There is no US labor shortage. That's a myth

[Jilly_in_VA]

Robert Reich

When a public problem is wrongly described, the solutions posed often turn out to be irrelevant or inhumane.

A current example: America’s so-called “labor shortage”.

Jerome Powell, the Federal Reserve chair, says the United States has a “structural labor shortage” that’s unlikely to be resolved anytime soon.

The US Chamber of Commerce claims there are over 10 million job openings in the US for which employers can’t find workers.

Here’s the truth: there is no labor shortage.

There is, however, a shortage of jobs paying sufficient wages to attract workers to fill job openings.

For most Americans, real (inflation-adjusted) wages continue to drop. Wages have been increasing less than prices.

Those price increases include the costs of food, energy, rent, childcare, eldercare and transportation (cars, gas and public transit) – all big expenses for working people.

https://www.theguardian.com/commentisfree/2023/jan/15/there-is-no-us-labor-shortage-thats-a-myth

[ShazzieB]

13. Amen to all of this!

Many, if not most, employers want to pay employees as little as possible. They don't reveal the pittance they're willing to pay in job postings and do their best to avoid the subject of remuneration until they're ready to make someone an offer. At that point, they hope the prospective employee will be desperate enough to take whatever crumbs the company feels like throwing them and not savvy enough to try to negotiate. This works often enough that employers see no reason to change their tactics, and it sucks.

There are, of course, exceptions to this, but not enough of them to force the others to change their ways.

I'm not cynical about everything, but when it comes to how employers treat job seekers, I'm cynical as hell.

[Chainfire]

2. If you pay them, they will come.

[Rebl2]

7. Exactly

[patphil]

4. Federal Minimum wage is $7.25 per hour; hasn't changed in over 13 years.

About 1/2 the states have a minimum wage that is at, or below the Federal level.
Five states have no minimum wage!
The labor shortage is in those jobs that pay minimum wage, or less. No one wants to invest a weeks work for a salary that only pays part of their expenses. This is the case even in states with a minimum wage of $10 or more.
Obviously the bottom of the labor market doesn't provide enough income for people to live, so those jobs go begging.
We either have to pay employees more, or increase the number of people willing to take low end jobs.

https://www.dol.gov/agencies/whd/minimum-wage/state

Note: Childcare costs have skyrocketed, so a lot of families have one of the parents staying home to take care of the kids rather than pay a whole salary for childcare.

[Igel]

27. Few actually make the federal min. wage

https://www.bls.gov/opub/reports/minimum-wage/2021/home.htm

Most of those are starting wages--hang in there a few months and the wages go from extremely embarrassingly low to merely really embarrassingly low.

More worrisome are those who don't make minimum wage. Some get non-wage income, but some are farm workers or others without clear additional income.

[eppur_se_muova]

5. "People just don't want to work ..."

.... for crap wages, no benefits, and no job security, but that's all American corporations are offering.


Next time you hear someone say "people just don't want to work", tell them to FINISH THE DAMNED SENTENCE !!

[SharonAnn]

8. I do that. I say "They don't want to work for low wages, no benefits, and no job security".

[erronis]

12. Even Rob't Reich doesn't point out the other flaw in the "starve them" policy

Even raising wages to $15/hour (double the federal minimum) won't allow many working poor to even get to work. No car (and can't afford one at this rate), crummy or non-existent public transportation, no child-care/family-care assistance, incredible rising cost-of-living especially in the essentials (food, housing).

[Ferryboat]

6. I'm part of the problem,

Retire in February, worked demanding physical jobs all my life. Finishing a 25 year at WSF, which to be honest is pretty cushy. Could go longer but it time for a younger person to have my position. Make way for the future.

[ShazzieB]

14. I started to ask what WSF was, but I think I figured it out.

Washington State Ferries, was the first thing that came up on a Google search for WSF. Then I noticed your handle, and that clenched it. 😁

Glad to hear you found such a "cushy" place to land after years of hard, physical labor. Congratulations on your upcoming retirement!

