Why labor shortages could be here to stay(axios.com)
axios.com
Why labor shortages could be here to stay
https://www.axios.com/2023/05/08/us-labor-shortage-older-workers
7 comments
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.
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.
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?
The validation of "shortage" is really simple. If every employer pays the same high-end market salary, is every open position filled?
If their business depended on it, I'm sure we would see no shortage of creative solutions like funding education or training needed to do the job. If the pool is too small, then the problem switches to growing the pool.
Then you have Congress artificially restraining the pool knowing full well there is a dire shortage.
https://www.openhealthpolicy.com/p/medical-residency-slots-c...
https://www.openhealthpolicy.com/p/medical-residency-slots-c...
That's funny. You now have the AMA lobbying against the caps they originally lobbied for.
Saw a great video about the Army doing this. Youth are too fat to qualify for the Army. The brass stopped complaining about it and started a “fat camp” to train recruits into shape.
https://youtu.be/P-n7wXqMorU
https://youtu.be/P-n7wXqMorU
Could it be a "companies don't have jobs that pay people well anymore" problem?
Investors demand forever increasing returns.
So do executives, and they continue to do so until they can no longer find the skilled labor needed for the company to function.
I know more than a few IT people who have early retired to build a farm.
They were consistently getting low-balled, without any offsets against high inflation, and they create and maintain the automation needed to lower/remove other job requirements.
Worse, just keeping up with certifications that were not based upon knowledge or skill but marketed as qualifications (fraudulently) presented additional drain.
The problem with concentrating power of any kind is that the people leading fail to notice important changes and continue business as usual. That's just not going to cut it anymore when executive pay has balooned well above 2,000% what people on the ground make.
The most important thing for any business is trust.
Trust that the product is worth it and won't be defective, trust that the employees working there will have an equitable share in the profit of their own labor and as a result a better future.
When that trust is lost, people with options use those other options. Goodwill in a workforce is incredibly important, and quite a large number of business people just don't get that and treat their workers as disposable.
I know more than a few IT people who have early retired to build a farm.
They were consistently getting low-balled, without any offsets against high inflation, and they create and maintain the automation needed to lower/remove other job requirements.
Worse, just keeping up with certifications that were not based upon knowledge or skill but marketed as qualifications (fraudulently) presented additional drain.
The problem with concentrating power of any kind is that the people leading fail to notice important changes and continue business as usual. That's just not going to cut it anymore when executive pay has balooned well above 2,000% what people on the ground make.
The most important thing for any business is trust.
Trust that the product is worth it and won't be defective, trust that the employees working there will have an equitable share in the profit of their own labor and as a result a better future.
When that trust is lost, people with options use those other options. Goodwill in a workforce is incredibly important, and quite a large number of business people just don't get that and treat their workers as disposable.
[deleted]
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.
[deleted]
Countries get old fast, here is a fertility rate of 1 (higher than South Korea):
Year 0: 100 newborns
Year 20: 100 twenties, 50 newborns
Year 40: 100 forties, 50 twenties, 25 newborns
Year 60: 100 sixties, 50 forties, 25 twenties, 12 newborns
Year 80: 50 sixties, 25 forties, 12 twenties, 6 newborns
Year 100: 25 sixties, 12 forties, 6 twenties, 3 newborns
Year 120: 12 sixties, 6 forties, 3 twenties, 1 newborn
We are nearing the midpoint of this in many parts of the world. Labor and GDP be gone.
Year 0: 100 newborns
Year 20: 100 twenties, 50 newborns
Year 40: 100 forties, 50 twenties, 25 newborns
Year 60: 100 sixties, 50 forties, 25 twenties, 12 newborns
Year 80: 50 sixties, 25 forties, 12 twenties, 6 newborns
Year 100: 25 sixties, 12 forties, 6 twenties, 3 newborns
Year 120: 12 sixties, 6 forties, 3 twenties, 1 newborn
We are nearing the midpoint of this in many parts of the world. Labor and GDP be gone.
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...
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.
But with a stablish pattern we can mostly maintain, with little adaptations along the way.
Actually you achieve a kind of financial stability in the above example if each older generation relinquishes their accumulated wealth to the younger generation as a 2 to 1 rate.
i.e. 2 Boomers give up their wealth to 1 Millennial for services rendered.
The "haves" just don't like how the supply and demand equation is swinging back in favor of the "have not but can still work".
As for the services rendered in return, well, supply side constraints dictate you settle for what's available ... that's all there is.
i.e. 2 Boomers give up their wealth to 1 Millennial for services rendered.
