Why America Has a Long-Term Labor Crisis, in Six Charts
wsj.com
wsj.com
This is the usual employer whine. Can't get exactly the employee they want, right now, where they are, for what they want to pay, without investing in training or guaranteeing long term employment. World's smallest violin plays.
If that holds true for the average employee then it's inflation, not a wage increase.
In that case the losers are people paid in cash, which is most employees.
Another underutilized labor pool: parents. Specifically, mothers. Universal childcare couldn't come quickly enough.
Example: https://www.eastidahonews.com/2023/09/idahos-direct-care-wor...
> The committee heard follow-ups to a February report issued by the Office of Performance Evaluations that found Idaho’s direct care workforce is short about 3,000 workers compared to national staffing levels. That report identified low pay as an issue for the program primarily paid by Idaho Medicaid, whose rates “do not support sustainable competitive wages for direct care workers,” and create a “wage cap,” the report found. The typical nursing assistant in direct care made $14.16 per hour and could earn 39% more by leaving direct care, the report said.
There is no labor shortage, there is simply no longer surplus labor (due to covid deaths combined with structural demographics) enabling churn that kept wages low.
That falls under tapping underutilized labor pools. You're trying to take someone not working and convincing them to work.
There's about 8% slack in labor-force participation to late-nineties peaks [1]. But per the article, some of that is retirement. It's not a long-term solution to rely on paying retirees to come back into the workforce.
When an individual company (or state) faces a shortage of workers, it's often due to pay. Idaho should pay its nurses more. When an entire economy faces a shortage, it's something more structural.
Will we face a structural labor shortage causing unreasonably low unemployment rates and labor marketplace friction in the near term? Very possibly depending on 55+ workforce exit rates and immigration flow. Are we there yet? I don't believe the data shows that.
There are a number of mental hoops that one must jump through for this statement to make any sense. A lack of surplus labor is what exactly, if not a labor shortage? How is a high supply not the exact same thing as a labor surplus?
Okay? Then don't. Universal doesn't mean mandatory.
Are you suggesting we should reverse womens' rights in the workplace so you can keep a particular family model?
> If wages go up, good.
Wages don't go up infinitely. They go up, then you run out of workers, and raising wages further doesn't bring more labour to the table. At that point, you cut services and increase prices to temper demand.
Sorry, I am having trouble finding a gentler parsing of "we went through this already, it halved wages and made single income households a luxury." To what does this refer to if not women entering the labour force?
> do not think a daycare is the optimal environment for child rearing
I don't either. But the choice isn't caring parents or daycare. It's the number of parents who feel forced by the cost of childcare into being reluctant parents. Or single parents in economic insecurity, or worse, forced negligence.
If childcare is such a significant cost that a family would make the economically rational decision to forgo the potential income of one parent, then the work of a stay-at-home parent is economically valuable, and moving them into the wage economy would not increase overall economic productivity (your original contention).
> Sorry, I am having trouble finding a gentler parsing of "we went through this already, it halved wages and made single income households a luxury." To what does this refer to if not women entering the labour force?
What I believe the parent is referring to is the lack of change in household wealth from a time when most households had a single earner to now when most have two full-time earners. Household wealth has remained stagnant for decades despite more overall hours being worked by parents. The gains from increased labor force participation have been eaten by higher costs and stagnant wages. More money is moving but the average family hasn't seen their wealth increase.
It was a reference to women having to enter the workforce due to inflation. Only a little over half of women want to work outside the home: https://news.gallup.com/poll/267737/record-high-women-prefer.... For women with children under 18, only 45% want to work while 50% want to be homemakers.
The fact we’re talking about “universal childcare” while ignoring the equally large if not larger demand women have for staying at home shows our warped priorities. Instead of universal childcare, we should just pay families for children and let them decide whether to use the money for childcare or to enable one parent to stay home.
Low fertility rates are a real problem across the developed world.
Well, if this is true, your point is moot. Children don't have past experience to compare to, they're children. Ask a 4 year old what 'contemporary context' is and you'll get a blank stare.
Kind of feels like you're arguing for the sake of arguing.
It would be interesting to see a direct cash transfer longitudinal experiment where you pay families for a parent to stay home and provide care for childrearing vs universal childcare, to see what that does to fertility rates and wellbeing of both care provider parent and the children being raised.