[LisaM]

9. If they could get a handle on housing costs, it would help.

However, there is resistance to rent control, and combine that with the amount of reduced stock due to Airbnb and VRBO and other short term rentals, people simply can't afford to do those jobs and get by

[MichMan]

19. Don't people still need a place to live regardless ?

I always found it much more difficult to pay rent when I wasn't working compared to when I was.

[LisaM]

29. But they could do different jobs.

I would love to have been able to leave my stressful office job to work in retail, which I loved doing. Can't afford to. The rents in Seattle have quadrupled since I moved here.

[randr]

10. I have been a contractor for 50 years

Where I live and work there has been a continual and still growing demand for high end custom homes and structures. I have one friend who has worked for me the whole time and others I have employed for decades.
Over the last decade a dirth of new talent and skilled workers has been on the increase. A new generation of people are not interested in learning a trade or working at jobs that increase their skills to the level where they can earn compensation needed to live a comfortable life, support a family, and acquire property. We have had to rely on migrant labor, some of whom have gained a proper foothold with much struggle. I have hired more people in the past decade that just could not or would not apply themselves with what I have known as a work ethic. I am not the only person in my position to have this experience.

[bhikkhu]

17. I've been a mechanic for 37 years

There's always been a shortage, even when I started. You wanted to be a mechanic, you got your shot. And you could screw it up at one place and the next place would give you a try. This year I've had 5 trainees at work, and there were two more coming when I said that was just enough.

So from what I've seen the shortage is just the usual thing really, same as it ever was. Some jobs just aren't people's first choice. But I've seen more new guys on the job in the last years than I have in the last 30.

[MichMan]

20. Why do you think that is ?

Are newer workers just not interested in anything other than an office job? Do they think they are better than people employed in the building trades ?

Or is their expectation that they should walk into a job with little skills and receive top compensation for no reason other than they deserve it?

I have a lot of blue collar friends working in a variety of occupations, so I know there are a lot of opportunities out there if people are motivated.

[Justice matters.]

11. Although that is - in part - true, there IS a 10-million QUALIFIED jobs shortage.

Maybe it's not EXACTLY 10 million qualified jobs openings, but unqualified workers (due to the technologies or processes involved) cannot fill those positions because they are not qualified to occupy them.

Over 10,000 Baby-Boomers quit the jobs market to take their deserved retirement benefits daily. Do the math.

[ShazzieB]

15. This baby boomer quit the job market due to being kicked around after the 2008 economic crash.

I lost a long term job in late 2008, and for the next few years, I bounced from one temporary gig to another until I just couldn't take it anymore.

Jobs were scarce during those years, and when employers needed extra help, they preferred to use temp agencies to fill in whenever possible. It was a win‐win for them; so many people were unemployed during that time that they had all kinds of talent at their fingertips, talent that could be accessed whenever they wanted and tossed away with no warning whenever it was convenient for them.

When they did want to hire someone on a less temporary basis, there was such a surfeit of applicants that they could afford to be very picky. Why hire someone of my advanced age when they could take their pick from the hordes of younger candidates who weren't going to be looking to retire for decades?

The whole thing was incredibly demoralizing, and my self-esteem took a hit it still hasn't recovered from. When I got old enough to start collecting social security, I jumped at the chance. Yes, I knew I could get bigger payments if I waited longer, but after those years on the temp treadmill, working with zero job security and gaps between gigs with nothing coming in, the idea of a steady income I could count on, even a very small one, was irresistible.

I think a lot of employers got "spoiled" during those years of having an overabundance of ready labor whenever they felt like tapping it. Now that things have swung the other way, they're playing victim, not understanding why they can't keep getting away with the same shoddy tactics that worked for them during a MAJOR recession. Poor babies.

Sorry to hijack the thread with this long jeremiad. Once I got started, I just couldn't stop. Thanks for letting me vent.

