Why labor shortages could be here to stay

Or it's really a shortage, and when you're the highest bider for a talent pool on the market what really happens is that a person who's employed will leave their current employer to work for you, therefore just creating a shortage of employees for the competitors.

The validation of "shortage" is really simple. If every employer pays the same high-end market salary, is every open position filled?

Could it be a "companies don't have jobs that pay people well anymore" problem?

That’s assuming that companies have high margins and just have wads of cash to throw at employees. That’s probably not true for majority of the small companies - startups, restaurants and small moms and pops shops.

The demand for workers at current market wages is greater than the number of workers willing to work at those wages. That is the economic definition of a shortage.

One way to get rid of the shortage would be for employers to pay more. Another way would be to reduce demand for workers by raising interest rates.

GDP was never an accurate measure of national production. It makes no distinction between the number of people its concentrated in.

You can't really claim its national production if only one person controls it, as in some countries is done...

And that's why replacement rate (including immigration) is important to the stability of society. With a dynamic value (exponential growth or decay) we struggle to properly predict the future needs.

But with a stablish pattern we can mostly maintain, with little adaptations along the way.

The economist Charles Goodhart has been beating this drum for a couple of decades and more.

The great thing about demographics is it's about the only area in which we can make predictions about the (near) future with any degree of precision (or accuracy).

However pointing out these looming problems and advocating family-friendly and child-bearing-friendly polices just got Goodhart labeled as a right-wing anti-gay nutjob back in the '00s and '10s.

1. Goodhart has finally (2020) written a book after decades of writing pieces on Project Syndicate and VoxEU: https://www.amazon.com/Great-Demographic-Reversal-Societies-...

I really hate people that idolize other people that get it wrong just as much as they get it right.

The baby boom generation isn't retiring, they are rapidly dying because they are now in their 70s/80s and that's what happens when old age takes you.

When there were downturns, the experienced workers crowded out the entry level positions normally used to build job experience. This has set back and snowballed every generation after the baby-boom generation.

This lack of experienced labor, coupled with the massive amount of currency debasement means we are going into a period of high inflation and low production but its more about the currency debasement than anything else with regards to inflation. You can't print money to pay debts owed indefinitely. Like any ponzi it eventually has consequences.

Many generations starting with Gen-X were hobbled at vulnerable times in their financial life. There is no predicting what is coming aside from the generalization that there will be lower birth rates because people are less financially secure, and have no say because representatives are only responsive to campaign contributions (see tweedism larry lessig).

There are times in our lives where if we don't have children, then it doesn't happen for a large majority.

You need to be debt free and have a downpayment of a house by 30, and children no later than 35 for women. Mortality, complications, and birth defects kicks in after that.

Children are expensive and the cost is borne by the parents. Simple economics, if the cost of labor goes below what is needed by a family unit to support the mother and father 2 children to 18 then it doesn't happen. This was well known in 1776 only back then it was 4 children because of mortality.

Something so widely and commonly known being so completely ignored by the people who are supposed to know best, really goes to show how bad things are going to get.

...sorta like putting a penny in a fuse box.

However you need to increase housing and build infrastructure: I wouldn’t call those secondary problems easy to fix. I live in New Zealand where ~30% of our population is people that were not born here (compared to ~15% in the USA). That means NZ need 50% more houses and 50% more of everything else than we would with zero immigrants. I support immigration, but it does cause large issues.

https://en.m.wikipedia.org/wiki/List_of_sovereign_states_and...

No it's not. It's kicking the can down the road a little bit. Worldwide the fertility is plummeting, it's already below replacement in most countries that used to stream people into the US: Mexico, Cuba, Venezuela, etc, not to mention India or China. Perhaps except Guatemala, which is already tiny and trending down as well.

The "solution" here is to make conditions in those countries much worse, so that even the existing population starts to leave and the immigration gets sustained. Otherwise it will be trending down, because the replacement is no longer there and those countries will start facing labor shortages of their own in a couple of decades.

Savings from what? Boomers will still be consuming a lot of resources for a couple decades yet. But they won't be productive or paying much in the way of taxes anymore, which means that younger generations will have to endure higher taxes and/or inflation to support the Boomers. Someone has to pay those assisted living facility bills. (And to be clear, I am not arguing for abandoning the Boomers or anything like that.)

Work to live. I hope you have an enjoyable retirement :)

This is not useful. Boomers transitioning from helping generate supply, ie. Working, to generating demand, ie spending their savings - all that does is increase the money in circulation while decreasing the stuff. Inflation is not going anywhere for some time.