There is no such thing as a labor shortage. There may very well be a shortage of qualified people willing to work under the conditions and for the compensation a company would like to provide.
When stated that way you can see that there are several levers to pull, the most obvious being compensation.
Of course there isn't. This is out of touch employers saying "Nobody wants to work for $1 an hour, so must mean there's a shortage."
It's wild, that same in the service industry, restaraunts for example paying 1/2 dollars an hour and then putting the onus onto the customers to pay in tips.
https://www.businessinsider.com/what-its-like-to-work-at-waf...
It's ridiculous, GenZ has just realized they don't want to participate in the racket and I don't blame them.
But some places are worst then rackets the town nearby.
I do appreciate that, but seems to me that the path towards change (CEO epiphanies) is for as many people as possible boycott the job.. It's a mentality change and I'm glad to see GenZ and others pushing to change it.
Something I have realised since managing to work my family out of the trenches is that the majority of people really do not have any idea on just how bad things can be. And I should add it is not their fault in the slightest. If you’re not living amongst it the articles you read in mainstream media seem like rare anomalies but the reality is that they are not.
The biggest benefit to having a stable background is the ability to be more selective about the job you take as you know there is a safety net.
When you are literally living paycheque to paycheque you don’t even want to risk having to complete another round of probation in a better job as you run the risk of being unemployed in three months time and loss of one month’s salary can start a spiral which makes your currently manageable situation a lot less so.
I say this from personal experience as someone in the UK, I can’t speak for anywhere else.
It's not that they don't want to participate in the racket, it's that the racket literally can not sustain them. Older gens participate in the racket because most of them locked in housing or rents from an era where the racket could support those prices. Gen Z has much higher housing costs that make "the racket" untenable, despite the racket still working fine for older millenials just fine. Housing costs exploding, among other things, has ruined the ability of an entire generation to really thrive or ever have a chance of doing better than their parents.
No argument on housing prices. It's crazy how high they are in a lot of cities relative to the median salary.
Using Waffle House as an example is hard because it's a private company but food service profit margins aren't typically super high. A Waffle House, in a good location, I'm sure makes a good amount of money but the owners of those restaurants are often the hardest working employee there (and they are there, at least in the beginning) if they are going to succeed. Plus, those owners have loans to pay off at the beginning. It's a tough business.
There's more I could say but, the TL;DR is that most businesses aren't making the profits of a Google or Apple and don't usually have tons of spare cash around to give everyone a raise, as much as most (small) business owners would like to. Especially newly established restaurants, paying off business loans takes a big chunk of the revenue.
But hypothetically, what would you call a situation where 20 companies would all be willing to pay salaries of $1 million/year to fill 10,000 open positions that required 5 years of training, but there are only 5,000 people who have that training? Would that be a "labor shortage"?
It seems your solution works for companies willing to pay more to poach from other companies, but might not work in situations where all of them need more skilled labor now.
Also, the $1M/year illustrates a point...why not $10 million or $100 million/year? At some point, the salaries are indeed "high enough" but the skills still just aren't available to hire.
But the incentive to develop the skills should sort this out, no?
There is absolutely no scenario in which you could convince me to train as e.g. an underwater welder, no matter how much cash you’re offering.
So I created a hypothetical situation to illustrate what, to me, is a clear example of a temporary labor shortage. As you say, "the incentive to develop the skills should sort this out" ... and I'd say that's true, but until it gets sorted out, the situation can reasonably be described as a "labor shortage".
That's fair. I wasn't thinking about the types of skills that take years to develop. I was thinking more along the lines of re-training in the sense that I can take somebody that's got a solid base of tangentially related skills and get them up to speed quickly.
Because people have to a) take the years to learn/develop those skills, and will only do so if b) they know those jobs are still going to be around for a while after that.
Also in the real world the wages are sticky enough that they take time to adjust, and then it takes time for people to realize that X field is becoming well paid and then start pursuing it, so realistically the 5 year period is more like 7 to 10. Plus as long as the industry is growing/expanding, demand can continue to outstrip supply due to that stickiness.
Even rapid moving stuff like AI has bee illustrative of this. The AI leaders are all primarily poaching, and wages are astronomical. This is undoubtedly fueling a massive number of people to study/specialize in AI, but it takes years (maybe even a decade) to complete that path (depending on your starting point).
So, in the automotive industry they've been paying too little to attract people. Meaning they now have a shortage. That's still on them.
Sounds to me like they made some really nice profits for a couple of years and are now feeling the pain of that.
Funny that you mention AI where people are saying there's no need for Juniors anymore. Exactly the same, you'll make some money now and will then likely have to pay for that later.
If enough money is on the table people can skill up fast.
When GM realized they needed more mechanical engineers than existed, they built a whole university. These days, capital just whines. If you can spend $100 BILLION on data centers, you have the budget to stand up a proper school.
This is an excellent point. Georgia Tech, a top 10 computer science university, has an annual budget of $2.7 billion (2024) for the entire university to educate an enrollment of 53,000 students. Really puts it into perspective; this is 1% of Google's annual expenses.
That is a good point. Odd that our reactions, including my own given that I think the AI data center boom is pretty nuts, to that much being spent on data centers is "not surprising" while a company standing up a school sounds like something from science fiction.
I'm guessing we see a lot more of the latter than the former. Cutting edge knowledge industries might be an outlier here, but certainly for anything related to "factory work", it's probably true.
"would like to" is usually "can justify, financially". Most companies don't have a bunch of extra money laying around.
> When stated that way you can see that there are several levers to pull, the most obvious being compensation.
I know the way you mean that (companies pay more) and that's an option that does happen but it also goes the other way, employees can accept less (unless minimum wage makes it illegal for people to accept work).
Ford's profit margin was 1.7%. Lots of innovative/productive American companies since 1970 for workers to aspire to = the enterprise can't continue.
By framing it as a shortage of labor rather than a shorting of those looking to pay for labor, the employers hope to encourage more labor to flood the market [1] and lower prices further. This is a continuation of how we've gotten to the current predicament with most jobs being de-skilled commodities that don't pay enough to support their workers.
[0] another insidious framing is that by assuming instantaneous response, this downplays the importance of causality. But in the real world markets are not supercomputational.
[1] both private individuals choosing an educational path, and by government policy
> is totally represented by a shortage of qualified people for the given compensation.
Sounds like "I want to pay X, there's not enough willing to work for X, therefore there is a labor shortage." I know plenty of people who only want to pay $30 an hour for web development work. It might feel like a labor shortage to these people since they can't find many people willing to work for that wage, but in reality where the price they've chosen lands on the supply/demand curve there is almost no supply, but if they increased the wage, amazingly supply goes up too. If 30 seems high enough, imagine $5 an hour instead of $30. The actual number doesn't matter, it's where it falls on the spectrum that is relevant for this example.
If by "given compensation" you meant "market rate" then I think we're largely in agreement.
It can however occur that a company requires skill x, cannot find a person for this position, and HR still refuses to increase salary for this position.
There is a mismatch in supply & demand of compensation. Not position.
It would make sense to say something like, "There is a shortage of skilled workers willing to work for $1 per hour", and no-one would be likely to argue with that - there certainly is a terrible shortage of such workers! But that makes it clear that the problem is the compensation, not the available workers.
If you just say "There is a shortage of skilled workers" without that context, it becomes a incomplete statement from an economics perspective, and the GP is essentially objecting to that and pointing out that once you take the necessary context into account, the problem is not some sort of more general shortage of workers.