[OldBaldy1701E]

18. This boomer has not worked in over eight years... not by choice.

But, I was basically removed from the workforce thanks to the destruction of the entire industry that I was in. Of course, it still exists in a new form, but it is not the same career that I entered into. And, I spent 43 years trying to make a go of it. I am still sure that this entire debacle would never have happened were it not for the insane level of capitalistic greed that permeates our entire society. Which makes this the fault of the employers/owners. But to read current M$N drivel, those poor millionaires and billionaires are having to actually pay something closer to a living wage and actually having to treat their workers like human beings as opposed to disposable objects that one tosses into the trash once its perceived usefulness has ended. How freaking horrible for them! To think that they might only make 5 billion this year instead of 9 billion is such a horror show for them!



Get mad at me if you wish, but our society sucks.

[MichMan]

21. Obviously it depends on your occupation

I worked in a technical support function in various manufacturing plants over my career.

I was downsized in late 2008 at the age of 51 and struggled for a year to find any type of employment. I agree it was pretty demoralizing.

After that, I found employment in my field and while the pay wasn't the greatest, it was steady full time work. It didn't take too many years however, before there were tons of recruiters blowing up my phone with job openings that continued well into my 60's. I ended up moving to a job closer to home that paid me about what I expected, so all was well.

I finally retired a year and a half ago, and still get inundated with recruiters calling about seeing my resume on line, that I haven't updated for nearly a decade.

[ShazzieB]

28. I was an office worker.

My last job was as an administrative assistant. People with general office skills were and are a dime a dozen.

[MichMan]

22. I spent the vast majority of my career working in manufacturing plants in the auto supply industry

Last edited Mon Jan 16, 2023, 11:16 AM - Edit history (1)

Some were with much bigger companies than others, but in all of them, you had to outbid your competitors in order to win parts contracts. It was a pretty cut throat business, and with car models being redesigned every few years, you had to constantly win new business to keep the plants running and people employed. Might get a contract for 3-4 years before the car was redesigned.

In nearly all cases, you had to outbid competitors in Mexico and China, and while customers would prefer to keep US production, the low bidders generally got it. Profit margins were pretty tight in many cases, and profitability depended on keeping the machines and equipment running as much as possible. Since that was dependent on which car models were hot sellers or not, it was never guaranteed. Of course, if a vehicle was being manufactured in Mexico, the likelihood of winning a contract over a Mexican supplier was pretty slim to begin with, but it could happen if you really sharpened your pencil.

The last few years was a struggle to find workers, and I'm sure paying substantially higher wages would help, but then you run a big risk of losing the next rounds of future bids to those Mexican and Chinese competitors, potentially causing the plant to close permanently for lack of business. The bigger sized suppliers have a lot more leverage, because they are much harder to replace, but the smaller sized ones don't have that power. Kind of between a rock and a hard place like they say. It isn't as simple as people say, like raising the price of a hamburger fifty cents or so. Manufacturers can buy a widget from anywhere in the world.

The last plant I worked in before retiring was in a rural area, and while the plant has been there over 50 plus years, a plant closing would be a tough blow to the community. The plant I worked in prior to that closed in 2010 due to the recession, and the building is still sitting there abandoned a dozen years later.

[Locrian]

23. yes - also inflation

Remember when JP Diamond or anyone corporate gov talks about "inflation" they mean higher wages ie cost to the business.
NOT consumer inflation. They like that since it drives people back to jobs.

"wage inflation" is what terrifies them.

[progree]

26. Labor force participation rate: 2000: 67.3%, now 62.3% and flat since Jan'22. Graph.

Last edited Mon Jan 16, 2023, 12:45 PM - Edit history (1)

Nationally, the labor force participation rate has been dwindling from a high point of about 67.3% in 2000 to 62.3% now (BLS's December report). (It was 62.2% in January 2022, so there hasn't been any significant progress in that all year).

Meanwhile the population of elderly needing more and more services grows.

Labor force participation rate: http://data.bls.gov/timeseries/LNS11300000

Labor force in thousands: http://data.bls.gov/timeseries/LNS11000000