The "haves" just don't like how the supply and demand equation is swinging back in favor of the "have not but can still work".
As for the services rendered in return, well, supply side constraints dictate you settle for what's available ... that's all there is.
There is much less to buy or afford when there is so much competition for the small workforce providing services or labor.
Analyst Peter Zeihan has been pointing out for a while that the number of highly productive skilled workers in the labor pool is going to decline temporarily just due to demographics. The Baby Boom generation is rapidly retiring, the Millennials are still too young to reach peak productivity (on average for most industries), and Generation X in the middle is relatively small. This means a period of high inflation.
https://zeihan.com/demographics-part-3-the-xer-cut/
https://zeihan.com/demographics-part-3-the-xer-cut/
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.
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.
Several of my friends working in tech in their 30s rent apartments and have children. Having a house isn’t a requirement.
especially if the purchase price of the asset exceeds 21x annual rent (a rule of thumb about purchase prices).
Buy when annual price is < 19x annual rent. Rent otherwise. If you've already bought then just hold on the for the ride!
Buy when annual price is < 19x annual rent. Rent otherwise. If you've already bought then just hold on the for the ride!
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-...
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-...
When are they going to end the Lambo and Caviar shortages?
[deleted]
Immigration is the easy fix for this.
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.
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.
Incentivize fertility even more?
Perhaps free childcare (france), making parental healthcare free (conception to end of maternity leave for example), right to return to work laws for parents (finland iirc), tax breaks, and perhaps even an values/propaganda campaign?
I think there are economic solutions that could help, but I will admit i'm uncertain it can be accomplished in the american political environment. It would require some folks to accept there's a problem needing fixing (the kinds of conservatives who just want everything to stay the same), some folks would have to get off their high horse and realize they did a crap job of building society (boomers who think that rigging the game is a form of winning), some folks would have to accept that parenthood/mothering is a virtuous/higher calling (the kinds of liberals who think a woman who sacrifices motherhood for career is some how superior -- at least make them equal) ...
Perhaps free childcare (france), making parental healthcare free (conception to end of maternity leave for example), right to return to work laws for parents (finland iirc), tax breaks, and perhaps even an values/propaganda campaign?
I think there are economic solutions that could help, but I will admit i'm uncertain it can be accomplished in the american political environment. It would require some folks to accept there's a problem needing fixing (the kinds of conservatives who just want everything to stay the same), some folks would have to get off their high horse and realize they did a crap job of building society (boomers who think that rigging the game is a form of winning), some folks would have to accept that parenthood/mothering is a virtuous/higher calling (the kinds of liberals who think a woman who sacrifices motherhood for career is some how superior -- at least make them equal) ...
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...
https://en.m.wikipedia.org/wiki/List_of_sovereign_states_and...
...sorta like putting a penny in a fuse box.
i2cmaster(3)
Folks wanted boomers to get out of the way. Many of us have or will soon. This opens up positions at the top end and starts returning the savings to the general economy.
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.)
Dump on boomers if you’d like but we didn’t create social media. The pipes, yeah, but the kids and grandkids created the environment we live in. Boomer hackers made tools. Their descendants sold ads and collected data.
This is delusional. The boomers voted themselves entitlements that is going to practically break the system.
I am GenX and don't have social media but this is such standard Boomer thought. Just no idea how much you are fucking everyone over.
Niall Ferguson even mentions how the boomers have basically broken the generational social contract. Previous generations never borrowed everything they possibly could from their grandkids and the unborn.
Generation Me.
I am GenX and don't have social media but this is such standard Boomer thought. Just no idea how much you are fucking everyone over.
Niall Ferguson even mentions how the boomers have basically broken the generational social contract. Previous generations never borrowed everything they possibly could from their grandkids and the unborn.
Generation Me.
Not me mate, sorry. Spent 40+ years working for the man paying my taxes. Didn’t vote for the monied party, so lost a whole lot of elections. Given the view of techbros here we’re both posting in the wrong place.
Get involved. Vote. Change things (back).
Get involved. Vote. Change things (back).
Social Security, pensions, and traditional IRA/401k withdrawals are all taxable.
And all of these will be gone when Millennials retire. I'll retire when I die. Social Security? Gone. Pensions? Don't exist. 401k? Pennies. So, there's not going to be much there for us.
So weird.
[deleted]
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.
Work to live. I hope you have an enjoyable retirement :)
Throw wads of cash on the table. There will be no "shortage."