Here's something I noticed when talking to or observing others when it comes down to this kind of thing.
When people are in unacceptable work situations, which almost always comes down to (at least seemingly) bad management, lack of respect and low wages, they tend to avoid the issue either by leaving and finding a better place or by trying to level up if they have the guts to change anything at all. Often they try and suck it up, which leads to all kind of issues down the line.
There is another way, which is negotiating and clearly stating one's goals. Workers tend to underestimate a couple of things: Their value, their ability to work out and improve a workplace situation, and often also the ability of their superiors to change perspective and collaborate on moving forward.
And it is understandable. We tend to get taught how to be good worker bees. Reading and writing, math, discipline, shallow/propagandized politics and skills that prepare for work.
But we aren't taught how to negotiate, question authority, organization (the real kind, not the following orders kind), collective bargaining, solving conflicts and compromising as equals etc. These are _essential_ life skills.
Good leaders respect you if you have these skills, they love to solve problems and improve situations. And it can have powerful long term effects on a workplace if you become active. Freedom and power come from realizing that you already have it.
>But we aren't taught how to negotiate, question authority, organization (the real kind, not the following orders kind)
From my experience the far majority of companies want the "following orders kind", or to put it differently: they want you to be flexible enough to be both the independent leader and the great follower when they desire, without any sign of rebellion.
For obvious reasons, this doesn't work. Most of these attributes have some semblance of correlation or causation which makes anyone fitting the above a unicorn. You continuously stamp out rebellion and any sign of independence in teens, you get meek adults who will follow orders and are afraid to take independent actions. Society can scratch its head all it wants, these are the kind of people it trained for.
>Workers tend to underestimate a couple of things: Their value, their ability to work out and improve a workplace situation
I tried this multiple times. It's difficult enough to change things together, now try it in an environment where you're essentially alone. Your fellow worker bees aren't revolting with you, they are far too comfortable and afraid to lose their comfort. Their risk/reward evaluation is screaming "no, don't do this, let them sink alone".
The above works when people learn different things and understand rebellion together does work and it works really damn well, which again, starts all the way at school.
> From my experience the far majority of companies want the "following orders kind", or to put it differently: they want you to be flexible enough to be both the independent leader and the great follower when they desire, without any sign of rebellion.
Traditional capitalist companies are not democracies, they're dictatorships, or plutocracies at best. It makes sense an authoritarian regime would want problem solvers but not challengers to the status quo. A cooperative would be the closest to a democratic company.
> There is another way, which is negotiating and clearly stating one's goals. Workers tend to underestimate a couple of things: Their value, their ability to work out and improve a workplace situation, and often also the ability of their superiors to change perspective and collaborate on moving forward.
Anecdata, but I’ve seen this backfire tremendously. My wife worked for a skilled nursing facility. They had 18 therapists (pt, ot, and st). 6 decided to stand up to management and demand a lighter case load, a 3% raise (hilariously low I know), and increased transparency from management. They all got put in pips for various “other issues” and eventually all of them were fired. These jobs aren’t that low paying either ($70-$100k / year), so it’s not like finding a new warehouse crew.
Eventually the place ended up downsizing and eventually merging with another facility. The rumor on the inside is that they never really recovered and saw more attrition across other parts of the organization.
I say this backfired because the employees ended up getting fired. Even though in the end the company ended up not doing well.
I guess my point is that never underestimate the stupidity of management. They will let their companies fail in order to not succumb to employee demands, regardless of how benign they might be.
"Workers tend to underestimate [...] the ability of their superiors to change perspective and collaborate on moving forward."
They do however underestimate the ability of their superior to manipulate them into thinking they have a clear understanding of what going forward means and that said superior will honor that agreement.
Concur. I've seen more than one company self-destruct, because they weren't able to address crucial people problems. This was caused by their management prioritizing their own comfort at all times...
Said people problems were there classics : unwillingess to retain key people ; salary inversion ; hanging on to toxic people ; etc.
> They had 18 therapists (pt, ot, and st). 6 decided to stand up to management and demand a lighter case load, a 3% raise (hilariously low I know), and increased transparency from management. They all got put in pips for various “other issues” and eventually all of them were fired.
The way to handle this without backfiring would have been to contact a union about organizing, and let them help with the organizing process. You'd need to get more than 6 people on board, and the employer would fight it, but the organizing employees would have had legal protections against retaliation during and after the process.
I understand this comment comes from a good place but it falls into the same bucket as "well they can just sue" for me.
As-in, sure, technically they could do all of that but some people just want to work and not take on a huge fight that they themselves may not survive. I'm very pro-union but organizing one sounds miserable and thankless. I want to create software, not herd cats and I assume most people feel the same way. I have huge respect for union organizers and would support them but it's not a simple thing.
These people wanted to do their therapist jobs and they asked for the bare minimum and it was rejected (and the were effectively fired for it), I think that tells you how management would react to a union-effort. You might have legal protection but legal protection doesn't put food on the table.
> I guess my point is that never underestimate the stupidity of management. They will let their companies fail in order to not succumb to employee demands, regardless of how benign they might be.
It seems like they exposed a major weakness. My hope is that your wife and her colleagues are better off now.
From a pure "what we've budgeted" standpoint you're likely correct. But that budget included paying their CEO several million in salary, and several more million in bonus structure. Not to mention other executives who were making relatively similar pay. This wasn't some big company either. They had 12 facilities in the state, and each maybe had 50 employees. So at the most, including corporate, they had just north of 600 employees.
For these small market healthcare-focused companies (not really hospitals, not really clinics) they're always barely making money. But it's not because they aren't bringing money in. It's because they're incredibly poorly managed. They're super top heavy, and they always pay frontline staff like shit. It's why we saw the incredible rise of the traveling nurse in the past 10 years (and especially during covid), where nurses could make 5x traveling than what they could with a typical FTE job.
You tell me why a facility would rather pay a traveling nurse the equivalent of $300k per year + fees to the placement company for 12 months instead of hiring an FTE at slightly above market rate, which is more like $100-$120k? It's because they have zero ability to make long term decisions and middle management is completely powerless. Managers in these types of business are 100% middle men. They have no autonomy to do anything. Even hiring and firing takes several layers of corporate oversight.
I largely agree that it sounds like these problems are business/management problems.
It seems that there is also a labor shortage for good managers.
If a business is already top heavy, how do you get better managers?
The traditional argument would be to pay more and get better talent.
This honestly seems like a hard problem to solve.
For speaking up and negotiation to work you need a reasonable person on the other side of the conversation, and not having that kind of person is one of the most common problems to begin with.
Sounds like those businesses aren't viable, and should fail.
In other words, if a business cannot be profitable _and_ pay it's staff a livable wage, then the answer is to make adjustments so it can do both, or close the business. Paying staff a non-livable wage, while perhaps making/retaining a profit, is still hard on the business (high turnover rate, constantly retraining new people, etc), and is nearly untenable for the staff (required to work multiple jobs, 1 paycheck away from not making rent, etc).
As a business owner, I know "close the business" sounds ludicrous to business owners, and isn't even on the table, but this so-called "labor shortage" is going to force things to go one way or the other.
Is there a case for an "unlivable wage" when a family member wants to add to the family budget, even though other family members (a spouse, or parents) provide the bulk of it but not exactly enough?
Clamping the lower bound of wages may put many of such people out of an opportunity to make some money. In other words, should a summer job for a teenager pay a livable wage?
This, of course, works best if the job is not taking 8 hours a day. I don't see why working multiple jobs, each of which takes a part of the day, should be considered bad; actually, my son worked this way for some time, which allowed him to pass a rough spot in job market in 2020-2021.
In a vacuum, the ability to pick up multiple jobs and do different things would be a net gain to individuals, yes. Plenty of people would like to do different things throughout the week rather than having to change jobs for a change of pace. This also assumes it's an opt-in, so if you like working on the same thing 40h a week, you can continue to do so.
Problem being, things today are indicating what is happening is not for the good of employees, but for the good of employers. Which brings with it a whole other slew of issues which disenfranchises the worker class. Which historically is a really bad idea if one's goal is to maintain a peaceful, functional society.
It's why the question of "should X be able to make a livable wage" is one which has to be answered very carefully, as this question is slowly slipping into the territory of "should people who spend most their lives doing what others want be able to afford living". That's how revolutions start.
> In other words, should a summer job for a teenager pay a livable wage?
Yes. Many teenagers of working age are head of household and shouldn’t have their wages undercut by the dependent children of others.
> I don't see why working multiple jobs, each of which takes a part of the day, should be considered bad
Because it makes life unnecessarily stressful. Transportation costs, typically borne by the worker, increase dramatically. It’s more efficient to work a single job, if possible.
If you want a 17 year-old lifeguard in San Francisco to be able to afford a mortgage San Francisco, you end up with no pools in San Francisco and unemployed teens.
It may be hard to believe, especially for the typical Californian, but there are other kinds of housing than single-family homes. It wasn’t so long ago that a single 17-year-old making minimum wage could afford to house themselves outside of a family unit.
I believe it. I think zoning and building codes are most of the problem. Allow 200 sqft apartments like you find in NYC and you will see a stark reduction in the working homeless.
But aren't 200 sq ft apartments banned because they are unlivably small? The guys who enacted that should take a look at Tokyo and Seoul, and maybe actually listen to the reasons of people who rent tiny apartments there.
They are objectively livable in a literal sense. But, yes I agree that some policy makers decided that they would rather have people homeless than in unpleasant living accommodations.
Studio apartments of that size (sometimes even smaller) are bought by university students in Norway all the time, sometimes for as much as $200.000. They can be quite comfortable.
Not sure how they’d be priced in SF, but to my intuition that seems out of working homelesss range. In cheaper cities though, definitely.
The efficiency of human labor in a lot of these industries hasn't increased enough to justify the full cost of the labor. There's next to no efficiency increase you can get out of a truck driver or a waiter. Getting all of these people into industries that do have a better human labor efficiency is going to be hard.
You make a claim that there's no way to pay them according to their value. But there's several ways I can say that this is not true. First, a waitress is often a little bit of a salesperson so yes, she can up her skills to be more valuable. Second, the food or the goods being transported can be more or less valuable. A trucker might haul packing peanuts vs. iPhones. Restaurants can be more expensive or have higher margins. Third, we know it's possible to pay people a living wage because almost every other developed countries does it.
>First, a waitress is often a little bit of a salesperson so yes, she can up her skills to be more valuable.
This is true on an individual level, but I don't believe that there has been much efficiency increase here that has permeated through the industry. There has been no shovel to digger moment that has improved the ability for most waitresses to do their work much more efficiently. I think it's going to happen with self-checkout though (you will still need someone to staff self-checkout).
>Third, we know it's possible to pay people a living wage because almost every other developed countries does it.
Spain has an unemployment rate of 15 percent. Its safe to assume that actual rate is higher than official rate. So no, "almost every other developed countries does it" is not true.
Also look up part timers in Japan, and the kind of capitalism there.
I'd pay good money if you or someone were to attempt an objective assessment of whether the next company I plan to work at "is a business run by balanced functional adults".
Do you have a strategy for paying your employees or are you planning on people working for you "for the exposure"?
Do you have a strategy of implementing feedback from these highly skilled workers that you have hired, or is your feedback loop pointed at a black hole?
Do you have high employee turnover?
Do you feel like as the boss, you are allowed to sexually harass your staff?
Conversations about labor are a weird area where people are both commodified and also simultaneously shamed for acting like a commodity.
Imagine opening up a shoe factory, finding out that the price of leather was too high to make a profit on leather shoes, and instead of reworking my business to match my expenses I instead demand that the leather be sold to me at a lower price. When the leather providers refuse, I go complain to a bunch of newspapers that nobody wants to sell leather anymore and that we're in a leather shortage.
If your business requires all of its supplies and inputs to be sold to you below market value, then you don't have a business, you have a charity.
Everyone would be able to make a profitable construction business if they got their lumber for free. Everyone could run a department store profitably if all of their inventory was given to them. But sustainable business is about learning how to build a product/service that generates more profit than the costs required to make it. If the initial costs are too high or it's a question of scaling, then that's what investments and/or subsidies are for. But either way, it's silly to try and shame suppliers (employees) for setting their own prices.
