Early retirement and ageing population causing labour shortages: Lords report

Oh, and not to mention that while $VENDOR is willing to give Wal-Mart a special deal for, say, a bottle of soda for 20 cents in exchange for Wal-Mart placing an order for a million bottles, they will not give that same price to your small corner store. You cannot compete with that without going into loss leader territory, which is highly dangerous.

Effectively, you're asking us to solve the income gap by becoming billionaires ourselves. Can you see the irony in that?

What about a coop shop?

Working at a salon for minimum wage + tips is not a sustainable lifestyle, so you get empty chairs in those salons.

All it takes to open a salon is the ability to work there and easy credit. So you get a lot of salons.

Think of the fast food model. The owner of a McD used to make $200K+/yr, so there is intense demand to open new fast food restaurants. The employees make less than it takes to survive even with massive government program assistance, so the restaurants are empty with help wanted signs posted and early closing hours and drive-thru only. Then the prices have to go up until it takes $25 to take your daughter to burger king for lunch (true story...) so the customers all go away. Its not real food anyway. Then the owners of McDs make $0. "Everyone knows" you'll be a millionaire if you open a fast food restaurant and credit is very easy so there's an infinite line of people trying to make $200K but getting $0K. The cycle takes some time to stabilize. All those people in line have to get educated (LOL thats not happening) or go bankrupt one at a time, it takes awhile.

Service businesses always collapse from the bottom up. I've seen this in food stores, when an area has too much grocery store sq footage for its population. The collapse always starts with permanent help wanted signs and poor service, but it ends with "nobody would open a grocery store here, the just go out of business".

And customers are probably not willing to pay higher prices to attract more workers into this line of work..

When labour is free the amount of work is infinite, but with a higher price some work is no longer worth doing and workers get reallocated into the jobs that are still viable.

It's kinda like the tireless recruiters on LinkedIn, who keep spamming people about call center jobs. I.e. the problem in that case isn't people don't want to work; the problem is that call centres are a toxic work environment that has systematically burnt through the entire 80's generation of self-taught IT-techs only to find out they were a finite resource and that they're almost out.

As for Mom and Pop places, it's a sad situation, but if we want to help smaller stores then the key is specialization and finding niches that can't be handled online. As with everything specialized, feasability is a matter of supply and demand, and wages shouldn't be kept down artificially just to keep them running.

Wealth and consumption are different things, though. And CPI inflation is mostly driven by consumption, not assets.

As it is, the wealthiest people still do not make up a very large part of total consumption. In fact, this is a core reason why they're accumulating so much wealth.

My point is that by taxing assets then, sure, we can transfer wealth from the rich to either governments or poor people. But this will not necessarily make it possible for "regular people" to consume more. Once people try to buy more in aggregate than what is produced by the economy, inflation will instantly bring prices up to a level where consumption is brought down to the production capacity.

Also, this idea leaves out a core mechanism. A lot of people that gain nominal wealth tend to want to use that wealth to buy more spare time. They work less, retire early, etc. Increased taxes on wealth tends to only make such choices more rational.

And when people work less, less is produced in aggregate and so less can be consumed. This effect can easily be much greater than the reduction in consumption (private jets etc) within the billionaire class. In other words, the wealth transfer may actually lead to the contraintuitive effect that the ability of "normal people" to consume actually goes down.

In countries that take this kind of wealth transfer to the extreme (Venezuela, for instance) this is exactly what happens. At first, it seems nice, but pretty soon aggregate production goes down so much that everyone (except the corrupt leaders) become poor.

Now I'm not arguing for the other extreme, either. Too little demand in an economy with excess production capacity is not much better, and that's why the Ford-era stimulus approaches work in such economies (either through wages, Ford style, or government spending, Keynes style).

But the reality is that most western countries are already close to a perfect balance between the supply and demand sides (for the purpose of maximizing consumption ability). This is why the extra liquidity that has been provided recently has been leading to so much inflation, world wide.

In practice, though, if you want to transfer consumption ability to poor people, you have to transfer it from demographics that actually contribute to a large part of total consumption, which basically means the upper middle class. This is how it's done in Scandinavia (where I happen to live), and it actually does work for minimizing the Gini coefficients.

Venezuela actually has an income-gini-coefficient not very different from the USA, even if they're a lot poorer, while the only countries with total wealth close to the US while still having low inequality are social democracies in Europe.

I might start writing the most obtuse code ever so that all the models get skewed by ludicrous amounts of template nonsense, overuse of auto and tonnes of lambda functions where an ordinary function would do (or maybe many static struct with operator() to confuse matters and make the call stack obtuse). That'll guarantee job security.

