I’ve been trying to coach my partner (who works in retail) that companies could hire more workers tomorrow if they wanted to participate competitively in the labor market. She’s constantly stressed at work to the point of it physically affecting her wellbeing because her store is under staffed. It’s not some act of god that the store is not staffed. People didn't just disappear. It’s on her company and its management to create a successful business. It’s not on her to go the extra mile and literally harm herself to keep the store running. It’s really hard to convince people stand up for themselves when they’re used to being exploited by their employer over and over (in different ways) their entire career.

Maybe I'm repeating what you've already said, but it is really harder to stand up for yourself when you're used to being exploited, and your employer is likely to take your very reasonable boundaries as contempt when they are accustomed to exploiting you.

We really need to empower all kinds of front-line workers to enforce reasonable boundaries with both customers and management.

Is it communism where workers rule, or are there any other - unknown until now - means to ensure rights for unprivileged?

Not OP but the fundamental problem is workers not having enough power to ensure good working conditions. There are lots of ways they can get more power - labor shortages, unions, workplace democracy, regulations (kinda) - but you gotta fix the problem, not the symptoms of it. If managers are scared of pushing their workers too hard because they could be voted out, managers will get a lot more reasonable.

I'd propose a somewhat opposite explanation: worker shortage is an illusion created by a sort of accounting which decided to keep positions open and not fill them, even when qualified candidates come.

So, not only there is no space ship shortage :) there is actually much bigger worker shortage, as I keep a billion positions open (I want slaves, of all kinds, especially with Wall Street experience) and can't fill them (I don't bother to try).

What does it buy you, as employer, to whine about made-up worker shortages?

Employees have to temporarily take on extra work while managers promise that the open headcount for the senior dev who just left will be filled as quickly as possible. In fact, you should refer your friends! (who will all be promptly rejected)

You can tell your staff that you're trying to hire more people but it's hard, and if they can just put in the extra effort now it'll be easier in the future. Meanwhile, you get to save paying for an extra person and get more from your staff, so profits go up.

For one it lets them lobby to cut unemployment benefits and to incidentally cut taxes, which many business also lobby to avoid.

It’s a free rider problem of profitable corporations on labor of society.

Employers keep doors open for really stellar candidates - they keep interviewing - and if such a candidate comes, a position can be created, with overall goal of improving quality of employees. However the pool of extraordinary candidates is shallow, so the stable state is "positions are supposedly opened - interviewing happens - nobody get hired", with rare exceptions. This skews the statistics - everybody reports "hiring and can't find (exceptional) candidates", but workers in fact can't find a job for a long time.

It's not whining, it's a strategy, when interviewing costs relatively little. Even startups spend weeks of interviewing for a single candidate, because prevailing opinion is that it's more costly to hire a subpar employee than to do those interview rounds, even in a jurisdiction where laws allow firing with relative ease.

Believe it or not, this has become a political issue where conservative media is trying to spin this as people being too lazy to work, or welfare being too good. This is being called "the war on work" by conservative media [0]. The goal is to get popular support to weaken an already laughable welfare situation in the US so that workers have no choice but to go to work at terrible wages/benefits/conditions. This is a shared goal of conservatives and business owners.

This also further divides people because of the consistent use of the "Welfare Queen" [1] stereotype by conservatives to vilify people on welfare.

0 - https://reason.com/2021/06/01/the-bipartisan-war-on-work/

1 - https://en.wikipedia.org/wiki/Welfare_queen#In_political_dis...

Easier lobbying for increased immigration, H-1B visas, and other "necessary" sources of (easily exploited) labour to avoid rising wages.

Gov assistance

Possibly in some countries increased education spending. Thus in future increasing labour supply. And complaining is pretty cheap...

How is that an opposite explanation?

And lower cost of living. Can't work in a place if you can't pay the cost of living there.

And the other side is to raise supply by making immigration easier. Maybe the pandemic is a good excuse to not consider this right now (I don't think it is, but it's an argument I'm at least willing to listen to), but there are a lot of people willing to work that get turned away at the border.

What do we do for the businesses that cannot support a sudden increase in labor costs?

Businesses have no right to exist. If you can't pay the prevailing wage, then you don't belong in business.

I know that sounds harsh but that's the reality that workers live with every day. Can't pay the prevailing rent? You have to sleep in the streets. Can't pay for medical insurance? You get to die from a treatable disease. Why should there be more consideration for businesses than there is for human beings?

Nobody is claiming that businesses have a right to exist. Workers need jobs so that they don't end on the street and die. The concern is viable job opportunities disappearing and not being replaced. Businesses closing is an important subject to monitor because nobody wants to live in a failed economy where most of the population is unemployed and starving.

It seems like a stretch to predict that workers will end up destitute because of wages being too high.

As some businesses go out of business due to wages, that will put downward pressure on wages and keep things affordable for the remaining businesses.

>As some businesses go out of business due to wages, that will put downward pressure on wages and keep things affordable for the remaining businesses.

