There can't be a labor shortage on a free market, right? There can only be a labor shortage for the price you are offering for that labor.
I highly recommend this paper from the '90s. It's just as relevant today as it was then. https://www.ineteconomics.org/uploads/papers/Weinstein-GUI_N...
To be clear, there is a place for H1-B and O-2 visas, but they are systematically abused, especially in the tech sector.
To bring someone in from a foreign market they should be earning the top 10% of income for their field. The fact that they are synonymous with "cheap" is a major issue with the way the system works.
The current H1-B minimum salary is $60k That's FAR too low. They should be earning at least double that number so as not to artificially depress wages in the US.
It creates perverse incentives for companies to "look" but not find employees (unless they are willing to take a sub H1-B wage).
But further, H1-B employees are often in a terrible power dynamic. Being fired from their job often means being deported.
You can't compare H1B salaries for like nurses in the midwest with tech salaries though.
H1B salaries also have a tendency to be under-reported (because they're base salaries): if you look at my L-1 form, it says a salary that's at worst half of what I made in my worst year in the United States.
There is a huge problem with allowing unlimited immigration of any category of people. Resources and space are finite. One country can only hold so many people and still offer a comfortable and safe life, just like one home can only hold so many people.
Our country can hold the world's population of high skill individuals seeking H1B status. It certainly can hold the number of individuals companies would seek to fill those roles (assuming salary is adjusted such that they'll not abuse the system).
We've reached a point where our opinions simply differ. I don't think our country can hold nearly as many people as you say, nor do I think it should. I'd rather help our existing population of high skill individuals get jobs, train up everybody else to see how many more people reach a high level of skill, and then if we really do find ourselves short of labor, slowly open up to people from abroad.
What sort of doublespeak actually arrives at “I want higher wages and better working conditions” after going through this (possibly proprietary to you?) process of unpacking the ~real meaning~ of people’s words?
The last administration actually started doing something about it, and issued a lot more RFE for fraudulent applications.
Salary is not the only significant parameter. Awful working conditions also makes it very difficult to attract and retain employees, even if they are well paid. See for instance how one notoriously abusive FANG is currently experiencing high "regretted attrition" rates in spite of paying FANG-level wages.
What about the cost of housing? Do you call that a shortage or do you blame homebuyers for not paying enough?
In the US right now, the workforce participation rate is at all time lows. There are more than 5 million people that were working in 2019, that are not working/looking for work today. That is a lack of supply, AKA a shortage.
It is pretty clear in this case that the supply exists, just not willing to enter the market at the clearing price.
Under this model, the word shortage is not well-defined.
This is certainly a model but it makes discussion hard when two models are using the same signifiers to represent different concepts.
That's how free markets are supposed to work.
I don't logically understand how someone can complain about pay being too low when working at all would be a huge raise from their current income.
That's why corn syrup became so popular. Its price isn't controlled.
The price of corn has now been pushed higher by idiotic ethanol mandates.
That's why you see a lot of "real sugar" products these days. Sugar's become more attractive in price as the price of corn products go up.
Unfortunately corn prices going up has been a serious burden on Mexican households where corn is a huge part of the diet.
The other meme is that this argument applies to nothing else: GPUs, cars, etc. are in a shortage. The bid and ask not crossing is evidence of a shortage.
There is an easy conclusion: HN users are on the ask side in the former case and the bid side on the latter case and merely attempting to propagate a meme that attempts to move things in their direction.
GPU Shortage has nothing to do with Employee shortage.
The GPU shortage is a symptom of clouds, crypto, consoles and more importantly Apple. Apple has so much buying power that they purchased the majority of fabrication capacity to sell you M1* chips. It doesn't matter what consumers want or do.
As for Employers and wages - Individuals can actually choose to work for places that pay livable wages. There is nothing more important in a capitalist society than wages that afford you the ability to thrive in said society. If businesses can't pay those kind of wages, those businesses shouldn't exist. Workers are not socialized labor systems for private business profits.
This line of thinking would explain why one business with higher wages has an easier time recruiting and retaining employees than a business with lower wages, but I really don't understand this argument for a nationwide lack of hireable people.
Is someone better off making $12 an hour or $0 an hour? Unless they've found someone to subsidize their life (relatives, governments, charities, etc...) earning nothing makes their life worse off than earning a lower wage than they might prefer.
