The alleged 'Labor Shortage', how real is it?

[Theodarzna]

Last Friday's Non-Farm Payrolls report came in weak, and immediately that started a debate about whether the expansion of Unemployment Insurance was holding back the pace of hiring in a significant way.

The evidence doesn't seem to be a slam dunk either way. There's certainly a lot of anecdotal evidence that all kinds of retailers, restaurants, hotels and other parts of the service economy are having a hard time hiring. That we know.

On the other hand, Leisure & Hospitality Employment actually accounted for more than all of the jobs gained in the month, with the sector adding over 330K people. Other sectors, on net, lost jobs. So that doesn't scream tight labor markets caused by UI.

On the flipside, this sector bore the brunt of the job losses. And there's still a big hole to climb out of relative to pre-crisis levels. So you could make the argument that, given the pace of reopening, we would be seeing much faster job growth in the absence of the UI expansion.

It's also a possibility that there are other factors constraining supply besides UI, such as availability of childcare and the ongoing hesitancy to return to workplaces amid a virus.

Regardless of what's going on, the whole debate is very revealing. It's obvious that many people (businesses owners, but also economists and general observers of the world) just take it for granted that there's always going to be a virtually unlimited supply of cheap labor. Just like people assume that when you turn a faucet water will come out, people assume that if a restaurant or a store puts up a Help Wanted sign, they will be inundated with applications. When a tech company is looking for an engineer we assume they're going to have to fight tooth and nail to fill the position. People don't make that assumption when a restaurant is looking for waiters.

Acknowledging this reality precedes the whole UI discussion. Alex Press at Jacobin has a report on the litany of allegations of labor law violations against Chipotle in New York City and elsewhere. Among the allegations is that the company didn't comply with laws regarding predictable worker schedules. Even if you take a completely laissez-faire stance towards labor, and believe that any employment contract entered into is voluntary, that doesn't change the fact that numerous modern business models are predicated on there being a pool of precarious workers with minimal bargaining power. Whether it's fast food, gig-workers, e-commerce warehouses, their existence is assumed.

So for the first time in awhile -- whether it's due to UI or not -- we might be getting a glimpse of what an economy looks like where that can't be taken for granted, and businesses actually have to scramble to find labor, or in some cases maybe it isn't available at all.

(source)

Today's kvetching about the 'Labor Shortage' is in my opinion simply a business culture that has long assumed as a birthright and an entitlement that there will be a massive reserve army of surplus labor, that there will be simply an endless stream of desperate, precarious and extremely vulnerable people to make compete in a crucible of wage depressing blood sports for jobs. Right now, for many reasons, the world of business is having to deal with market conditions that are not favorable to that sort of assumption and it is driving them up the wall. Thus the demand for legislative change; though in doing so they have admitted that it is their opinion that they have a right to a tight, precarious and employer friendly labor market. I think they should never have that personally.

[Endus]

Depends on what you mean.

Is there a shortage of people willing to risk their lives for shitty wages and benefits that still leave them in poverty? No.

Is there a shortage of people who could and would work if compensation was sufficient? Nope.

Literally all that happened during this pandemic is that government support was boosted to the point that duress was off the table as a driver of the labor market, to a large degree. Where before, it was one of the single most prominent drivers, at lower income levels. Any business complaining here is revealing that their business model is predicated on exploiting the suffering and hardship of those who have no other options. They're wage slavers, in short. Fuck 'em.

[Belize]

"Labor Shortage" is a myth invented by corporations to shift the blame away from them paying slave-wages.

The covid relief UI finally woke Americans up to the fact that they're better off not working instead of killing themselves so that the top can reap all of the profits. Why work, slave away at 3 jobs and be poor, when you can not work, enjoy the little you have and be equally poor?

[Draco-Onis]

There is no labor shortage just proof that we need to increase the minimum wage and provide free child care. The people bitching don't want workers but slaves.

[Howel]

Technically there is a labour shortage, anytime there is job that can't be filled by a qualified person, at the behest of the employers demand. That last part is where the current problem lies, meaning it is a labour shortage, with a fairly easy solution on the employers side of the equation.

[PC2]

I think there is always a labor shortage that is caused by chronic under-population. Is the cost of things close to zero yet? Is there a limit to how much useful tasks people can do to create more value? No of course not, there is always more stuff to do and cost/prices to lower.