Be careful with that notion. There are more businesses that do make profit under reasonable conditions or can at least afford it and will win down the line. There are businesses who _think_ they can't afford it, but they might just be lacking imagination and long term thinking. Think of Henry Ford as an illustrative example of someone who had the imagination and holistic view, and thus improved working conditions.
> simply don't make a profit under reasonable conditions.
Profit is simply income minus expenses, accounting nonsense aside.
The problem is not that businesses cannot make a profit. Rather, its that we've build in worker exploitation into our economy. Our prices should be higher than they are.
When prices go up consumers substitute. Offshore labor is cheap. Why would consumers pay extra for domestic products instead of just buying cheap imported ones?
This is really a very complex problem and equation. There is also the question of "worker exploitation" in the sense of "is it reasonable to assume a McDonalds cashier should earn enough to support a family?".
In some, maybe even many, cases workers are likely underpaid. However, in many other cases, workers are paid relative to their overall value, but those same workers want to have a standard of living that is simply not practical with the job they hold.
I am unconvinced that this is the reason that businesses don't pay workers more.
Workers are usually paid according to their _replacement_ cost not the value they bring generally. In an ideal equilibrium, where the worker can push back against the employer equally, sure. However, that's seldom the case.
Businesses also push back harder by hiring _definitely_ exploited workers, e.g. in agriculture and meat packing, or by hiring contractors.
To be clear, I am not saying it is the reason for sure, just that there are a lot more factors to this than the direct wage.
Part of "lower wage taxes" would roll down to "less government support", which would theoretically roll down to "more people seeking gainful employment", which would affect the supply/demand curve of the labor pool, etc.
I mean, we've run these experiments. There's no need for "theoretically." You can compare outcomes in countries with more and fewer social programs. Spend a couple hours comparing healthcare outcomes, poverty rates, unhoused rates, etc across various first-world nations, compare that to tax rates and social program availability, and see if you can come to any conclusions.
I am not sure it is so easy to make direct comparisons to other countries. What country that has a similar population, economy, etc. are you referring to where increased social programs result in a net-better environment? Even more locally, is there an example of a state within the US where there are indicators of success in this regard?
I will say I have not studied this deeply, but I've also given it much more than just casual thought, so I am genuinely curious to know what your sample examples of successful countries are.
With high employment taxes and benefits an employee cannot pay for the work of another. That causes huge problems in industries like care or medicine where prices will explode. An interesting economic metric isn't just the level of prices, it is how many hours you have to work to get an hour of work from someone else for yourself.
Part of positive inflation metrics is that it was reinforced by cheaper electronics. But what about anything where human labor is involved that isn't outsourced to low wage countries?
This is not like a retort but more an addendum - Just like healthcare, 20$ flights and shitty food, EVERYONE around that individual or item is paying for the rest of the actual value (or the environment, aka our offspring).
Reasonable is subjective. I have seen a developer borderline lose their job because they didn’t like the terms and conditions of a library that management wanted to use on the app. Even after management confirmed they are ok with the terms.
Sometimes you do just need to accept decisions and move on. Or find a middle ground.
Not even that. It was some weird idea that the terms would expose the company to legal risk, despite the legal experts confirming its OK and them having no real financial stake in the company. Some people pick weird hills to die on. They absolutely see management as being evil and unreasonable over this despite anyone else looking at the situation seeing it as normal day to day business.
I would say if you have the proper social safety net, then yes. It gives you time to think about innovative new work, rather than shitty wage slave work.
No judgement here, and in fact I understand it's reasonable to believe others are unreasonable. But if you can overcome that fear, you can (sometimes) unlock great things.
> There is another way, which is negotiating and clearly stating one's goals.
I did this once back when working crap jobs. I knew I had leverage because the store was having issues hiring anyone to do the work so I utilize that leverage to try to negotiate a raise and control of my schedule.
Which I got… well sort of. The raise the the most pathetic I ever got, and I was told “that’s all the computer will let me give”.
Regardless though, I had successfully negotiated something, sadly it didn’t matter, despite slightly bumping my pay and gaining better control of my schedule, corporate came down with an idiotic merge and a plan to get rid of all full time employees that backfired, and they all left.
Suddenly, the manager begins to shift more and more responsibilities to us, to the point where I control what days I work but I am now working 12 hours nights because the only other people good at their job left.
After one night, I said fuck it and just abandoned the job, didn’t even give any notice, and I never felt particularly bad about it. Surprise, the genius moves pulled by corporate ended up pushing the company into bankruptcy.
There are two conflicting business cultures. One is genuine profit culture, and one is an imitation of profit culture which is really about hierarchy and status.
Most businesses are balanced somewhere between the two extremes, although I suspect in the US businesses tend more towards hierarchy.
The "labor shortage" is a symptom of a hierarchy culture that has become too rigid. Workers are supposed to know their place - which is at the bottom of the hierarchy - and are not supposed to expect a more equal power distribution.
The fact that some businesses would rather die than relax their grip on power differentials shows how dysfunctional and self-harming this culture is.
Anecdotally the only place I heard doing the opposite "consistently" is Japan, and I highly suspect these reports are still select blue moon cases. Cases where executives themselves took the hit to keep the ICs at their current level, or at the very least share the burden equally.
Everywhere else, I've heard both a near universal reluctance for executive types to take any kind of pay cut ("we can only go up"), and a near universal reluctance for anyone higher in the hierarchy to earn less than their subordinates, no matter how rare their skillset. Which also creates the massive bureaucracy problem where everyone wants to go into some form of management or pseudo-management, and no one is able to prove whether this was at all beneficial for the company as a whole.
I even had a personal experience where HR was describing a new career advancement strategy, confirmed developers were paid under market rate, but bluntly said "no, this doesn't mean we'll increase your salaries right away". I was more surprised people in the room didn't react with disgust at this obvious "haha we got you by the balls" move.
In Japan it's very, very important to maintain the appearance of such things.
What actually happened is more complicated. There are few traditions of a huge press expose.
The executive MIGHT get a pay cut. Or they might take a pay cut, but the company ALSO steers a fat discretionary contract to the CEO's brother in law, with a different last name.
Not a uniquely Japanese stitch up, but that's how it's done.
Or, they might be perfectly honest. And outside appearances are exactly what happened.
The tl;dr of doing business in Japan is, you NEVER know the full story. Unless a personal relationship clues you in. Personal relationships are E-V-E-R-Y-T-H-I-N-G. Particularly because everyone lives in Tokyo.
I have seen this occasionally work, but far more often not work. There can be several reasons for it to fail:
1) the supervisor is responding to their own bad work situation from above, and since they don't know how to do that, the bad supervising strategy is their adaptation to a bad situation.
2) the supervisor is just plain not good at being someone's boss, by temperament or aptitude, and they may know at some level that they're not good at it but don't appreciate their direct report telling them the specific ways in which they are not. However politely and respectfully it is put, if the supervisor knows they're not good at being a supervisor, then being told by the person they're supervising that the situation is not working, just makes them mad.
3) the supervisor believes that their direct reports need to be cowed in order to be productive, and they respond to any feedback of the sort you describe by taking it as a challenge which must be beaten down.
In fact, almost the only times I have seen management's attitude really change, is when they have too many people leave (although even then, sometimes they just aren't capable of managing well, and cannot seem to improve). Most often, leaving for a better job is the best way of communicating that the situation needs to improve.
In large organizations, obviously case (1) above is the most common, and in small organizations (2) and (3).
> There is another way, which is negotiating and clearly stating one's goals. Workers tend to underestimate a couple of things: Their value, their ability to work out and improve a workplace situation, and often also the ability of their superiors to change perspective and collaborate on moving forward.
Path of least resistance. Changing an organization and/or employee organization (union or otherwise) is essentially a full time job and I already have one of those. Why would I stay and fight what will almost certainly be a losing battle when I can just leave AND make more money?
I'm very pro-union and employee rights but I've tried to fight this fight before. It was draining, thankless, and ultimately unsuccessful. I wasted years "trying to change the company", I should have just moved on.
Often the person best suited to lead organizing employees is not an employee. What I mean by that is programming (or insert your profession here) and organizing people are two very different skillsets that not everyone has (I would go as far as to say few do).
There are a lot of companies right now letting people leave who asked for pay rises only to find that not only is it going to cost them 10k to hire someone new but that person will be 30% more than the old employee even asked for and will be starting from scratch.
I wish there was more data on the "from scratch" bit. I just cannot believe that companies are willing to let experienced devs who know your system and have proven that they can ship just walk out the door with all that value simply because you won't pay them more. It is a ubiquitous problem and my bosses have shared this view. My current firm is the only place that has proactively increased compensation, and guess what, the other ICs I started with six years ago are still with the team.
However, many companies will eat the cost, because once you improve one person's condition all the rest start asking for it as well. Some managers like sending the message that workers are disposable and will be disposed of if they make trouble.
I believe it. But for a lot of companies the standard playbook is everyone is replaceable and they probably wouldn't even consider meaningful change unless attrition hits a certain percent. They'd rather cut a new hire a fresh load of RSUs than refresh you to keep you from looking around.
Varies by company, but IME, bringing issues of pay and stuff up are often hit with the standard "we consider raises in November" or whatever arbitrary time period they've chosen. Then they're shocked when people leave.
I think I understand what you're saying but your example is somewhat nonsensical. Your first phrase indicates a person is in a bad job, your second phrase and description of the solution of the problem in the first phrase indicates a person hasn't accepted said job yet.
If you're in a bad job and can afford to leave, without knowing additional information, you probably should.
In all my experiences ranging from the trades (construction), investment banking, and software development, the overwhelming consensus as I have understood it, is that companies/managers/presidents/etc want you to be that good worker bee and not step out of line.
Good leaders generally respect you if you can show those skills you mentioned, in the context of the narrow band of their work.
A previous manager I had said the following (in regards to hiring lower-level management positions): "we love ex military folks because they're good at following orders and not taking an independent approach to a problem" i.e. they're drones in this respect.
Include more worker protections, something akin to what many European countries have done and I think we'd find ourselves one step further towards a more harmonious/happy society.
With all due respect, this is a quite naive viewpoint. I've been fired from multiple jobs from trying exactly the items you are suggesting. Sometimes, management just wants you to shut up and do the job, and not try to change anything.
> management just wants you to shut up and do the job, and not try to change anything.
Yeah I'd agree especially for example a company with constant short deadlines. Complaints about the short deadlines and making a big fuss about it is not going to work as those deadlines are imposed by someone with ultimate power in the org. In their mind you're just a piece of dirt under their shoe, someone who cranks the handle and complaints are not welcome.
If you're in an org where something like this is happening it's often best to move on to another job. Trying to make any sort of change in these orgs is like pissing in the wind.
They don't care and will often fire you as a trouble maker.
I'm not saying it always works. I'm saying it is possible, and definitely worth considering and even trying. You said you failed multiple times, would you do it again?
> There is another way, which is negotiating and clearly stating one's goals.
There is also the collective variant of this, which is _unionization_. It's hard to do, but still much easier than every one person in a workplace "uplifting" themselves, and possibly facing retribution or termination. The overall outcomes are more promising - again, on the whole.
Indeed, we aren't taught these self-administration and collective-self-administration (autogestion) skills. Paradoxically, we mostly have to teach ourselves that - at least collectively if not personally. When this happens, from my own personal experience, the rewards are quite significant - emotional and material :-)
I don’t buy this narrative, I’ve tried in orgs which relied heavily on me (as half of my tiny team quit) and it backfired. Then I was laughed at during interview asking for a certain salary. Then I got a much higher salary than what I asked for from… big surprise a startup whom made significantly less money than the other two mentioned.
I’ve seen this backfire in “less prestigious” jobs too. The advice I was given was to work your way into a position of leverage within a company and then do this. But I learned that finding a company who will pay you what you want outright is a better strategy. You will be infinitely more respected and trusted.
I love the optimism and in a lot of jobs (especially the jobs filled by folks who read HN), it's mostly true.
> Their value, their ability to work out and improve a workplace situation, and often also the ability of their superiors to change perspective and collaborate on moving forward.