I like how this gun-to-your-head reasoning only applies to workers and not companies.
Are businesses better off staying closed indefinitely to avoid paying more than $12/hr? If your answer to that is “Yes”, then the “shortage” is among the demand for labor.
The line of reasoning that corporations are simultaneously both hurting from staying closed and they don’t need workers that much doesn’t seem logical.
Meanwhile, at a lot of these restaurants that fail - the owners absolutely THRIVED while screwing over pay and once that scheme was busted, its not the employees fault for not wanting to be a part of it.
This re-balance was long over due since the feds and states have not done much to keep up with livable wages themselves (at the pressue of businesses who said it would hurt them)
I love this phrasing and agree 100%.
There are a lot of people in the comments to this story making convoluted partial analogies trying to argue against your point without actually saying the quiet part loud.
You cannot sate the insatiable, even if Apple stopped eating.
Extended unemployment benefits may now be over, but many are still not hungry enough to accept current wage levels. Post-lockdown demand is also different as many people realized life is better spending time with family than burning the midnight oil just to purchase more toys that will never be used.
This is not to say wage increases are bad. They are good. This is what we would want to see: jobs paying too little not getting applicants, forcing companies to increase wages. It is, however, bad that the government interferes.
What's funny is that for YEARS we've had employers saying "We'll go out of business if the minimum wage is raised $1." But now, they seem to find a way to pay much higher wages. It's just complete BS.
When I was a wee lad working in California fast food, minimum wage went up $.15, to a whopping $3.10/hour. What did the franchisee I worked for do? He figured out that at Store A, he had used roughly 30000 man hours of labor. $.15 increase in minimum wage meant an additional labor cost of $4500 (not counting payroll taxes, so maybe an additional 25%).
So he tells the store manager, cut the total # of hours used by 1400 over the course of the year. No thought given to how this would affect QOS, just cut the costs. So shortsighted.
I would also say that job fills are lagging enough not to have conclusive data yet. While you mention that jobs weren't filled in states ending benefits moreso than those that did, there are some articles out there that argue against that claim: https://www.zerohedge.com/markets/experiment-over-labor-mark...
The above looks more at jobless claims and unemployment rates than total jobs filled. The US data, which is limited for me to perform eda since I'm on mobile, appears to be largely unchanged for states when comparing to a year ago: https://www.bls.gov/news.release/laus.t03.htm
From that we can maybe say that, although not encouraging job fills, at least ending the federal part of the unemployment saves tax dollars.
But I also don't think that is the full story. Although the extra $300/week ended in some states, the existing state money was still there, and that can go a long way to living a life of leisure when you're only other expenses are food and housing (let's not forget that there was also an eviction moratorium/no doc 12 month forbearance so the housing costs, even without $300 extra, are still subsidized by tax payers).
Even when the eviction moratorium ends, most evictions have to go through the courts which are going to be slow due to the amount of cases that will be filed.
And none of this touches on the stickiness of wages (hence businesses trying to avoid) and what that means for someone that just got a year+ of paid vacation while retaining their prior annual income or even exceeding it.
I don't think we will have a complete picture for awhile.
Also, the franchise I mentioned was McDonalds, and throughout the region, this was the common way of "coping" with min wage increases.
"Life of leisure" wasn't a comment on buying power, rather it was a comment on free time. If housing payments are a non-issue, all that is left is food and utilities. Unemployment can go a long way to covering those, often times exceeding those costs. The rest of your time is available for rest or self improvement to push yourself into a better position for when you're ready to re-enter the market.
McDonald's may be a large franchise, but that doesn't mean they make great decisions. We see large businesses go under all the time. Too many bad decisions, changes in the market, etc. will have them going to the same end.
Edit: McDonald's response to wage increases isn't uncommon. Many business panic and reduce labor costs immediately so they can avoid passing the costs on to the customer. We see this in many metros, such as Seattle. For the workers that get to stick around, they have a better quality of life. But those workers that weren't providing value in excess to the new wage requirements are cut and have a terribly difficult time finding a new position.
I wrote something much longer, but to distill it down, the government didn't interfere. They did the very least they could possibly do compared to what they did for other transfers of wealth during the height of the pandemic.
Most people can't just go spend time with their family, and those toys are distractions from the shit show that is our corporate democracy.
Not only did they do that, but they also became arbiters of which businesses were "essential", part of the wealth transfer problem you mentioned. Couple that with ppp loans being processed by requested size because the government attached size percentages to the payouts realized by banks.