[Theodarzna]

There is no labor shortage just proof that we need to increase the minimum wage and provide free child care. The people bitching don't want workers but slaves.

I like the idea of just giving people a big stipend check every month either for childcare or simply just "hey, you are staying home to raise your own kid" kinda deal. Basically I don't think the State should be ensuring that businesses have the a massive reserve army of surplus labor to depress wages forever.

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"Labor Shortage" is a myth invented by corporations to shift the blame away from them paying slave-wages.

The covid relief UI finally woke Americans up to the fact that they're better off not working instead of killing themselves so that the top can reap all of the profits. Why work, slave away at 3 jobs and be poor, when you can not work, enjoy the little you have and be equally poor?

Yeah, it all just seems like the wailing of slavers who had gotten comfy and cocky over decades of having all the power. Word is in some areas these app outfits like Uber and shit have begun to struggle because who would be a gig-slave for those prices. And all I can say is get wrecked to these business outfits.

[Twdft]

Literally all that happened during this pandemic is that government support was boosted to the point that duress was off the table as a driver of the labor market, to a large degree.

My wet dream is that as a consequence of this pandemic we get UBI in the long run. For me UBI is the necessary next step for mankinds progress.

[Kokolums]

They're wage slavers, in short. Fuck 'em.

Stop it. No-one is forced to work a job that's pays very poorly. Stop using slave as a clickbait term.

[Twdft]

Stop it. No-one is forced to work a job that's pays very poorly. Stop using slave as a clickbait term.

Yeah, you have the option to starve.

[Edge-]

Stop it. No-one is forced to work a job that's pays very poorly. Stop using slave as a clickbait term.

What alternative is there? Starve? Hope you don't live in a state that requires you to "actively find work" if you're on social safety nets? Hope your applications you're required to make are rejected so you don't have to work for peanuts?

The glory of the pandemic is it's shown what happens when potential employees and employers are on more equal negotiating footing when it comes to labor, and potential employees don't need employers the same way they used it: And consequently, they're not taking the shitty jobs they were forced to accept because there were no alternatives like extended/expanded unemployment benefits.

[akris15]

What alternative is there? Starve? Hope you don't live in a state that requires you to "actively find work" if you're on social safety nets? Hope your applications you're required to make are rejected so you don't have to work for peanuts?

The glory of the pandemic is it's shown what happens when potential employees and employers are on more equal negotiating footing when it comes to labor, and potential employees don't need employers the same way they used it: And consequently, they're not taking the shitty jobs they were forced to accept because there were no alternatives like extended/expanded unemployment benefits.

Sadly one of the good things to come out of the pandemic is people are finally starting to realize there can be something better out there. As Americans we basically stagnated for 40 years when it came to businesses leveraging off the government to pretty much private all the profits yet socializing all their overhead. From the lower classes realizing maybe they don't have to live for slaves wages that require government assistance to supplement their 40+ hour jobs to the middle class worker realizing they can still work 100% efficiently from home without having to waste 1-2 hours each day in commutes.

[Endus]

My wet dream is that as a consequence of this pandemic we get UBI in the long run. For me UBI is the necessary next step for mankinds progress.

Canada's been toying with the idea for decades, and conservatives keep shutting down tests of the system before they can produce results.

The pandemic, though, has been a pretty reasonable test-bed. Our economy's doing fine. As tragic as this has been, the one good thing is it's likely to bring about a basic income system nationally much sooner than if we hadn't suffered this.

Stop it. No-one is forced to work a job that's pays very poorly. Stop using slave as a clickbait term.

I will not accept your tone-policing nonsense to try and shame me away from using the appropriate and accurate language to describe the status quo.

People are regularly forced to work jobs they do not want to work. By the need to feed themselves, to keep a roof over their heads, to provide for their children, to support family who need it. That's the definition of duress. And exploiting duress to ensure that workers have little to no choice is a form of slavery.

It's not chattel slavery, but slavery has many forms. And wage slavery is a recognized, defined term, and I am using it 100% appropriately. You just don't like it, because it points out the exploitative and abusive nature of the capitalist system. Well, tough nuts. It is what it is, and I'm not going to let you shame me away from describing it this way.

[Felya]

Labor shortage is the bourgeoisie blaming the proletariat, for their jobs not being worth it.