This just is not true for so many jobs. Middle management in many industries (hospitality, personal care, child care, etc.) are not empowered to have these sorts of conversations and the only option is to quit, or be fired.
That's quite a defeatist viewpoint and just not true. Plenty of working conditions have improved because workers didn't put up with the issues and fought them head on.
Edit:
My first sentence is out of place. What you say is obviously true to a large extend. The second part of my comment however as well.
> Good leaders respect you if you have these skills
Most workers will have to deal with an adversarial manager. Most will need a union or some kind of collective bargaining.
Yes, you did mention collective bargaining. But collective bargaining is much more important than having leaders^H managers that respect you, or relying on your own individual gumption and confidence. Maybe they respect you but it’s often their job to keep you in your place.
Without democracy in the workplace and collectivisation the economic forces are purely on the side of the employer. We're taught that individual action is the only way to improve one's situation in life, but it's impossible for this to improve living standards at a societal level. Workers coming together is the only way employees can have real leverage.
But can we have meaningful democracy in the workplace with the current education system[1] that trains docile workers? Or with our political and judicial system outright owned by corporate interests?
> Workers tend to underestimate a couple of things: Their value, their ability to work out and improve a workplace situation, and often also the ability of their superiors to change perspective and collaborate on moving forward.
I have several first hand experiences where a core developer (or original inventor) would leave the company after being refused a raise or a promotion only to be replaced by two or three less efficient (but not cheaper) developers. And we are talking supposedly ration and egalitarian IT companies here.
Most companies are internally run like communist dictatorships. Leadership is only marginally interested in the conditions of their underlings but they compensate for that with spreading a ton of propaganda. They send out mission statements ("We believe in..."), company newsletters, hold motivational meetings. But it's almost always a one-way street. Lots of information comes from top down, but almost nothing trickles up.
In the end you just have to accept that below a certain level you are not part of the "in" group and the "in" group has no interest in your opinion. They are only interested in what benefits them.
It's always the first thing I try. Last time I asked for a raise they said not even the team leads make that much. I leveled up into the same job at a different company for the same pay I was asking for, plus better benefits. And the job turned out to be much less stressful too because of how management ran the department.
> There is another way, which is negotiating and clearly stating one's goals.
Negotiation of every form (whether it is for buying a car or a trinket at the flea market or for pay or promotions at work) only works when the option of walking away from the negotiation is also a viable option and both parties know it.
For someone who is independently wealthy and can walk away from the job any moment, there is great power in negotiating their way up. But one must be ready to walk away.
For us regular people who need a paycheck, negotiating with current job is very risky. It's much safer to find a potential new job and negotiate with them before accepting it (when you can still safely walk away).
> And it is understandable. We tend to get taught how to be good worker bees. Reading and writing, math, discipline, shallow/propagandized politics and skills that prepare for work.
This reads like we are conditioned since a very young age, but it's not true. Large corporations design their basic training curriculum precisely for this.
Standardised levels, responsibilities, and wages, also remove leverage from individual workers, who are left with collective bargaining, which is harder to achieve.
Good people really don't have much of a choice other than leaving crappy jobs.
>But we aren't taught how to negotiate, question authority, organization (the real kind, not the following orders kind), collective bargaining, solving conflicts and compromising as equals etc. These are _essential_ life skills.
It's against "the system's" interest to teach these things to any useful degree.
At the bare minimum the institutions that are responsible for the bulk of the teaching in our society would be making their own jobs harder if they taught that stuff.
It's not "the system" but particular political interest groups. It comes in the form of disallowing certain books and teaching practices, emphasizing dominant/mainstream culture and subordination and a traditional sounding, distortive narrative. This is fueled by a lot of money and emotional propaganda. The counter reaction has increasingly become bureaucratic and moralizing instead of empowering and democratizing, which doesn't help the issue IMO.
No of course not. It is an encouraging statement which comes from experience. People (and past me included) tend to _underestimate_ their managing superiors, business owners, big clients and so on and think they will not respect a push for improvement, but I found that the opposite is true just as often. It's often a win/win whether you fail or succeed.
Labor shortage is a wage shortage is a housing shortage is an urban land shortage.
When housing is so expensive, why would low wagies bother if they can't afford a rent. They end up on the street regardless of working.
Housing shortage in just a land shortage in urban areas. There are not that many places to rent compared to the size of the city. Most buildings are out of the market, not suitable for renting out and the owner is cash strapped to get it into a livable condition. Since housing keeps appreciating at such rates lately the owners suck it up with property taxes and depreciation and just keep sitting idle on properties. The houses are out of market because the owner is asset rich, but cash poor, but nobody forces him to sell back to the market.
It's a liquidity problem, not in money, but in houses. When unused housing from asset rich but cash poor owners, who got properties through inheritance, sits idle and never returns to the market, there is no supply and demand dynamic in the market anymore. The market doesn't clear and brings the economy to the halt. (One solution is LVT to force market clearing).
An economist Michael Hudson talks about this a lot as "industrial policy" and includes what we think of Socialist welfare benefits in the calculation.
Housing shortage is one part of the equation that drives up worker's demands for wages, but so is having to pay for healthcare, fund their own retirement, the burdens of childrearing, and education.
His point is that by socializing those costs, companies can pay their workers less, which leads to a cheaper cost of goods sold, and more competitive exports.
Fascinating take that would probably never have occurred to me.
Another benefit of all those things is reduced friction from switching jobs, which increases competition in the labor market and makes it more efficient. It makes it easier to found a startup, easier to quit a toxic job and look elsewhere, etc.
How does socializing those costs really work? The US Government rarely, if ever, seems to be more efficient than the private market. Somehow those socialized things need to be paid for, where do the taxes come from in a way that does not affect the final cost of the product? And how is that implemented in a manner that is compatible with the overall US capitalistic economy?
> The US Government rarely, if ever, seems to be more efficient than the private market.
The governments purpose isn't to make money. The military, police, IRS, USPS, all serve different purposes, some of them make money, some don't.
> Somehow those socialized things need to be paid for
We already pay more for healthcare than any other nation; does it matter whether that goes thru the middleman of insurance or not?
>where do the taxes come from in a way that does not affect the final cost of the product
Prevention beats a cure - do you want healthy workers that are able to get preventative treatment and save money in the long run? Dental health is routinely neglected but a large indicator of economic status. Not only do healthy workers extract less from the healthcare system, they generate more in revenue.
...and you can also take money from other sources? I'm not sure why healthcare means some explosive bomb dropped out of nowhere. We're already paying for this, and it ISN'T efficient because of the necessary fiduciary incentives.
>how is that implemented in a manner that is compatible with the overall US capitalistic economy?
How is it such a special and weird case that isn't already covered with other socialized services that already exist within the US economy?
> The governments purpose isn't to make money. The military, police, IRS, USPS, all serve different purposes, some of them make money, some don't.
My point is that people are paying for these things today. If we are proposing moving them to being government-managed, then it seems like overall costs could increase, not decrease. Because our government gets its money from taxes, that means additional taxes need to be extracted to pay for the potential increased costs in providing these services.
>Prevention beats a cure - do you want healthy workers that are able to get preventative treatment and save money in the long run? Dental health is routinely neglected but a large indicator of economic status. Not only do healthy workers extract less from the healthcare system, they generate more in revenue.
I don't think this really answers the question though. Many (most?) full-time workers already have some form of healthcare. However the healthcare system is currently overloaded from a demand/supply scenario. So if we make healthcare more widely available we need to first fix the supply side and the associated costs, that does not happen quickly, IMO. So, rather than just talk about this in the the theoretical, I am curious about a summary for actually implementing it in a workable manner.
>How is it such a special and weird case that isn't already covered with other socialized services that already exist within the US economy?
Which examples of existing socialized services do you use as the model for success?
I'm the poster who you originally posed this question to, and I think it's a valid question without an easy answer. In large part, it depends on the culture of the country.
On one hand, government healthcare could easily be cheaper an provide better outcomes by eliminating the middleman of insurance- having things centralized into one entity can be more efficient through many mechanisms (reduction of duplicated effort, elimination of requirement for profitability, etc)
On the other hand, government healthcare could easily be more expensive and provide worse outcomes if it was corrupt or poorly administered, or if it became a target for corrupt providers.
I think in America we have a culture of ripping off and destroying any government provided social benefit. Just look at medicare fraud and social security fraud.
Other countries may not face those issues- for example the nordics seem to be doing well.
> Housing shortage in just a land shortage in urban areas.
You're talking about supply when you mention housing shortages, but let's look at the other part of the equation in a shortage: demand. Another perspective for a housing shortage might be to call it a people surplus. I don't blame anybody for seeking a better life, but I'd think at some point, an excess amount of illegal migration would have a noticeable impact in some areas.
> housing sits idle
Just curious on if there's a good estimate of how many houses sit idle and unused and if this has increased or decreased over time? I'm sure that some housing sits unused, but if it's a few thousand homes in an area where there's say a few hundred thousand families looking to buy, I'm not sure if that really makes a huge dent.
There are over 16 million vacant homes in the US[0]. There is also only over 500k homeless people in the US[1] meaning we could house each homeless person around 32 times over. I think it could make quite a large dent
> There are over 16 million vacant homes in the US[0].
This sounds like a very large number, but large compared to what? The key thing to look at is how does it compare to the past? If there's no substantial difference today in this rate versus the past, then maybe idle homes might not be the biggest factor. I don't know the answer to this or where to lookup this stat.
> There is also only over 500k homeless people in the US[1] meaning we could house each homeless person around 32 times over. I think it could make quite a large dent
Homelessness is sort of a separate and off-topic issue largely involving mental health and drug abuse and cannot be viewed as being solvable simply by using idle homes. You could give each homeless person a mansion, and many of them would be ruined beyond repair in a short amount of time due to all kinds of unfathomable reasons like very ill people using a hammer to search for demons hiding in the walls.
There is undoubtedly significant percentage of homeless people that would greatly benefit by being put in a home. Stating otherwise is delusional and morally reprehensible.
> There is undoubtedly significant percentage of homeless people that would greatly benefit by being put in a home.
Of course many people would benefit from a plan to solve homelessness by being gifted a free house: among them the homeless person themselves, probably the already well-off or rich corporations like BlackRock selling it to the government for 250% market value, and the Federal employees overseeing such a fiefdom.
But simply counting empty houses and the number of homeless and observing that the number of empty houses is greater than the number of homeless isn't the framework for a solution. I'm sure I'm not the only person here who has worked with the homeless and experienced why they're homeless first-hand. The number of normal people who are simply down-on-their-luck through unfortunate life events is relatively small. Many people who have been homeless longer than a very short time are not even close to being well. Many of them would destroy their free home, and I do quite literally mean that they would take it apart looking for scrap to pawn for drugs, or to destroy demons they think are hiding in the walls.
Even beyond the homeless issue, have you considered all of the costs to such a plan? I don't even mean who is going to pay money for the homes and set this up, I'm talking about the actual outcome to society. Just adding one mentally ill guy in a normal neighborhood who isn't watched 24/7 by professional help is going to utterly terrorize his neighbors. Throwing hundreds of thousands of homeless into average neighborhoods in idle homes would ruin quality of life in this country. Would you prefer living next door to the guy who collects bags of poop, the guy who likes to expose himself to strangers for fun, or the guy who who's walking around all day looking for stuff to steal and who's willing to rough you up if you look at him the wrong way? Which one of these do you want around watching your kids play?
This doesn't provide any data on the livability of those homes. Homes that have sat vacant for years would needs tens of thousands of dollars to be habitable, or impossible to bring up to modern code
>There is also only over 500k homeless people in the US[1] meaning we could house each homeless person around 32 times over. I think it could make quite a large dent
As long as you're fine with shipping homeless people to desolate places like oklahoma, sure! There's a reason why people flock to cities even though the rent there is sky-high.
> I don't blame anybody for seeking a better life, but I'd think at some point, an excess amount of illegal migration would have a noticeable impact in some areas.
I don’t find this to be a useful line of thought most times because it’s extraordinarily nationalistic. What logic justifies saying that migrants are driving out current inhabitants? Only one where the current inhabitants are somehow superior. This doesn’t _just_ apply to international immigration, but also local. In HCOL places, people constantly don’t want people moving in from other cities. What justifies that? Somehow the locals in the city are superior to everyone else in the _entire world_?
