the 70s/80s when consumer electronics were truly cost prohibitive to most people. Maybe that's kind of how it should be. Maybe a smartphone shouldn't be $500, it should be $3000 instead.

You shouldn't have that kind of conversation without speaking also about profits.

If there is real competitiveness, a company that suffers shortages of an input (workers in this case), would see an increase in price and a fall in profits. Did your friend mentioned profits in the conversation?

Because I'm seeing a lot of this discussions where not even profits is mentioned. Including the article we are discussing by the way, where the word 'profits' doesn't appear.

True but most manufacturers dont have much profit. Cut those and they shut down. Profit isn't a dirty word, its a bare minimum for the firm to exist.

I know that many business, specially small business, struggle.

I'm just saying that is surprising how is not even discussed, like if it was not a factor in what we are talking about.

And this is why raising minimum wage can lead to opposite effect than expected. Person making that 100 dollar product may be already at the limit of profitability for that specific product for the company. Raising minimum wage can cause them to become unprofitable, which means that the worker is let go.

For those with low skills, this can mean unemployment, even permanent one.

I think that a lot of the "worker shortage" is in fact companies being unwilling to understand that they are being outcompeted in the market, someone is able to make that 100 dollar product less costly and thus can attract more workers, or alternatively workers/resources cost less abroad.

Inflation is one outcome of rising waging. Another outcome could also be reduced profits.

Not everyone fears inflation. If you have a lot of savings, inflation is bad. If you have a lot of debt, inflation is actually pretty good.

> So this is 95% just employers being unwilling to raise wages which will fix most shortages pretty quickly.

Don't be so quick to think this. Society can't just poof into existence more qualified skilled workers. It takes years to train nurses and a decade or more to do so with M.Ds/O.Ds.

Right now, traveling nurses are being offered pretty insane salaries, up to and including low five figures a week. It hasn't helped bring more people in, or fixed the burnout. People are just traveling to work for the highest bidder. I suspect most are planning to leave the game after they've saved up enough money.

Sure, these reports tend to lump nurses and fast food workers together, which is of course nonsensical. Indeed shortages of skilled workers in the US have to do with the unaffordability of higher education in the US.

That said, in theory the US could raise wages enough to attract skilled professionals in from other countries. Except that the US also has extremely restrictive immigration laws and a housing shortage making it extremely difficult to pay people enough to live where they're needed.

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