Government paying people not to work was interference, along with everything else. I believe that people are owed just compensation for it too! But that would look a lot different than extended unemployment benefits - people would be receiving their full salary.
All of this is interference and bad and not supportive of free markets.
Rather, the government should have done the necessary thing and forced people to evaluate their own risk. Nobody wants to visit your store anymore? You go out of business, and the gov isn't on the hook. That would be free markets.
Adam Smith emphasized the limiting of government intervention, not the complete removal of it. He also believed the government to be responsible for the education and defense of a country. While we can argue over what sectors are in fact 'essential', and about the government's execution, but it is reasonable to assume that preventing physical harm and death during the pandemic is a valid function of a country's government, according to the father of modern economics.
Going further, he argued in favor of 'institutions that promote free and fair competition'. So, I would contend that payments to prevent citizens from starving, and from subjugating themselves to the enrichment of others for scraps while in fear of bodily harm, are not only in line with Smith's ideals, but those payments create fairer competition.
If anything hurts the average business, it is entrenched conglomerates and chains, especially those with huge cash piles, that can easily raise wages to meet labor's demands. And that situation exists specifically because of a lack of government action to discourage the hoarding of capital.
I believe the government has a duty to implement regulation when there is harm caused to a third, non voluntary party in a transaction.
> Based on your arguments, health inspections, environmental impact reports, and laws against child labor would not exist.
I agree about not having health inspections. This should be left to third party businesses which offer accreditation. Businesses can opt in/out, and consumers can determine their risk tolerance. After all, a company that poisons someone is liable. Companies likely would be incented to seek out a third party accreditation or face higher insurance premiums. Result is nearly identical while the mechanism is the market and not regulation.
I think the Wagner Act, which is what forbade child labor, is terrible legislation. While it is preferable for children to not work, we have studies which show that child labor is mainly derived from poverty. Few parents would choose to work their children as opposed to educating them.
The Wagner Act also forced unions upon businesses which I think is a tragedy. Businesses voluntarily transact. If they want to negotiate work conditions through a single point of contact, such as a union, they should be allowed to do so and only negotiate with a union. If they want to only negotiate with individuals, that is again their prerogative. A hybrid approach is fine too. The Wagner Act led to terrible band-aids like right to work which just make negotiation standards even worse.
The same Wagner Act implemented a federal minimum wage which is in direct contradiction to free markets and equally as garbage as the aforementioned effects.
> If the government did not intervene, we would still have slave markets in this country because, as these last few years have shown, many people still see others as nothing more than stock.
Slaves are third parties subject to involuntary negative consequence so the government is perfectly fine to implement regulation here.
> While we can argue over what sectors are in fact 'essential', and about the government's execution, but it is reasonable to assume that preventing physical harm and death during the pandemic is a valid function of a country's government, according to the father of modern economics.
While it is true that I think the government should not have intervened by shutting any business down, I did concede they could make such a decision in the pursuit of public health. However, if they are to take this route, the government must provide just compensation. This is in direct accordance with the 5th Ammendment: "...nor shall private property be taken for public use, without just compensation."
The government effectively commandeered private property (businesses, rental properties, etc.) for public use (barriers against disease transmission). $300 extra in federal unemployment is not just compensation. Neither are PPP loans which were corruptly or incompetently administered. My point is that the government neither left it to the free market nor fulfilled the requirements of the law.
> If anything hurts the average business, it is entrenched conglomerates and chains, especially those with huge cash piles, that can easily raise wages to meet labor's demands.
I believe the violation of the law, whether having significant or marginal impact upon the victim, is a violation, and I therefore do not differentiate as to whether something was fine just because a victim is better capitalized. A very similar argument was just attempted on a constitution-violating "wealth tax", stating it only impacted billionaires so it's just fine. Thankfully it was pulled because it was ridiculous and illegal.
So I think we're mostly the same in opinion! I just am unflexible with violation based on emotional fairness; rather I default to a strict adherence of the law and/or belief that it should default to the market wherever possible.
This is obviously a simplified extreme, but it scales. If there are not enough people to work the available demand, then economic activity is less than it could be—even if salaries are going up and roles are being filled.
And realistically, training is always a cost, even if people don't acknowledge it. It takes time for experienced people to get up to speed at a new workplace.