Thankfully you cannot restrict moving across state borders. So what justifies restricting moving across national borders?
I really can’t think of a rational justification.
The reality is that the world had a shortage of nice places with high quality of living. Restricting immigration (or local migration) to reduce demand means that those people must stay in their lower quality of life area because of some artificial rule. That’s not fair. What makes a local any different from an immigrant? Both are people. If the immigrant wants to pay a lot of money to purchase a home from a local, why is that a bad thing?
The logic is that if your house can only comfortable accommodate 4 people then it makes sense to say no to the 100 people who also wants to move in. Resources are not infinite. The same goes with culture. The more people you add to a culture who doesn't care about or understand your culture, the more your culture will be destroyed.
I appreciate your response, and wanted to make a few quick points to your uncharacteristically (for HN) reasonable rebuttal. I just want to give a little nutshell version of my thoughts here because this is a very long and nuanced discussion that might not work best on HN.
> I don’t find this to be a useful line of thought most times because it’s extraordinarily nationalistic.
Ultimately as a philosophy, I'm not super in favor of the concept of nations either. However, so long as we exist in a world with governments, somebody is making your area's rules. If it's not your group, it's outsiders who vote with their feet and who are going to decide it for you, to their own economic and cultural advantage and not necessarily yours.
Completely unfettered mass migration would not be as objectionable if we were living in a more libertarian system: no welfare state, no subsidized transportation, no rules preventing the right of free association, etc. Then everybody is just their own person who poses no potential of financial burden on you with their presence and who you're not forced to associate with if you don't want to.
The problem is that you can't have both a massive welfare state and unfettered immigration without posing many significant problems for the native population.
> What logic justifies saying that migrants are driving out current inhabitants?
Please note that I didn't explicitly make the argument that migrants are driving out current inhabitants. I simply made an economics point about housing prices. All other things being equal, the demand for housing increasing would tend to increase the price, right?
>I'd think at some point, an excess amount of illegal migration would have a noticeable impact in some areas.
The problem is that housing isn't where the jobs are. That this is reflected in labor prices should be evidence enough. The prevalence of right-to-work and union-busting means that workers want to live in a place with multiple job options, which means that there is demand for cities. Working for the only paper mill in Covington, Virginia isn't such an attractive proposition when you can be fired at will and have to move to a new town.
These are very interesting and useful stats, but I'm not sure how it follows that newly created units going up and down at various points in time proves that the supply has been depressed. Can you explain how the supply is being artificially reduced? In some areas like San Francisco I suppose, there's a hesitance by many to want to build denser high-rises and building is a challenge to push through, but I'm not sure what else you might be referring to here.
The growth rate might be lower, but because there's a finite amount of land near cities, the problem might be that this is one area where absolute numbers matter more than rates because it's just physically tougher to build more units in a time period even if more laborers are available. (and this is even assuming that the census figures are anywhere close to accurate, which I'm not so sure about)
> there is demand for cities.
Of course many people want to live in cities for jobs and other perfectly valid reasons, but I'm not sure how this argues the point that illegal immigration doesn't have some sort of effect on the overall housing market. All other things being equal, a larger supply of people would have some sort of effect on the price, right?
> You're talking about supply when you mention housing shortages, but let's look at the other part of the equation in a shortage: demand. Another perspective for a housing shortage might be to call it a people surplus. I don't blame anybody for seeking a better life, but I'd think at some point, an excess amount of illegal migration would have a noticeable impact in some areas.
The demand in urban housing comes from rural areas going decrepit: schools close, no higher education at all, no fast and reliable Internet and 4G/5G mobile connectivity, no public transport, rotting roads and bridges, no banks, no medical services, no shopping, no employment, no entertainment other than drinking and shooting tin cans.
If you want to live a modern life, there is no alternative to moving to urban areas.
> schools close, no higher education at all, no fast and reliable Internet and 4G/5G mobile connectivity, no public transport, rotting roads and bridges, no banks, no medical services, no shopping, no employment, no entertainment other than drinking and shooting tin cans.
I live in a rural area.
Schools are open. Higher education not only exists, but the local community colleges partner with the state schools to give full access to us rural folk without having to commute in to the school. We have fiber to the home in many areas, high speed access in almost all the rest of the areas, and projects underway to fill in the gaps. We have 4G all over, 5G on a few towers. I can see 3 towers from my home, so we are not exactly disconnected. Our roads are doing fine - the local taxes pay for road maintenance quite well. Yes, we have banks. Farmers probably need more banking than you would expect. We are well covered there. We have medical service in every town and they partner with the state teaching university for specialist care, so we're doing OK there, too. Our unemployment rate is the lowest it has been in decades. Shopping exists here, too.
Rural areas are shrinking because people prefer cities. But we are not decrepit and you absolutely can live an enjoyable modern life here.
> The demand in urban housing comes from rural areas going decrepit: schools close, no higher education at all, no fast and reliable Internet and 4G/5G mobile connectivity, no public transport, rotting roads and bridges, no banks, no medical services, no shopping, no employment, no entertainment other than drinking and shooting tin cans. If you want to live a modern life, there is no alternative to moving to urban areas.
I'm a city dweller, and I think this is an ugly, misinformed, elitist comment.
You have all these companies reporting record profit and margins, but somehow they can’t pay people more? We are seeing this behavior all across the supply chain. These companies are skimming more and more off of the top with “pandemic” and “supply chain issue” as excuses. I’d like to think there’s a reckoning for this type of behavior but sadly that would be very naive of me.
There should be tremendous benefits to companies who share wealth with their employees. Like an employee-wealth matrix that informs the tax burden of an enterprise.
That way they can make a greater socioeconomic impact while still upholding their corporate and shareholder responsibility.
Of course the first cut would be the deepest - penalizing companies who exploit labor. Good luck with that.
Fair question, and not a good choice of words on my part.
It would be more effective to model positive employee outcomes like home ownership, debt-to-income ratio, retirement savings, education savings, health coverage, and the like.
On the contrary, some multi-billion dollar enterprises make a show of how the employment they provide is _designed_ to be temporary and low-paid. You aren't supposed to rely on this kid!
"You have all these companies reporting record profit and margins, but somehow they can’t pay people more? We are seeing this behavior all across the supply chain. These companies are skimming more and more off of the top with “pandemic” and “supply chain issue” as excuses. I’d like to think there’s a reckoning for this type of behavior but sadly that would be very naive of me."
Super yachts are becoming more and more expensive. They can't afford to pay people more.
Unfortunately, there's just not enough solidarity between workers in the tech industry: e.g. Java programmers who develop features often see themselves as a different class of professional (and people) than Java programmers who develop tests, even though their jobs occupy the same pixel in the spectrum of all jobs.
This internal stratification of a profession has always been common in engineering disciplines, but in tech it has been exaggerated to the degree that, often, workers see themselves as members of a singleton class, thinking their situation is totally unique.
The solution to this problem is also as old as time: workers need to get used to sharing and talking about their grievances. So, as an example, for a work force that is systematically underpaid, first we have to eradicate the mindset of "it is shameful to be paid less than average", so that people will talk about their pay, find common grievances, and then potentially act collectively.
People will put up with almost anything for a price but they won't put up with eating shit while making shit wages. An executive assistant makes $100k+ to be a personal punching bag. And the main requirements for the job is be organized, be discrete, be willing to put up with a lot.
When I was a teenager, I was a little asshole to fast food and phone tech-support workers (basically falling into the "Karen" stereotype of people). I feel pretty bad about that now, because of course these people don't make nearly enough to put up with me being a douchebag to them. It's entirely possible that I ruined at least a few people's day by being a dick, for no other reason than I was unwilling to realize that people making minimum wage really shouldn't be yelled at unless they're mean first (which they generally aren't).
Nowadays I try and be extremely polite to people serving me food or checking me out at the grocery store, and make a point to only be mean to people whose job it is to be yelled at.
I don't think that's always the best policy; I agree that 99% of the time you should be nice to everyone, but there are times when a company simply will not do what you need them to do unless you're a bit of a douchebag to them.
I'm not saying you get personal and insult their mothers or anything, but being impolite and slightly aggressive is (sadly) sometimes necessary.
Just note that it's going to be very, very rare that the person you're being "impolite" to has influence to change the company in a way to "do what you need them to do".
Well said. Half the stuff on r/antiwork may be fiction, but it's fiction based on truth. Every story told there about unfair working conditions is true somewhere. There is a stunning documentary waiting to be made; identify about 20 stories on r/antiwork that are true, go investigate them and make a film about it.
I don't think I suggested making policy based on truth-inspired stories, and I didn't suggest spreading truth-inspired stories. What did I say that made you think that?
To be clear, I'm suggesting someone filter through the fiction and hyperbole and identify real cases of unfair working conditions and tell those true stories in a documentary. Filtering out the hyperbole is an important part, people need to be able to point to the documentary as a source of documented unjust treatment, something more reliable than Reddit.
The same is true of almost any shortage. You can almost always get what you want, for a price. Whether that price makes economic sense for a business to pay is a different question.
My company paid out 2 billion in stock buybacks last year but we had to threaten to unionize to get a decent cost of living increase. Greed and the devaluing of the modern worker is the obvious answer.
I assume here that your point is that your company should use that money to pay higher wages instead of using it for stocks buyback.
The two question that needs to be answered are
- With two more billions in wages, how much more/better would have employees worked ? Would that have had a meaningful impact on the stock price ?
- Can these two billions be considered reliable income ? If next year is less good, how easy would it be to reduce wages, if those we increased last year ?
The main issue when discussing wages increase is that once they are agreed, they become a de facto mandatory cost, forever. If you have had a good year and have some extra cash, but aren't sure how much of that you can replicate consistently in the next decade, increasing wages is a very bad idea as that one time good news becomes a recurring cost that can put your company in danger down the road. If you want to do that, you can only send a small fraction of said money every year.
Let's take an example: HCBS announced a 2 billion stock buyback in Oct 2021. Let's assume they use that amount on wage increase. All of it. They need to sustain that wage increase for 10 years until salaries are back to "normal", so they can "give away" $200 millions per year. They have 226,000 employees. So that amounts to employee cost by $884/year/employee. After tax, costs etc, that will amount to something around $50 / month of "in hand" money. It's cool, but not really the life changing event you might have expected. And I don't think that $50 per month of additional salary will translate in any significant productivity gains that will impact the stock in any meaningful manner.
Nice try HCBS exec... $2 billion goes a long way in many other forms: bonuses for higher performance, increased health benefits, expanded parental leave, etc.
Or just give me the $50 and _I_ will decide whether that is significant or not.
Yeah... how does that compare to the stock buyback program? The way the stock market is going it seems like securing more worker happiness probably would've done it. I would bet, that in the next year or so, the benefits of the stock buyback are completely lost. Whereas the effects/value of giving people $8k (your initial divide by 10 is a needless factor to make the numbers look worse) can be seen entirely by the pandemic stimulus paid to workers.
I suppose as an executive you ought to consider the cost of attrition and replacement. By giving your employees nothing while making a sizable stock buyback, you're almost certainly going to disgruntle people. Some will leave. Often your best employees. Others will stop working as hard, having a negative affect on your "productivity gains."
Additionally, if your financial outlook is so poor, maybe you shouldn't initiate a stock buyback. It's okay to sit on cash to even out bad years. Using stock buybacks to artificially boost stock price so performance targets can be hit to trigger bonus payouts likely don't help with productivity either.
Ability to pay matters though too, so in one sense what you say is true but it may also be irrelevant in terms of solving the problem. If the market-clearing wage for a given job at certain types of businesses is $30/hour but previously paid $25/hour that might be okay. But if it's a type of business heavy on labor costs with tight margins it might not be possible to pay $30. Raising prices is one possible answer but demand may be inelastic and business dries up at increased prices.
We can argue that such businesses had unsustainable models, but that wasn't true 2.5 years ago, even if inflation has made it true today. So perfectly reasonable business models that were paying reasonable wages are, suddenly, no longer viable and maybe they collapse.