> Does brain drain not exist?

Of course, I've seen it within regions of the US. Imagine how insane it would be to say that NY city should resist hiring workers from NJ because it hurts small NJ towns. My experience is that the root cause of brain drain is the regional government, keeping talented individuals there only stifles the growth of those individuals, it doesn't improve the region. In fact we see this locally a lot, many more people do move back to NJ from NYC than do to PA from NYC since the former tends to have a lot more to offer returners than the latter.

> Do you want to exfiltrate the young generation from worse off countries?

Of course! From what I've seen either two paths are followed. When local governments have no plans to improve the country they lose all their talent and those individuals succeed. The other path is the China/India path, they improve their economies through exchange eventually become attractive and more youth return and newer generations are more likely to stay.

> Do you want to incentivize young workers to leave their native countries instead of whatever else you must think young workers can contribute there?

Absolutely! It's one of the reasons the US has been able to rise to the level of technological success it has. Most of our greatest scientists where fleeing countries in decay. My experience both locally and globally is that talent staying in an area that is in decline only hurts the talent. Typically it is the governments of failing countries that try to halt immigration out first.

> Do you want to signal to the local young workers they are wrong in refusing the local salaries because someone from abroad will take them?

Yes! I've worked in poor US towns and I always encouraged the best and brightest students to go to a major metro area, expand their skills and get paid more. Would you not encourage a brilliant student from an area of the UK in decline to head off to London to further their career? If the poor town shows improvement they can return and improve the town and live with their families, if the town does not improve then they at least don't waste their skills.

> Do you want to signal to the local population that there's no incentive in raising the next generation because the solution is to have people born and educated abroad to come here to work temporarily and then abandon (with their savings, I assume) the country once they had enough?

I'm not sure the logic of this question. Again, I live in the US where nearly the entire population has their origins in immigration at one point in time. We've never had a challenge with raising the next generation while being open to immigration. Our biggest problem is not immigrants coming in, but jobs going out (as far as manufacturing goes). Your critique of "abandonment" also doesn't make sense given your earlier points. I have plenty of Chinese friends who have stayed in the US and start the path to citizenship and plenty who have gone back to take leading roles in Chinese companies. I consider both of these paths to be a net win.

> Do want to continue to degrade the social fabric by insisting in economic advancement instead of fixing what leads to lack of workers?

I think by definition nobody wants to "degrade the social fabric", and I'm not sure what you mean by this? Do you mean you don't want foreign people mixing with your locals? Again, as an American my experience is that diverse ethnic influence is precisely what makes communities stronger. One of the favorite parts of my neighborhood is the Polish butcher (I have no Polish background), I love being able to go to a Chinese neighborhood and not hear a word of English for an entire afternoon.

Can you point to a single example of a country that has halted immigration and "fixed what leads to a lack of workers?"

It seems like the UK is experimenting with tighter controls but from what I've witnessed it's not going great.

So you have someone on a student visa from West Africa (this is overwhelmingly the source of this problem), they bung £10k to someone who runs a "university", they bring over their extended family (5-10 people), and there is basically no way to deport them now even once the student visa ends.

I agree, the statistics are basically unknown precisely...but the context would indicate that the size of flows are understated (the reproduction rate of non-migrants in the UK is not enough to produce population growth...since 1990, UK population is up 18%).

No, it isn't. Because labour is not a substitute for a machine, you can get rid of a worker for a machine but a machine doesn't vote, can't riot, etc. You still need to feed and clothe a human. The UK has, literally, millions of people who need work and will be unable to support themselves with the economy at the current size. I don't know what the solution is, but we won't be able to grow our way out of this (we tried in the early 2010s, it didn't work, we tried in the 2000s, it didn't work). One issue is that we spend massive amounts of money on subsidies but don't invest in skills (a lot of the problem today is with older people...so improving education won't work there).

The scale of the underemployment is probably ~5m people...in a working population of 32m...it is far bigger than people think AND we are bringing 1m people a year into the economy whose fertility is significantly higher...it is a very big problem.

The issues that the UK are similar to a lot of developed countries just worse, and made worse by unusually bad govt interventions over decades. The frustrating thing about the UK is that a lot of the hard stuff is done well but it is just thrown away by nonsense policy in other areas (i.e. we have a great tertiary education system, and absolutely horrible primary/secondary so relatively few Brits can actually get value of more education...it is just nonsensical)

If planning/housing was solved conclusively, it would resolve 75% of the issues impacting consumers.

You see this in London and some cities outside (Glasgow is one) where there are primary schools with one or two white students (not making a racial point here, I making a point about immigration, Scotland is 99% white so these people have to be immigrants) in a class of 30 students.