As in, everyone complaining that people choose to take shit jobs without corporations forcing them, kinda have to embrace this “shortage”.

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Stop it. No-one is forced to work a job that's pays very poorly. Stop using slave as a clickbait term.

This is funny... You sure this is an appropriate thing to say, in a thread about labor shortage? Wouldn’t the appropriate response be about paying more?

[Zaktar]

Basically yes, there does appear to be fewer people working if I look at the labor force participation rate: https://tradingeconomics.com/united-...icipation-rate

So sure, it's real. There is a shortage compared to where we were 1.5 years ago. Is it a bad thing that there is a "shortage"? Only if you're a greedy business owner. Personally I'd be pretty excited if we held at where we were or even kept decreasing it. Looking at the history we didn't firmly cross into 60%+ until around the 70s and somehow our economy survived before that. Maybe we could *gasp* go back to a world where only one parent in a family had to earn a wage. Pipe dream, of course.

The conservatives I know want to blame the government assistance, but the stats don't really tell that story. The drop happened in early 2020, before anyone got a stimulus check, and the participation rate has only increased as more payments have been sent out.

[Calfredd]

This is funny... You sure this is an appropriate thing to say, in a thread about labor shortage? Wouldn’t the appropriate response be about paying more?

Think he's still bummed he hasn't got his second Civil War yet.

[uuuhname]

Sucks we have a president that wants to side with these companies that made record profits during a pandemic. so much for being "essential" beyond how "essential" these workers are to the bottom line.

[Forogil]

This is funny... You sure this is an appropriate thing to say, in a thread about labor shortage? Wouldn’t the appropriate response be about paying more?

Yes, that's one of the solutions to labor shortage, and a pretty good one.

It works because the employee can switch to that employer paying more, since they are not slaves.

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Basically yes, there does appear to be fewer people working if I look at the labor force participation rate: https://tradingeconomics.com/united-...icipation-rate

That's not what the graph says.

The graph says that a smaller percentage is participating in the labor force - not a smaller number. Since the US population is growing it seems likely that the labor force has increased. Historically the largest change was that women began participating.

The decreasing rate is another issue, but it depends on the cause: if people retire early that's fine, if people study it's between ok and perfect, if it is caused by the opiod crisis it's less good. And when employers talk about labor shortage they rarely want to hire the ones that don't even bother to search employment; so I'm not sure if this is relevant.

[kaid]

What alternative is there? Starve? Hope you don't live in a state that requires you to "actively find work" if you're on social safety nets? Hope your applications you're required to make are rejected so you don't have to work for peanuts?

The glory of the pandemic is it's shown what happens when potential employees and employers are on more equal negotiating footing when it comes to labor, and potential employees don't need employers the same way they used it: And consequently, they're not taking the shitty jobs they were forced to accept because there were no alternatives like extended/expanded unemployment benefits.

The work search stuff I don't think is that big of a deal. Just apply for stuff that is high salary. As long as you get confirmation you sent the resume thats generally enough to satisfy the requirement. If you don't get it no big deal if you do get it well then you have a chance at a higher paying job. I honestly think thats a bit of whats happening right now. People looking for jobs now have the breathing room to apply for higher jobs they may qualify for and not just have to take whatever shit job says yes first.

[Zaktar]

Yes, that's one of the solutions to labor shortage, and a pretty good one.

It works because the employee can switch to that employer paying more, since they are not slaves.

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That's not what the graph says.

The graph says that a smaller percentage is participating in the labor force - not a smaller number. Since the US population is growing it seems likely that the labor force has increased. Historically the largest change was that women began participating.

The decreasing rate is another issue, but it depends on the cause: if people retire early that's fine, if people study it's between ok and perfect, if it is caused by the opiod crisis it's less good. And when employers talk about labor shortage they rarely want to hire the ones that don't even bother to search employment; so I'm not sure if this is relevant.

The graph shows exactly that, unless you think the US has grown by ~2%+ in the past 1.5 years, which it hasn't. If you were trying to point out for me that there are more people working than there were in the 1970s or something... wow, thank goodness you're here to explain these things.

Unemployment stats tell the same story by basically the same percentage - fewer people are working now than were pre-pandemic. Personally I like to look at both - just because a person doesn't factor into unemployment stats doesn't mean they aren't potential labor.