Home > Uncategorized > Scarce workers?

Scarce workers?

from David Ruccio

fredgraph

Readers know the old adage: in this world nothing can be said to be certain, except death and taxes.

And, we should add, employers complaining they can’t find enough good workers.

The fact is, if workers were really scarce, their wages would be rising dramatically. That’s how things works in a capitalist labor market: employers who want to hire workers offer higher wages.

But, according to the latest report from the Bureau of Labor Statistics, average hourly earnings of private-sector production and nonsupervisory employees increased by 4 cents to $21.84—and weekly earnings by $1.34. That’s an annual rate of just 2.1 percent, the same as the rate of inflation. 

Workers’ wages continue to increase at a very slow rate because the situation is exactly the opposite of what employers claim: workers are not scarce, they’re abundant.

fredgraph-1

While the official unemployment rate (the red line in the chart above) was 4.8 percent in January, the expanded (or U6) rate—which includes marginally attached workers and those who are employed part-time but prefer full-time jobs (the green line in the chart)—was a much higher 9.4 percent.

fredgraph-2

Meanwhile, the civilian employment-population rate (the ratio of total civilian employment to the civilian noninstitutional population or, more simply, the portion of the adult population 16 years and older that is employed) was still below 60 percent—and thus far less than its pre-crash peak (in December 2006) of 63.4 percent.

There are in fact plenty of potential workers out there—in the labor force and in the larger working-age population. But employers would rather complain than pay higher wages to hire them.

  1. February 7, 2017 at 6:14 pm

    I agree and disagree. Workers really are scarce at the upper end, and software jobs that would have paid $150k a year 10 years ago are likely to pay $300k today, but these are jobs in which one exceptional individual can handle the work of several average individuals because they do what very few can.

    This article contains a very valid criticism, but, for example, Universal Basic Income would attack this problem directly whereas limitation on H1B visas would likely decrease ability to produce without a corresponding increase in ability to consume (we are consumption limited, but in tech, limiting ability to produce is very dangerous because it has unique ability to export success it is likely that it is doing more to decrease our trade balance on the exports side than it is to increase our trade balance based on the increase in inequality.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s