I don't have a good answer for this. If they were business models that don't work if you pay a living wage I've seen some people say "well those were always bad businesses and deserve to be trimmed off the economy." For jobs a tier or two up that in this position because of recent economic trends it's not so simple. "Let them fail" seems like a neat free market solution but it also wreaks havoc on the economy with lots of people hurt and contagion spreading to other businesses as more people lose jobs, and a death spiral begins.
But what's the alternative to "let them fail"? UBI? I'm in favor of experimenting in that area but I'm not convinced it's a silver bullet.
There isn't really an alternative that doesn't cost the tax payer. "let" is a misnomer, because no one is "letting", it's a natural consequence of the inability to profit.
A business could increase their productivity or try to make do with a lower profit margin, but if none of these work, they fail.
I suppose it's "let" in the sense that there is not government financial or policy intervention. Though I agree "let" might be the wrong word because there's a slight implication that failure is allowed despite available solutions when, in this case, alternatives are all bad just in different ways.
No one owes anyone else a viable business. If it is not viable in current market conditions then the business owners have to adapt or shut up shop. Tough bickies.
I agree no one is owed, and I hope the tone of my post did not imply otherwise: it wasn't my intention. But there are negative consequences to those failures of a business that bleed over into other areas, impacting businesses that may otherwise have been healthy, or bleed to the economy as a whole.
In that way, it's less about what is or isn't owed to a business and more about whether external actions could be taken that keep the entire system from weakening. Take baby formula: Abbot isn't owed a functional formula plant, or government assistance to bring one back online, but not having it online impacts hundreds of thousand of babies, specifically those with special nutritional needs. Abbot screwed up an doesn't deserve tax payer money or special considerations or stop gap measures, not in the narrow sense of getting it's business in order. Bt the alternative hurts people in a very immediate & real sense. External intervention is less about helping the business and more about saving the health of many thousands of babies.
That, however, is a much different circumstance than the labor shortage. I just offer it as an example where what's "owed" is not the only and maybe not even the primary issue. In the labor shortage though I just don't see a clear external action that could save collateral damage. There are no good solutions.
> Raising prices is one possible answer but demand may be inelastic and business dries up at increased prices.
Half-nit/half-tip: if demand changes when price changes, that means that demand is elastic with respect to price. Demand that does not change when prices increase is inelastic (with respect to price).
> So perfectly reasonable business models that were paying reasonable wages are, suddenly, no longer viable and maybe they collapse.
No longer reasonable. Reasonable isn't a title or award you get to keep forever.
> "Let them fail" seems like a neat free market solution but it also wreaks havoc on the economy with lots of people hurt and contagion spreading to other businesses as more people lose jobs, and a death spiral begins.
You have to have a civil government that plans for this, rather than just making decisions to maximize business outcomes. Take care of people directly instead of propping up businesses to take care of people, which is just an avenue for corruption. UBI is an idea that gets traction due to its complete lack of detail, but a social safety net is what's called for. A federal employment agency to fix HR and guide the unemployed into retraining or extending their education and skills, pipelines into trade apprenticeships?
We don't need a silver bullet, we just need a functioning government, and a reduction of the options for implementing corruption, especially with public funds.
Just govern, instead of panicking when billionaires aren't governing for us, and don't have our best interests at heart.
It's not my premise-- I don't claim to know where the best balance between "free" and "guided" might be. It's more my observation on based on what the current situation is. In our current system I don't see a good solution.
>"Let them fail" seems like a neat free market solution but it also wreaks havoc on the economy with lots of people hurt and contagion spreading to other businesses as more people lose jobs, and a death spiral begins.
I would just do socialism for workers rather than for bosses.
This is symptomatic of neoliberal reductionism. We shouldn't treat labor as any other commodity. Apples do not care what their market price is, but workers (humans) do, in fact, high wages are an important component of human well-being. The economy should ultimately serve needs of humans, not the other way around.
All commodity prices are ultimately labor cost. No one else than people get paid!
The cost of apples depend on the labor cost of apple pickers and farmers, etc.
As a consumer it's easy to think of apples as something that "just appears" in the store. If you feel argumentative, that view is a way of dehumanizing the people working in the apple supply chain.
>All commodity prices are ultimately labor cost. No one else than people get paid!
>The cost of apples depend on the labor cost of apple pickers and farmers, etc.
This isn't true. You had to pay somebody for the land those apple trees are grown on and when you do you're not paying them for their labor, you're paying for their status as a land owner.
>All commodity prices are ultimately labor cost. No one else than people get paid!
And this is why allocating resources to improving the efficiency of human labor is so important. If a person can be get twice the amount of work done then the fruit of that labor is going to eventually be cheaper for everyone else.
Ok? It’s fine to think wage share of GDP should be high and I agree. But the fact is that there is a relationship between labor supply/labor demand/and wage and I’m just pointing out that by the logic of “there is no labor shortage because wages could go higher” there is almost never a shortage of anything.
If you want high wages and human well-being, your decisions about how to allocate society's limited resources need to be made in a way that respects the consequences of those decisions. When you don't, the results are ugly.
Because of its centrality and importance, we should be more rigorous about how we approach the economics of the labor market, not less. That's not "neoliberal reductionism". It's the universal laws of economics: the readily-foreseeable consequences of our political decisions and regulations that define the allocation of society's limited resources. When instead we are too-precious about how we treat labor (disrespecting fundamental economics in the name of justice and equity, living in ignorance of the consequences), then we will find stagnation instead of growth, higher rates of unemployment, more inequality, and more poverty.
If everyone gets higher wages then prices all go up due to inflation and then workers are back where they started. What you really want isn't higher wages per se, but rather reduced income inequality (Gini coefficient).
That only works in the small scale — company X can’t find the staff, or person Y can’t find a home, but if they had more money they could.
In the scale of nations, adding more money without increasing supply is called “inflation”: if there was a shortage before, it’s still there even if everyone has an extra thousand currency units per month, per day, or per hour.
In particular, there's a fundamental constraint we need to remember: in order for people to buy things with their wages, those things must be produced. That is to say, it's not possible for businesses across the economy to just decide to pay everyone better in real, inflation-adjusted terms of what they can actually afford to buy with their income and make everyone better off, because that doesn't magically make more stuff spring into existence to purchase.
There's a kind of thinking I see a lot in these threads where there's no labour shortage, businesses just need to pay better and if they don't then they don't deserve to continue existing as a business, framing this as evil businesses jsut complaining about not being able to keep their non-viable business models going anymore. The thing is, this misses the other side: a lot of those businesses produce stuff that consumers want, and if they're no longer viable any more then that consumer demand cannot be filled at the price people were willing to pay, again decreasing the value of people's income in real what-they-can-buy terms.
In many cases, especially small businesses, there may not be sufficient profits to spread around. At some point on the price scale, a lot of restaurants just aren't going to have customers. And how many people will be willing to take an Uber if it costs $10/minute?
That depends on how elastic the supply is. If everyone is willing to pay more for van Gogh paintings they simply get more expensive. But most things have a much more elastic supply, even if often only on the scale of years instead of months.
If there's a sustained screw shortage that drives investment in new factories. If there's a sustained oil shortage and everyone is willing to pay double for oil that drives investment in extraction methods that previously weren't economically viable. Germany had a sustained labor shortage in the 50s and 60s due to a booming economy with a war-decimated population, which drove immigration of Turkish workers (including bilateral agreements to smooth the legal process).
If restaurant prices were 100% worker pay, that would be true. But when you increase pay by 50%, your prices do not necessarily increase by 50% which also does not mean you will have 50% less customers. Currently owners of businesses minimise ALL expenses, but for workers, that is already at minimum. For some workers it's below a minimum which they can accept, so they don't work.
You're right that if you've got a sinking ship with 1000 passengers, and only 500 seats in lifeboats, no means of allocation will make 1000 less than 500.
But in almost all markets, higher prices reduce demand. I don't own a Rolex because they cost too much, I settle for a Casio instead. Does that mean there's a Rolex shortage?
Luxury goods like Rolex watches are kind of a bad example because manufacturers intentionally produce less than they could in order to create artificial scarcity.
Edit: And from the downvote to disagree reaction, looks like people not only get their terms from economics without looking their meaning, but seem to be also incredibly confident on it.
I did not downvote, but the flaw in your reasoning is that while microeconomics defines supply and demand to intersect at equilibrium, it does not require those curves to stay unchanged.
The argument of "if you add more money without increasing [demand|supply], the equilibrium price will change" has a different meaning depending on which of those words you choose, even though at both the old and new equilibrium, the curves will intersect.
Well, they don't intersect "at equilibrium", they are the same, with the only possible addition of some noise with average 0 due to accounting delays. In microeconomics you can cut your data and ignore parts of them, so they can become different, but the thread up there is taking about markets, not single entities.
The argument does not change if you trade supply into demand. In fact, demand and supply are not good quantities to put on it at all, because both are defined for a set price, so if you add more money and keep them unchanged, the equilibrium price doesn't change. The entire inflation event happens because they change. Both sides of the disagreement up there are logical consequences of looking at half of that issue and trying to get a full picture from it.
Equilibrium does not refer only to a static two-dimensional chart with quantity on one axis and price on the other.
It also refers to the reactions of market participants to other factors (substitute goods, supply and prices of key inputs, money supply, taxes/tariffs, etc.)
I don't get where you are going. Supply and demand being the same does not depend on the reaction of people. They are the same because they measure the same thing.
The supply curve shifts when conditions change. (When you make inputs more expensive, suppliers will offer fewer units at a given nominal price.)
The demand curve shifts when conditions change. (When you airdrop money to people, they will be willing to pay more in nominal dollars for normal goods at any given quantity.)
Well, I'm pretty sure the OP was talking about quantities.
Anyway, those curves are mathematical things people create for analysis, that mean absolutely nothing by themselves, and only give you back the conclusions of whatever assumptions you put on them. The phrases you have between parenthesis mean something, the ones you have outside of the parenthesis do not say anything.
If people kept their discussion at the real stuff from the beginning, they wouldn't ever miss their meaning and try to form mathematically invalid arguments by trying to change half one equation while assuming the other half constant.
Right. On a market with free pricing "shortages" manifests as raised prices. Which serve as a signal to increase supply, providing a self healing mechanism.
The type of shortages where buyers have to wait in line, are picked by lottery etc, only appear when prices are fixed.
Except for inelastic (including periodic) markets, which are many of our markets. For example, you can't self-heal the supply of fresh peaches if there are no more fresh peaches left in the season.
There is an existing market solution to this, which is futures. Unless you sell onions (loooooong story) futures exist to insulate farmers from some of the fluctuation in markets and provide price signals for future planting (which is on the order of years, iirc 10 for a peach tree to become fully productive).
It doesn't work perfectly and in fact can't. But it's there and it functions.
Edit to add the other half of this: someone looking to buy a peach wants to eat a piece of fresh fruit or make a dessert, a season of high prices might mean they make more apple crumble and less peach cobbler. It's not the end of the world. There were many years when I was in the black cherry buying market for roughly six weeks a year, because I couldn't afford to eat them over four bucks a pound.
Right! I didn't mean to imply that there weren't market solutions, only that they have somewhat absurd consequences on their tail ends (pure supply economics creates an "infinite" price for "none" peaches, futures can make markets less stable if you treat them as the speculative instruments that they fundamentally are.)
Futures are probably the right choice. But they're fundamentally derivatives that paper over underlying supply and demand; their chief function is to shift who gets to raise prices and when, not to conjure more peaches.
Infinite prices for nonexistent goods aren't a naked singularity, it represents something meaningful.
Naive models don't engage with the information aspect of scarcity but the field of economics certainly does. Peaches never hit infinite price, there's too much production, but "I know a guy" certainly becomes part of the market-clearing mechanism, that boils down to reputational capital. Even in normal market conditions there are people making their living on that sort of capital, picture someone who can reliably get sashimi-grade fish at a less insane price.
in which case, the correct behaviour is to not plant peaches! The higher price of peaches _during_ the time when it was 'hyped' is the economically correct response.
