Employers are dropping quality standards for employees so fast that entire businesses have to shut down, because their employees leave and no one will work at a wage that makes the business profitable
This is too simplistic. The business model might not work at all at the higher labor rates. That can result in a change in the model (e.g., restaurants that no longer have table service, just take out) or it might result in the business closing entirely because it no longer is financially viable.
And those businesses have a right to exist because... ?
Note that I do draw a distinction between activities which produce high positive externalities (and hence whose revenues strongly underrepresent net social gain), and those which produce high negative externalities, often contributing net harm.
The first type of enterprise should be supported (tax breaks, subsidies, wage credits). The latter should be penalised (inverse). The pragmatics of money, power, and influence frequently invert that relationship, a tendency noted as far back as Adam Smith and before.
That said, it's not clear to me what types of activity are having the greatest hiring challenges, though in some cases (e.g., healthcare), I'd class them among the former.
And those businesses have a right to exist because... ?
Those businesses were working well enough in 2019 but were disproportionately affected by lock-downs that favored large retailers and chains. Amazon and WalMart had a great year but they don't treat their bottom tier workers any better than mom and pop stores do, in fact we subsidize Wal Mart's workers all the same. I'm tired of seeing small businesses blamed when they're the victims. Every time I have to wear a mask from the door of the restaurant to the table, or see an improvised "indoor-outdoor" shed structure built on the sidewalk I'm astounded at the sheer lunacy of it all. They've had to spend a much bigger chunk of their cash flow than some large corporation that can pick up the phone and get a few more billion in loans on a whim, and they have to compete for would-be workers getting "free" inflated money every week.
I hope it's clear that my "what right..." quip is alluding to similar attitutes addressed toward labour or residents. The point is that markets are an evolutionary system, that what was viable yesterday may not be viable tomorrow, and that the process of creative destruction moves forward.
Another view is that sometimes the forces of destruction are overly effective, and that some degree of intervention might be required.
What's curious is that the nature of the firms impacted by rising labour costs hasn't been clearly defined, and certainly wasn't at the top of this thread. I've commented in another thread about looking for solid data on this, and have found little. (See this here, specifically the 3rd comment down by myself: https://news.ycombinator.com/item?id=29235409) You're asserting that it's mom'n'pops rather than "large retailers and chains". I've seen a mix of reports suggesting both, though overall startlingly little clarity in news coverage.
I don't share your views on the apparent "lunacy" of masks at all.
To the extent that this may represent a new order and changing regime of public health and risk, an alternate narrative is that the previous structure had been built on a false presumption of risks and consequences, ignoring real ones, which, once those materialised, have changed the calculus and shown that what appeared to be a defensible, viable business and operational strategy was in fact not. It's not the world that's changed but our understanding of it. The risk was always present. It's just that now we're very much aware of it.
To the extent that this invalidates an ideologically-founded view of how "free markets" do or should operate and/or be regulated ... well, that's something which could also deserve more consideration.
> And those businesses have a right to exist because... ?
Because if USA doesn't start to get its exports up soon again after corona the entire economy will crash. And to do that USA needs to start to produce goods again at prices competitive with the rest of the world. And to do that businesses needs to produce those goods using workers at certain price points.
So ... the downside risk of crashing an entire national economy is a concern?
How was this priced-in or otherwise reflected in the earlier regime of valuation, management, or policy towards these firms? Does that downside risk represent an uncapitalised value of these ventures? Should that downside risk have been priced into goodwill, and hence, the access to financial or political capital of these businesses?
Because what you're stating, while having merits on the basis of rational argument and evidence, is not a business or market-based rationale. It has its foundations in some melange of national economic policy, security, and social obligation. Not economic bases.
> And those businesses have a right to exist because... ?
Strange line of reasoning. Generally it is a good thing for businesses to exist because they create value: employment and wages, tax revenue, goods and services that wouldn't otherwise exist, and so on. Not sure why you would want to be antagonistic towards businesses "existing".
This is an argument from consequence and independent of the business logic of the enterprise itself. That is: the "employment and wages, tax revenue, goods and services that wouldn't otherwise exist" are good of and by themselves regardless of the economic viability of the activity which supports them.
This is kind of ignoring that we don’t have high unemployment and our labor participation rate is nearly recovered as well.
So anyone who wants a job, basically has one. A company raising wages isn’t going to create new labor by hiring an unemployed person, they are going to move labor by hiring one of their competitors employees. This doesn’t reduce the markets labor shortage.
Unemployment is about where it was in 2017, which continued to drop all the way until 2020. So not as low as it was pre-pandemic, but objectively quite low, yes. Doesn't take away from your point.
well, maybe if the restaurant can't find any waiters, they'll close down and fire the cook. I think that's what the above comment meant with lost jobs.
This. If the business can't sustain itself because of labor costs it's not just those unfilled positions that suffer. If this happens too much you end up with demand for those ancillary jobs that folks are willing to do for market rate but can't find openings for.
I'd say it's the opposite. Surely the fact all our working men and women have job offers better than minimum wage, allowing them to better support their families, is something to be celebrated?
Not perfectly efficient, but generally pretty efficient, at least when there aren't major externalities unaccounted for.
Yeah, there might be some jobs like carbon capturer where the market is not set up in a way for you to get payed for your service despite its vast value to society.
However in the case of flipping burgers, if people aren't willing to spend enough on a burger to pay the salary of a burger flipper, then clearly the job of burger flipping is not worth doing.
We could argue hypotheticals. I prefer some concreteness.
I'm not finding much by way of specific sectors affected, though healthcare, education, transportation, and hospitality (foodservice, lodgings) are often mentioned.
US Department of Labour has a breakdown by state, showing proportionately more quits in less-populated states:
(What we want isn't a list of openings per classification, but deviation from normal levels of openings, adjusted for total classification size. Stats are ... complicated.)
One job category that could desperately use greater competene is business and economy journalism. The number of useless articles rehashing opinion and generalities on this topic is too damn high!