Not necessarily. 1) there can be regulatory floors on wages. Half the folks in this thread are calling for higher minimum wage. 2) if cost of living outpaces wages, there may not viable business model at all for low wage employers. 3) it may be the case that in some markets working at all lowers the effective income due to welfare cliffs.

> If you can't pay the prevailing wage, then you don't belong in business.

They may be able to pay an increased wage when the rest of the economy catches. So it may be optimal for the economy as a whole to support businesses temporarily.

That's fine. I'm not against temporary subsidies, especially during particularly weird times. But I am frustrated by how the same people who regularly preach about how we need to let the free market work are now mewling about the wage market being too hot.

... Innovate?

https://cafexapp.com/

https://misorobotics.com/

Well, right now companies have to compete with government benefits in many states. Benefits that exceed the free market wage by a significant margin in most cases.

Why would companies raise wages now when they can wait a few months to see if the situation changes?

People seem upset by this, but if you have a free market economy, you should anticipate that actors will work in their own best interest.

Changing regulations around compensation will be much more effective versus hoping that a company will act on a specific moral principle.

It's possible that we're simply in a new world with less and more expensive stuff to buy than there was in 2019. It's still an interesting question how that came to be and whether it will last, which is what's actually explored in TFA. There is no call for subsidies.

Fine, there is a shortage of cheap/affordable labor. These corps don't want wagyu...they want chicken fingers. They can't afford wagyu. Wagyu wouldn't even fit the occasion! They're not hosting a dinner party man; they're drunk in an Uber on the way home from the club.

I think you got a little lost in that analogy...

Raising wages doesn’t create more workers, though. It will just convince them to leave other jobs for the higher paid alternatives. This creates new job openings that still need to be backfilled.

I don’t think it’s obvious that large numbers of people are choosing to stay home and earn $0/hour instead of getting a job working $10/hour because they really wanted $15/hour. The worker shortage is a real phenomenon of more jobs existing than people in the workforce.

On the other hand, raising wages would produce inflationary pressure on everything from housing prices to food prices, which would force more people to get jobs just to survive. Not exactly what you meant, I know.

> Raising wages doesn’t create more workers, though.

Of course it does. My wife doesn't work because there's nothing that particularly motivates her to work rather than doing her hobbies. If you offered her more money, it might motivate her to re-enter the work force.

And if you can get 100k without a degree people who would be in college will be in the work force instead.

Also, there’s less demand to buy labor for $20/hr than to buy it for $10/hr. So, all else being equal, fewer companies will demand workers if they’re more expensive, which will also reduce the deficit.

That’s the theory at least.

If I follow you maximum demand to buy labor is at $0/hr.

But if don't pay labor, no one is going to buy your product at the end of the day. If you pay more for labour, that's more money to spend on product and services.

There's an optimum somewhere between the two.

Presenting only one side is a polical statement.

Always makes me wonder when people say that about jobs in service and food sector. Isn't those people exactly the ones that spend largest part of their income on those services? So if they earned more they would be first one to spend more... And labour isn't that high percentage of costs anyway...

Labor is the highest percentage of costs in service industries. Hence the incentive to keep labor costs down.

Taking your scenario a bit further all, pay is limited by productivity. As wages rise, the least productive uses of time won't be able to keep up and will either fall out of the economy entirely, find a way to improve productivity, find a workforce that they did not consider previously or find consumers who are willing to pay more.

I don't really see how any of this is a bad thing. This has to happen from time to time for the economy to remain efficient. This is the phase in the cycle where the capital owners take their lumps and workers make big career making moves.

Are capital owners suffering currently or recently? I don’t see a ton of evidence for that and if I turn on CNBC or open up my brokerage and 401(k) statements, I see some evidence to the contrary.

I suspect they will be relatively soon, although I never said suffering, just a few lumps. For example I think Amazon is going to have some tough times in regards to workers over the next few years. Similarly, public sentiment is in a place where I can see legislation happening that is unfriendly to capitol. The current ruling party is talking about a new deal fairly often, depending if that pans out over the next few years and what specifically that entails that could hurt a bit.

If you zoom in a little closer you can see lots of little victories happening all the time in the boarder economy. Lots of workers moving into better positions for more pay and leaving behind employers who can only find more expensive and less able replacements, if any at all. My personal observation is workers in service industry jobs seem more casual than a year and a half ago, less hurried, perhaps less fearful of losing a job than can be replaced in a few hours.

This isn't really how supply and demand work.

If I create a job that pays $100,000 per hour for making me a coffee whenever I ask, I assure you that plenty of people will come off the sidelines and apply for that job.

> Raising wages doesn’t create more workers, though. It will just convince them to leave other jobs for the higher paid alternatives. This creates new job openings that still need to be backfilled.

Others have correctly pointed out that the supply curve is not flat. But even if it were, well, economics is about the allocation of scarce resources that have alternate uses (Thomas Sowell's definition). If people are scarce, and they go where they produce the most value, and places where they would produce less value don't get filled, is that a problem? Isn't that exactly what you would want to happen?