It seems so incredibly silly and shortsighted to be offering up free childcare to enable a parent to work when they could be working at home (if they choose!) raising their kid(s).
This is fine, as long as it’s cash and not a tax credit. I always imagined a universal childcare program being administered by states to be given a block grant by Washington. Most states would simply offer vouches/credits. Some would want to run it themselves. But in no case would the federal government be opening direct care—that is simply unprecedented.
It requires the recipient file taxes in a timely manner; is paid ex post facto, which means expenses are being reimbursed in arrears; and requires good money management to last the whole year. Imagine if unemployment were a refundable tax credit: you get it, lump sum, credited against your taxes after you’ve been laid off.
wow, what a great problem to have. how common is it to encounter this issue? Amazon warehouse workers? Did they increase wages?
It's common in regulated professions where entry is gate kept.
To be clear, I'm not convinced we're in a general labor crisis. (Automation should release a lot of supply.) But claiming the concept is mythological is historically inaccurate. (See: raging inflation in mining towns and settlements, which were disconnected from large labour markets.)
> Amazon warehouse workers? Did they increase wages?
Yes [1]. And it's working in that they're managing to hire some people [2]. But productivity per employee is going down, which is directly feeding into increased prices to consumers.
[1] hhttps://www.cnbc.com/2023/09/19/amazon-adding-250000-workers...
[2] https://gadallon.substack.com/p/amazons-holiday-shopping-lis...
Ah yes, the market fundamentalist argument of "market forces don't actually affect you". Wonderful, amazing, very good-faith.
That requires more workers to care for the kids.
Following such a scheme, on average you free up more workers by sending kids to kindergarten.
[1]: https://lovdata.no/dokument/NL/lov/2005-06-17-64/KAPITTEL_6#...
Unsurprisingly, none of the solutions involve lower share of income for execs and shareholders in favor of larger share for workers.
Tautologically at a certain wage you could convince the elderly and children to work but that’s not really useful compared to have a larger working age population.
Source for the labor existing without immigration? There are tens of millions of people retiring compared to turning eighteen. Increasing pay should increase labor force participation a bit. But it doesn't solve the fundamental demographic problem.
[1] https://www.businessinsider.com/millennials-living-at-home-a...
Plenty of people want to come to the US btw, if you look at all the people coming over the southern border illegally. We just need programs to help those people do it legally, distribute them across the country (instead of concentrated in border states) and help them get acclimated to american culture.
The comment argues labour shortages are a fiction used to drive down wages. Immigration solves a labour shortage by driving down (or stabilizing rising) wages.
If wages for other jobs increased a lot, servers could be enticed to leave the restaurant industry, and go elsewhere. No one really needs waiters. Customers can instead go to the counter and order themselves, and pick up their own food (this is usually called "counter service"). Eliminating all the servers in the US would free up a LOT of labor for more important tasks. This is just one example. People paid to pump gas at full-service gas stations is another (which has largely disappeared, except in two states, NJ and OR).
You're describing totally different modes of dining. That said, this is probably the direction we're heading: servers will make more. And dining out (actual dining out, not fast casual) will become more expensive.
That said, you have a point. We have a lot of make-work jobs. cough cough TSA. We also have a lot of jobs that look likely to go away to automation, e.g. long-distance trucking and certain warehouse roles. So maybe this balances out on its own without consumer prices rising too much.
I'm also describing how the high (and getting higher) cost of dining in America is partly a function of American expectations. In other countries, dining is much cheaper, but from what I see, there's far less labor involved. Here in Japan, eating out is pretty cheap usually. (It's similar in Europe.) But there's less service: you have to actually yell for a server sometimes, or otherwise get their attention, because they're busy serving other tables or doing other tasks. They don't have time to come check on you, and in fact it would be considered rude if they interrupted your conversation just to ask you how the food tastes, but this is perfectly normal in America.
If American restaurants adopted a different service model and standards, costs would be lower, it's pretty simple. No one really needs servers hovering over them and chit-chatting with them and acting like their best friend.
I don't like to use TSA as an example because it's a government service, which doesn't operate under market pressure the same way as private business. My point is there's a lot of unnecessary labor even in privately-run businesses.