I think a real part of the equation that we're missing is that the "value" that the market can charge for the fruits of labor is going down. Not sure how to verbalize/explain the point better. So the potential that 1 hour worth of labor can be sold for on the aggregate is going down. And in my head it makes sense because automation is making the bulk of our labor redundant, and it's only going to get worse. The market is signaling something deeper that we're yet to uncover because we're looking at second-order signals.
Of course, that doesn't mean that price fixing is always a bad idea. We're just so used to not having to deal with genuine shortages that most people don't even consider what can happen when there's a true shortage of essential goods like food.
Wrong. The "if you pay enough" is related to the available resources.
There is real housing shortage when people on minimum income cannot afford a house.
There is real health care shortage when people on minimum income cannot afford health care.
There NO labor shortage when many big companies belong to billionaires that get wealthier every day (even during Covid). Small companies might survive or die but large companies are the ones driving salary expectations the most.
Those big companies obviously CAN pay more. The owners are not going to sleep under a bridge anytime soon.
On the first three points yes absolutely. The argument that you can always pay more to get what you need fails when you literally can't pay any more. Somebody will lose out. That's what shortage means, there literally isn't enough to go around to everyone.
Now for some things that might be ok. If there's a shortage of Superyachts and not every oligarch can get one or afford one, I'm not going to loose sleep over that. But if it's housing or health care as you say yes, shortages and inflation absolutely mean some go without.
The exact same argument applies to employers hiring workers, the question is are workers like Superyachts where a shortage or inflating prices are not a problem in the grand scheme of things, or are they like houses and health care where a shortage is a serious problem.
I think it very much varies depending on the sector of the economy affected. On your fourth point, not every business is run by a billionaire getting ever wealthier. Half of employees work for small businesses, and 60% of new businesses fail in the first 3 years. The world isn't composed only of oligarchs and minimum wage workers.
Is a shortage of butlers and chauffeurs a problem? No. Their employers can pay them more or go without. Does a shortage of nurses matter? Absolutely, but most jobs are somewhere in between in importance and value to society.
Some goods and services that the poorest in society depend on are labour intensive and wages compose a high proportion of the costs. Shortages of workers in those sectors and inflating wage costs translate into higher prices that can disproportionately hurt those least able to pay more.
Even most workers at big corporations are more like nurses and doctors than butlers and chauffeurs: the goods and services they produce ultimately go to ordinary consumers, not multi-billionaires like Jeff Bezos. The billionares get wealthier, and that wealth is measured in the same dollars as ordinary people's wages, but it's not the same thing at all. For an ordinary person, especially someone less well off living paycheck to paycheck, those dollars represent a claim on actual goods and services they can use. Bezos' wealth is mostly just the shares he owns times the last price they traded at. There is no way to transmute a chunk of Bezos' wealth in nominal value of shares into there being more income representing more ability for normal people to buy stuff that helps them live, even though both are measured in the same units. If anything it's the other way around: supplying ordinary people with more goods and services more efficiently makes his net worth go up and supplying less makes it go down. Failing to understand this lead to some really bad thinking early on in the Covid pandemic when share prices dropped and people interpreted this as proof that concern about the economic consequences of Covid measures was just wealthy people complaining that their horde of wealth was dropping.
Some good points there. I frequently see comments, even here, complaining about people like Bezos and Musk's wealth as though it was literally a pile of cash. Musk in particular has almost no cash at all, his wealth is entirely in the form of ownership stakes in his companies. The only way he could spend that is by selling those stakes and losing control of the companies.
I shed no tears for the guy, he's legit super rich, but he cannot just spend 100 $Bn. In order to bid for Twitter he had to sell a big chunk of Tesla and take loas out against a lot of his shares. Like I said, super rich, but within some real constraints.
Having said that of course he could cash out. Bezos is doing exactly that, Bill Gates still owns a chunk of Microsoft but he's sold a big part of his shares to fund his philanthropy. You absolutely can turn those valuations into real money, but only by either taking big loans against them which eventually need to be settled, or selling up.
> Some goods and services that the poorest in society depend on are labour intensive and wages compose a high proportion of the costs
As you said, "some", and you are further restricting the fraction with "the poorest in society depend on".
But the article is about "US labor shortage", in general. And the market, in general, is very heavily influenced by big players.
> Shortages of workers in those sectors and inflating wage costs translate into higher prices that can disproportionately hurt those least able to pay more.
Rising wages and inflation can't just be dismissed as a problem for the rich, because Billionaires can pay for it all. We all pay for it. In particular this is I think short sighted:
>There NO labor shortage when many big companies belong to billionaires that get wealthier every day (even during Covid). ...
The caveat after that about small companies was added in an edit after I pointed that factor out.
>There NO labor shortage when many big companies belong to billionaires that get wealthier every day (even during Covid).Those companies obviously CAN pay more. The owners are not going to sleep under a bridge anytime soon.
It's this manichaean view - business bad, me good - that's the crux of the issue. You assume every business is a FAANG and sitting on piles of cash. Most businesses (50-60%?) - even in tech - are small biz and biz owners are in the same boat. Very very few companies even come close to the level of your straw-man.
And you are very wrong with the (rather comical) assumption business-owners are scrooge mcducks sitting on piles of cash.
In tech, programmer salaries are hyper-inflated (compared to most other professions) and already out of reach of many SMEs and we are scraping the bottom-of-the-barrel for talent. I'm a business owner myself and I have seen this first-hand, so don't tell me there's no labor shortage.
I think a more charitable read would be to say that businesses have a strong incentive to increase profits and for many businesses, worker compensation is often a big expense, so they are very motivated to drive that down, regardless of whether their workers can make it on their compensation. That's why we have minimum wage laws, child labor laws, worker's compensation, etc. Even today, businesses would and do pay $0/hr if they can get away with it. Not every business, but enough to count.
Whereas workers have a strong incentive to both make a living wage and to keep the business profitable so they can continue to enjoy that wage.
I think the best move forward is to have more worker co-ops, so that the board is more in line with the interests of the workers vs. an owner who may not even be active in the management of the company.
I would also take issue about developer salaries being hyperinflated. Software companies are not losing money paying developers and then making it up in other areas of the business. Revenue per employee at Facebook was around $1.5 million per employee. The ridiculous thing about software is not only is it really, really scalable unlike any other profession's work product, it can and does continue to make money even if you don't put any more work into it. Look at Gumroad that basically stopped development but keeps on trucking.
> comical assumption they are scrooge mcducks sitting on piles of cash
Strawmanning my arguments with insulting remarks does not change the reality of income and wealth inequality in the US.
> You assume every business is a FAANG and sitting on piles of cash
I never said that. The article is about labor shortage in general, not in tech only.
Big players drive market salaries. That includes baristas at starbucks, truck drivers and so on. This is a well known fact.
You can also look at how many restaurant/cafe' owners complain that they cannot hire employees at wages that would require the employee to work 40 hours a week only to pay for rent.
I don’t like the “minimum income” phrase because it’s an ambiguous lower bound.
Should people with zero income be able to afford housing?
Should people without a job be able to afford housing?
Yes, people should have shelter. Starting here leads to more concrete proposals than conflated arguments about the meaning of “minimum income”. MI presumes you have a job. Is having a job the criteria we want to set for having shelter?
> Should people with zero income be able to afford housing?
By definition, "zero income" (without infinite savings obviously) means you cannot afford anything! People without income obviously cannot be included in any conversation about affordability.
Should people without income be provided housing directly or through things like UBI? Yes, of course, but that's a different conversation.
Money is basically just a way to motivate other people to do something for you :D
We as a civilisation obviously CAN build houses, utilities, hairdressers, space rockets, grow food, etc. - the question is simply "why" (in the literal, low-level sense: why would I do that for you? even if the economy at large would benefit from it, I just don't feel like working today, and besides, I don't know you well enough). And money (and capitalism in general) is a flawed, crude, but so far the only way the "why" gets answered for the majority of people.
Another way of making someone do something for you, obviously, is to be very, very persuasive.
Money is a way of measuring how much economic power someone (or some legal entity) has accrued. If you have money, then you can get someone to do something for YOU. Whether the economy at large will benefit from it depends entirely on whether those with money spend it wisely. This tends to work out reasonably well so long as (monetary) wealth is relatively evenly-spread. But not always. And of course, money in contemporary society is not that evenly spread.
>money in contemporary society is not that evenly spread.
No. Although on average it's more evenly spread in the West than in some other countries. There are a lot of personal services that are fairly common in some countries (drivers, personal chefs, etc.) that aren't really affordable except as a time-bounded or occasional thing to anyone who isn't very wealthy in the US, say.
You can generalize many problems in a way that makes discussion around the specific topic at hand difficult.
Sure, price of stuff can be a problem. But talking about wages and people and empathy is specific and worthy of discussion…so dismissing this because of other problems is not helpful nor productive.
But the labor shortage that this is taking about isn’t about qualified people, it’s about a shortage of people willing to work for given (low) price.
There is no solution to this shortage other than simply subsidizing the cost of labor that does not increase human suffering. Because the only thing that will make someone more wiling to accept shit wages is desperation.
Lots of money to shareholders or decent money to employees. Pick one. But I think there's a bias in our economic model towards the former.
(Most companies are not Google. They don't have such an insane firefose of revenue coming in that they can dump giant compensation packages on people and give them free food and discounted massages and also at the same time get year-over-year 20% revenue growth every quarter)
I also think small businesses are genuinely squeezed and it's tough for them to pay a competitive wage and also keep the business afloat.... but honestly, employees don't owe them anything. If the business can't make it, it can't make it.
This comment reminds me of a concept I've just heard of: financialization. When assets in the real economy are owned by securities markets and directed by professional managers.
Financialization is, in turn, just a product of the tendency of the rate of profit to fall (in industry). The flight to less-and-less real assets is driven by the effort to avoid having to face up to that fact of economics. This should also get you thinking about the function of cryptocurrencies, NFTs, and the metaverse.
I think this is how it should be, but we have a tendency to cry foul. If enough of these businesses go under and unemployment soars, then we have a tendency to turn to government/politics and demand that they change the economy by decree.
I do not know the answer to this. I was thinking in broader terms about political instability that can come from a surge in large enough scale employment disruption.
Among the obviously mentally unwell homeless in coastal cities, I also notice more and more (seemingly) healthy young people also living in tents and vans. I guess at a certain point your quality of life working minimum wage isn't so much better than living on the streets.
It used to be expected that young bachelors would live in boarding houses, with (maybe) a private room with a bed, but shared bathing accommodations, usually with a meal.
We made that illegal, effetively, so the entire market between living in a tent and splitting a detached home with roommates is missing. Therefore, you get people who have four hundred a month to spend on a room, with no room that cheap, and they live in a van.
Zoning regulations, which have substantial knock-on effects on everything from traffic to mental health.
When you think of suburban sprawl (especially in the US and Canada), it's largely the result of zoning regulations -- minimum distance between structures, minimum setbacks from the street, parking requirements, limiting areas where multi-family dwellings can be built, etc.
> In 1917, California passed a new hotel act that prevented the building of new hotels with small cubicle rooms.[0]
That's California, but it isn't the only place which has restricted SROs.
In some places they were explicitly legislated out of existence, others were squeezed out by the sum of various zoning and occupancy restrictions. Things like a requirement that a common kitchen adhere to commercial rather than residential standards, requiring a certain number of bathrooms per resident, and so on.
Also very much worth noting that in many cases, a woman's boarding house was presumed by law to be of ill repute, these laws having lasted into recent decades in places (I know this was still on the books in 1990s Chicago, for an example).
Just because a business can raise wages and attract employees doesn’t mean there’s not a labor shortage. Many people who take a newly higher-paying job leave another job. If both jobs raised their wages, that person will still just choose the better paying one.
A lot of why this is happening to service industry employees is because they were forced to look for new jobs when laid off, and found that other industries already offered a way better overall experience.
My 70-year old dad retired and would like to work more, but his body just can’t anymore.
Sure, we might be able to pay these people more to work, but think about how unhealthy the population is getting.
Wage shortage might be another way of saying health shortage, we just don’t have the strength to get to work (obesity is reaching 50% of the population abouts…)
That's not what I'm seeing in the US. Well, not that it doesn't exist, but it doesn't appear to be the main problem.
The problem is easy to see at the low end. Some employers have finally decided to pay a somewhat decent wage for "no experience needed" type work. There's even a few national fast food and retail chains that latched onto that and are paying $15/hr+.
So, for the employers left paying between minumum wage ($7.25/hr) and say $14/hour, what kind of pool of employees are they pulling from? Who is willing to take significantly less than they can trivially get across the street, down the block, etc?
They're pulling felons, people who can't pass a drug test, and people who won't leave due to a perverse sense of loyalty or fear of change. If they drug test or background check, then they're going under while complaining that no one wants to work.
I don't think we really want a lot of pensioners to return to work though that may be an eventual need. The numbers for younger males are pretty bad and their never working means a lifetime of social services.
Sure statistically they have various health problems in excess of past generations but I think it is rare that they can't do lighter service jobs which should mean more drastic difference in pay or qualifications for heavier service jobs than I usually saw in the US (though I may be out of date on this).
Things like ruining a worker by funneling kids through a piecemeal system that ultimately pushes them towards a rap sheet or just some kind of permanent black marks in education are much more significant problems that lead to a lot of young men sitting around either at home or in groups on streets depending on social/economic levels of their families, etc.
Prime-age employment-population ratio is exactly where it was pre-pandemic and UNRATE is near all-time lows. Population growth is slowing and retirements rose substantially. Everyone keeps looking for these cultural shifts or policy failures, but all our economic troubles (labor, housing, inflation) are still easily explainable by simple supply and demand.
This reminds me of the fellow who looked at historical data on rents in San Francisco going back to 1948 and found that "Today's outrageous prices are exactly in line with the 6.6% trend that began 60 years ago."
Interestingly, the numbers for men tell a different story, with all time low male employment. It stands to reason that some male dominated industries may be seeing a different phenomenon.
Very recently there was a struggle over $15 minimum wage for fast food workers. In my state they did change the minimum wage, now fast food workers make $15.
I've noticed lately all the fast food shops are consistently understaffed.
If it had kept up with inflation it would $28 an hour. Says a lot about the vastly growing difference in earnings and how much the poorest have lost out.
Where I live (NYC), the minimum wage is $15 an hour, which is certainly better than the federal minimum, but is still basically unlivable in New York. Cheap rent here is on the order of $1,200 a month (and that's for a roach-infested, lead-painted mess of an apartment), not even counting any other expenses.
It's expensive enough that I think it prices out a lot of low-wage workers, so I think the answer is "yes", the wages are still an issue, at least in some places.
You must either really mean Manhattan or you must not have ever looked, because $1200 isn't the bottom for a bedroom. I make software eng. salary and lived in hip parts of Bushwick for 4-5 of the past 6 or so years and paid 875-1100 for a bedroom, and Bushwick is a 'cooler' part of Brooklyn. 30 min to 14th St. Union square in Manhattan on a subway. You can look on Streeteasy right now in Bushwick and see 4 bedroom apartments that net sub-1000 dollar bedrooms. These aren't roach infested, lead paint units, a fair bit will be shoebox sized rooms but modern renovations. If you were to look in an actually poor neighborhood in an unsafe area, or were to push your commuting distance to 45-60 minutes parts of Brooklyn and Queens, you could find cheaper.
But it's still true that the poor are being priced out and doing it with a family (with any semblance of privacy / not living 4 people in a bedroom) would be horrid.
I did mean Manhattan, sorry, I should have clarified.
Even still though, let's assume you're paying somewhere around $900/month, that's a pretty tight budget for someone making $15/hour, especially if the employer isn't giving you enough shifts to qualify for "full time". My brother in law worked at Taco Bell when he was living in NYC, and they never gave him more than 29 hours, because they were afraid of having to pay real benefits. Fortunately for him he was able to stay with us and I have a yuppie engineering job and a spare bedroom, but I can't imagine what people who have kids working at $15/hour actually do.
If you can get by in a nice part of Brooklyn on a minimum wage salary - that seems not terrible.
Do we really think there was a time in the past when a head of household worked at McDonald's with a stay at home partner, two kids, and car in the garage with a white picket fence in East Hampton?
No, 2 of the apartments I lived in there had central AC and heating, one had a beautiful kitchen island and skylight, the cheaper units were 3-5 bedroom units though.
Rents have increased 20-25% in the past 1-2 years for sure, but it's still not $1200 as a minimum.
The manager may be making a deliberate decision to under-staff the shop in order to keep costs down, regardless of whether they have a "We're Hiring!" sign out front.
I've noticed in Brazil that McDonald's is using less and less people.
One McCafé I sometimes stop by only ever has one person doing all the work.
And the adjoined burger spot has almost completely done away with cashiers and put machines in their place. It hasn't solved the queues or the waiting time, but it must be a bit cheaper for the firm (Brazilians wages are ridiculous - about a dollar an hour).
Yea, you see this all over. For example: in the US, you hear about how Nurses are in high demand. What they don't tell you is that hospitals and other for-care facilities (a great many of which are for-profit companies) keep their nursing staffing levels at ridiculously low levels. I don't know why this is, but I do know those big companies profits certainly aren't down.
Perhaps if we weren't subjecting the tens of millions of Americans in the $15,000 - $40,000 income range to effective marginal tax rates of up to 103% [0], we would see more labor force participation. Between income tax and benefit phaseout, it can literally cost money to get a raise in our system today [1].
I'm familiar with the idea - but the biggest challenge with UBI is not that it's inherently a bad idea (as you note, it effectively adds a negative intercept to the marginal system), rather that it is unlikely to replace welfare systems in a lasting fashion. There are two problems:
1. UBI would be too expensive if it were to replace welfare. You can't just keep the total welfare spending of $1.16T [0] and smear it across the whole population, since that would significantly reduce the support of families receiving welfare today (since you'd be distributing the benefit _universally_). If you wanted to keep the average payout to welfare recipients the same, you would need to dole out $65,200 (the average welfare benefit) to each of the 122 million households in America, balooning UBI spending to nearly $8T, over 1/3 of US GDP.
But even that wouldn't be enough, since many families depend on even more welfare benefits, since all we did was pay out the average. Suppose you paid out the 80th percentile instead (for sake of argument, assume that's $90,000), now your welfare bill is $11T, or half of GDP. Needless to say, you'd need a lot of taxes to pay for this, and the US would shoot up to the highest-taxed nation on earth.
2. Even this wouldn't be enough: the same social forces that push to expand and grow the welfare bureaucracy today would continue to exist, and I would expect them to cause the reintroduction of welfare even if abolished under the introduction of UBI. Families receiving direct financial support under UBI could (and would) starve, suffer costly medical expenses, and otherwise need additional support, and thus create demand for welfare afresh.
> you can't just keep the total welfare spending of $1.16T [0] and smear it across the whole population
The rhetoric (idk the real stats) is that by unemploying the bureaucracy and allowing those on welfare to choose the best solutions to their problem, they will actually be net richer than by paying a case worker or whatever to dole out the checks, or food stamps etc. I'm not claiming it's true, but just repeating the fullness of the rhetoric that typically gets dropped by people who do not know the history of this flavor of UBI.
> starve, suffer costly medical expenses, and otherwise need additional support, and thus create demand for welfare afresh.
Any support for this claim? I kind of agree there will always be a need for people who are literally incapable of caring for themselves, perhaps for example might be people with down's syndrome(?)[1]
[1] IDK, dont down vote me for the example if you agree with the point that there exists some class of people incapable of caring for themselves even if fully funded.
The thrust of the (financial) problem is that all of those savings, the bureaucracy and the more efficient capital allocation, is completely eclipsed by the massive waste of paying UBI to everyone who doesn't need welfare. If 10% of households receive welfare, you're looking at a 10x increase in outlay (since you're now also paying the 90% who don't need welfare).
But to actually replace welfare, you'd need to pay enough to satisfy (almost) everyone, not just the average. This means you need to pay the 80th? 99th? percentile benefit to everyone, since UBI is a flat benefit and you've eliminated all means testing.
Assuming your 99th percentile outlay is 150% of the average, you now have to pay 1,500% of your original welfare budget in order to provide the same benefit to the 99th percentile welfare beneficiary (and 1% of people previously on welfare are still worse off). Even if somehow we could afford largess of that magnitude without spiraling into hyperinflation, it's unlikely that the efficiencies of individual capital allocation could overcome anywhere near the 1,400% premium of UBI.
> the bureaucracy and the more efficient capital allocation, is completely eclipsed by the massive waste of paying UBI to everyone who doesn't need welfare
I understand your idea. The crux here being neither of us are providing data, just rhetoric.
I'm not sure I understand. I'm using simple arithmetic to show that UBI can't replace welfare except at unfathomable expense, based on real welfare expense and GDP numbers. Do you disagree?
you dont present enough concrete values for the parameters to prove the point. eg:
What is the % improved (degraded) capital allocation?
What is the ratio of bureaucracy spend to money handed out?
What proportion of the nation is on welfare and what is the true amount of literal need (remember some people will be over paid on welfare too).
Also technically this is a Negative Income tax not UBI so it could actually be a sort of means tested against income. as pure example to illustrate the concept
Imagine >10k had a negative tax rate, everyone with income > 10k would receive money back, whereas presumably people some threshold above 10k would still net pay taxes on their total income tax return.
ultimately i'm not saying you're wrong, or that I'm right. But that neither of us has enough data to make a claim of fact beyond rhetoric.
In March, there were 1.9 job openings for every job seeker. This is the tightest labor market in history. April data this week (I expect it to be down a little)
Yes. Labor demand is softening a bit, but actually kind of welcome because it is an inflation driver. April data just out. March revised up, so it was actually 2.0 openings per job seeker, April ticked down to 1.9
https://fred.stlouisfed.org/graph/fredgraph.png?g=Q27U
JOLTS started then, and “job openings” is the JO in JOLTS.
So no, but there are many other indicators as well, beginning with an unemployment rate near all time lows, and wages going up rapidly. FWIW, the second tightest was February 2020
If you have 100 prospective employees and 200 jobs, there's a labor shortage by definition.
This setup leads to a wage price spiral, as competitors continue to raise wages to poach employees, and people ping pong between jobs frequently for pay raises.
There is an aspect of LFP where higher wages may draw in new employees, but there's not a huge well to tap there.
Labor market is hotter than ever before, while LFP is declining. Pretty fair to call it a labor shortage. Though more accurately I'd call it an overheated economy. Typically the Fed triggers a recession under these circumstances.
Also keep in mind rising nominal wages above productivity gains does not benefit workers at all. It has to be real wage gains. Real wages have been declining at a record pace
Both labour supply and demand have normal curves. Low-value employers will be priced out until there are 110 openings, and 10 people come out of retirement.
Yes either openings decline or labor supply increases. Demographic trend is toward lower labor supply though, so most likely outcome is number of job openings needs to be decreased to solve inflation.
Again, real wages have been declining so people are getting poorer despite increasing nominal wages. It kind of boggles the mind seeing people talk about wages in nominal terms like it means anything. The poor and downtrodden will suffer most in the end as a result of the steps necessary to control inflation.
I think it might also be a disability issue. Long covid is no joke and the ONS today announced the UK has 2 million sufferers. Some 1.4 million of those are heavily affected by the condition and many wont be able to work. These people are mostly of working age, that is a very large amount of people to loose in a country with 39 million working age people.
Population growth by birth and immigration in the US has slowed and has been slowing for a long time now. I would be surprised if this had no effect on the labor pool and yet the article doesn't mention it.
The nation's immigrant population (legal and illegal) hit a record 43.7 million in July 2016, an increase of half a million since 2015, 3.8 million since 2010, and 12.6 million since 2000.
As a share of the U.S. population, immigrants (legal and illegal) comprised 13.5 percent, or one out of eight U.S. residents in 2016, the highest percentage in 106 years. As recently as 1980, just one out of 16 residents was foreign-born.
We simply have a larger share of the population that is too old to work, when compared to previous decades.
We’re entering a new era: expect more unions, more livable wages, a lessened quality of life on average, and above all - a higher level of inflation than the last 40 years. There will be winners and losers. If you’re a worker you will be fine, but make sure to take care of your parents.
Also, be sure to keep your parents from voting to secure access to the value created by your labor. Expect to see tons of measures to freeze property taxes, add price controls, and expand exclusive senior benefits they will kick and scream for to keep their purchasing power high at the expense of anyone capable of having a child.
An interesting bit of info was pointed out to me by an acquaintance in the restaurant industry.
Small mom and pop places are losing staff because the big chains can afford to pay their workers more, since they can better afford the losses (smaller profit per site but more sites.)
I'm a huge fan of increasing wages, but I also don't want even more soulless mega chains.
when I visited in my family in Kentucky, the local McDonald’s was paying as much as the Plumbing company and much more than the local manufacturing plant.
I like little stores over chains, too, but the lion's share of little stores are run by small business tyrants with the ultimate goal of turning them into passive income. Your salary is their obstacle.
Big chains can't "afford" losses. If a store is losing money then they'll bring in an experienced manager to turn it around, and if that doesn't work then they'll shut it down.
It's all a housing shortage^ really. If working doesn't get you anything and you still have to be completely dependent on someone then why bother?
There is not a shortage of workers. We have a huge surplus of unemployed young men, they just have no reason to work because the employers aren't offering them anything real.
^This is why I get mad at people that parrot the "deflation is bad because people hoard currency" line. The absolute value of inflation being large is bad because it causes people to stop socializing due to hording. If you have high inflation like we see here people hoard assets. If you can't trade your money for anything its worthless so why would you trade your time for that?
There are two sides to this as well causing a feedback effect.
Young men are also pre-emptively dropping out of the pipeline. 1 male now goes to college for every female.
With record job demand, we are seeing some of the lowest male employment numbers on record.
> We have a huge surplus of unemployed young men, they just have no reason to work
how come they got food to eat, and shelter to live in, and water to drink? They must either be living off savings (their own or family's), or living off taxpayers (some sort of unemployment payment).
In the latter case, they _do_ have a reason to work. Living off the taxpayer is not a long term sustainable mode of living. If they do not choose to work, because the social security is high enough that they can afford to decline work, then what does it say about social security?
But there's no work they can do that would pay them enough to meaningfully change their situation. That's the problem, it's not like their lives are comfortable and they don't want to work (although there probably are some like this.) The majority are stuck. None of these labor jobs pay enough to let them rent shelter so they're stuck with whoever gives it to them. If they went to work they could buy more cheap toys or nicer food but that's about it.
This is why the CPI is a really stupid way to measure inflation. Humans are biological and suffer from the consequences of Liebig's law of minimums. Just because you have a great surplus of something doesn't in any way counteract a shortage of something else.
EDIT: If you have a counter argument then post it, don't just downvote.
>> This is why the CPI is a really stupid way to measure inflation.
>> ...
>> If you have a counter argument then post it, don't just downvote.
Counter - CPI is evil genius. It allows those in the ruling class to print money, inflate assets for the plutocracy and their actual constituents, and all at the same time, pretend nothing is wrong by showing highly selective numbers. Meanwhile, the masses suffer and think it is their own fault -- except it isnt, they have been sold out.
There is nothing "stupid" about CPI -- it is a strategic decision by people who arent acting in the interests of the whole citizenry.
While I feel like the direct cause of the current situation really is a wage shortage, I'm thinking more that the root cause of the situation is how much harder it is to build any value adding business.
The economy is becoming hyper-abstracted, and if you're not a company that can scale on a simple niche, you're pretty much screwed.
Regardless, right now it seem like the symptoms need treatment first, and the only real solution is redistributing money from those earning money from capital-gains and rent-seeking. The US seem to be designed to never do this, so we might actually need a social collapse for something to change.
This analytical quip is well beyond cliche. That doesn't mean it isn't worth writing about, but well... these articles don't tend to try very hard.
The oil shock wasn't an oil shortage in the same sense. The potentially upcoming grain shortage won't be a shortage either. As long as markets are active, you can buy what you want at the price.
Ending the analysis here is silly. There are, very obviously, market conditions where prices spike, plummet, etc. Meanwhile, consumers of goods both overpay and under consume relative to pre-market rates.
For labour, the deeper story is the relationship between labour markets and the macroeconomy. The same reasons for "shock," "shortage" or more technical descriptions exist. Labour supply is inflexible: one worker has one person's labour to sell. They can't "ramp up" and overproduce because prices are high. There are some buffers, but these can be maxed out.
Under the economic norms/theories of the last generation or two, unemployment rates of 5-6% were considered optimal. Employment buffer stock keep shortages at bay, and prices stable. It was considered an anti inflation policy, and probably has worked.
TLDR, full employment is probably inflationary... at least in combination with currently conventional macroeconomic policies.
I recommend everyone who reads this comment to pick up a copy of The Great Demographic Reversal by Charles Goodhart & Manoj Pradhan, a book on the cost-rising effects of aging populations among advanced economies.
A wage shortage does not matter if people have enough money already. This is why we have inflation and low unemployment rates. People don’t need to work because overall they have had more money than they needed. This means we run out of things- everything- because everyone has enough money and the prices of everything needs to increase before people stop buying up the supply of everything. This is a side effect of influx of money put into the system by the fed and by the government. If people have enough money, they don’t need to work and stop working. Prices go up from inflation causing them to start to need money again and start working. So the labor shortage is not due to a wage shortage except in specific industries.
It's because 'unemployed' doesn't mean 'not working', despite what you'd think.
It's a specific subcategory of people who are in the labor market (trying to find employment) and not succeeding.
Higher wages can and do persuade some of them to enter the market, for instance a mom might need a few hours of childcare a week in order to work full shifts, and if the weekly salary raises enough that this pencils out, she'll start applying.
Companies aren’t necessarily advertising these positions to everyone in the United States. You can make the open jobs number look as good as you want but really they’re specific positions that can only be filled by a certain individual.
People who have exited the workforce may rejoin it if the bait is good enough. Gas and used cars cost so much now I wouldn't be surprised if a lot of these jobs are money losing to the people doing them.
I live in a large city with a very low cost of living, median per capita income about $30K. Fast food restaurants are offering starting wages of $15-18/hr (median to above), healthcare, tuition assistance, etc. and can't find people to work. The combination of inflated expectations of their value, government handouts, and being "too good" to work some jobs is the problem. It's not worker exploitation. That's pure Marxist BS. I came from a struggling blue collar household in the Midwest and worked from the time I was 15. Some of the jobs were terrible, long hours, dirty work, etc. But eventually I got to where I wanted to be and subsequently retired comfortably. The bottom line is people need to quit making excuses and whining about their exploitation and apply themselves. Work hard, finish school, learn something useful - gender studies et al aren't, and build a life. You are responsible for your own fate - not anyone else and not the government.
Strict immigration policies during the previous presidency combined with the pandemic have led to record low immigration. Census projections generally expected immigration levels to remain constant. However, immigration plummeted from a net gain of ~1000k/year in 2016 to ~250k/year in 2020[1].
Not true at all. A lot of people simply do not want to work. I know the manager of a Costco, and people come to work on their first day and then leave during their lunch break never to return.
Costco offers great pay and benefits.
The biggest thing people don’t talk about is a lot of workers got paid to stay home during Covid. In essence, they were living like the 1% and got used to it. Now they don’t want to go back to living their pre-covid life but guess what? Everyone can’t be part of the 1%.
People who are used to making betweeen minimum wage and say $20/hr - getting their standard unemployment check PLUS $600 a week? - ya to them that was living like the 1%: staying home and making more than they were making before and doing what they want.
During COVID it was, which is what OP was referencing.
My partner received the equivalent of $75k/year on unemployment to do nothing. Using the standard rule of thumb, that is equivalent to owning ~$1.9M in liquid assets, which definitely puts you in the 1%. They didn't even look for a job until early this year.
That's an interesting graph. 3 of the last 4 times employment rates reached ~80%, the economy almost immediately tipped into recession. The other time, it kept going for 5 years.
Yours is just anecdotal experience from an extremely limited sample, which may not even be true.
> The biggest thing people don’t talk about is a lot of workers got paid to stay home during Covid.
So your take is that because some people got paid for staying at home in the past, _now_ they refuse to pay bills and would rather be homeless than employed? This doesn't add up.
I don't know what Internet hole you found yourself, but a simple Google search shows the exact opposite. A 2020 Business Insider article states "Costco is well-regarded in the retail industry for its high pay and desirable benefits." And it's not all hourly pay, but all the other things too, which include things like guaranteed hours, bonus free memberships (for friends and family), free food and a health care plan that includes vision and dental, 401K, after-hour shopping, etc..
Hell, Wall Street analysts have complained for years(*) about how generous Costco's benefits are to their employees. IMO, those WS Analysts can blow it out their backside; the employee turnover rate at Costco is ridiculously low 6% (**), and blows their competitors out of the water.
I certainly don't work at Costco, but have one relative (2nd cousin) who does, and they know it's a good thing (they bounced around retail for years before landing Costco). Of course nothing is perfect, and how Costco treats the Sampler/Tasters is less than admirable, but I won't let perfect be the enemy of pretty-damn-good.
(*) 2006 NYTimes article
(**) 2020 Business Strategy Hub survey.
Corporations get billion dollar buyouts practically every market swing but its an issue if everyday Americans get a couple thousand over a summer? That's what the issue is?
> The biggest thing people don’t talk about is a lot of workers got paid to stay home during Covid.
The biggest thing people don't talk about is that a very large portion of the population got (and more are still getting) long COVID during COVID (which is still present with a very high infection rates, with vaccines and treatments mitigating acute symptoms—and transmission, in the case of vaccines, but with other control measures abandoned that makes very little real difference), including people whose infection was not immediately symptomatic, which substantially interferes with ability to work, for a period of months.
Article needs a [2021] tag and isn’t of much benefit when read today since the pandemic was still in full force with significant uncertainty if people could even return to work or if “the next wave” was around the corner to lock us all back down.
This author briskly informs me that, no, there isn’t a labor shortage, I “just need to pay more” but later talks up the merits of unemployment benefits that are above the AVERAGE wages of hospitality and leisure jobs (he phrased it negatively/inversely). So yes there is a labor shortage because the government is paying people more money to not participate in employment, and has also restricted foreign work visas. There are good reasons for actions taken back in 2021, but there absolutely was (and continues to be) a shortage of people willing to do what they did the year before. That’s ok. But it is a shortage.
The article also mentions someone who left cooking to become a painter because he got tired of being laid off. I thought that was funny- ask painters in 2008 how things went. Thinking about it, cooking is a job that I pay for (as a customer/diner) in a single transaction. I receive a meal, I pay in cash or maybe 30 day finance and that transaction for effort is no longer fungible. It’s over and done. Painting and construction trades in general, on the other hand, are paid for based on 30 yr financing. It is MUCH easier to commit to pay my painter double what he made 2 yrs ago than my cook, because I get 30 yrs typical to figure out the ROI through the rising tides of inflation. As a diner, $25 is just too much for a breakfast plate consumed today and gone tomorrow, so my diner’s proprietor can’t raise menu prices, can’t automate away cooking, can’t afford staff. It’s an interesting conundrum that I don’t see a solution for, and makes me think that small diners in many markets just aren’t really feasible any more, along with many many other silos of customer expectation and business ventures that were reliant on low skill low wage labor.
When people are in unacceptable work situations, which almost always comes down to (at least seemingly) bad management, lack of respect and low wages, they tend to avoid the issue either by leaving and finding a better place or by trying to level up if they have the guts to change anything at all. Often they try and suck it up, which leads to all kind of issues down the line.
There is another way, which is negotiating and clearly stating one's goals. Workers tend to underestimate a couple of things: Their value, their ability to work out and improve a workplace situation, and often also the ability of their superiors to change perspective and collaborate on moving forward.
And it is understandable. We tend to get taught how to be good worker bees. Reading and writing, math, discipline, shallow/propagandized politics and skills that prepare for work.
But we aren't taught how to negotiate, question authority, organization (the real kind, not the following orders kind), collective bargaining, solving conflicts and compromising as equals etc. These are _essential_ life skills.
Good leaders respect you if you have these skills, they love to solve problems and improve situations. And it can have powerful long term effects on a workplace if you become active. Freedom and power come from realizing that you already have it.