Companies complain about a shortage of labor. Is the complaint real or imaginary?
Shortage of Labor Claims
The Federal Reserve Bank of Atlanta says Some Industries Encountering Worker Shortages
Reuters talks of a World Without Labor ‘Slack’
MarketWatch says Screaming Labor Shortage Forcing Firms to Get Creative to Fill Record Job Openings
Record Job Openings
I discussed record job openings in Job Openings Decline by 284,000 But Still Near Record Highs
In the above link, I discussed fictitious measures.
Case for Fictitious Numbers
Posting job openings on the internet is cheap. This does not mean companies are actually looking to hire.
Some companies want to investigate resumes just to see what’s out there.
Some companies prefer lower-pay foreign workers via the H1B Visa process. They post jobs with more qualifications than they really need to make a case no domestic workers applied.
For low-pay high-turnover jobs, companies keep many jobs open because they expect quits. There were 3.6 million quits in September.
I made the claim “If there really was a shortage of 7 million workers, wages would be soaring”.
Reader Comments
The Realist commented: “No matter how you try to explain it away, there is a shortage of skilled workers. It may be overstated, statistically speaking, but there is still a shortage”.
Pater Tenebrarum at the Acting Man blog replied: “It should be noted though that there is a skill mismatch problem it is a remnant of the malinvestment orgy attending the previous cyclical bubble iteration”.
Who is Right
All of us, in different ways.
The Realist is correct. There is a shortage, but an overstated one.
If there really was a shortage of 7 million workers, I stand by my claim that wages would be soaring.
Pater Tenebrarum made the most critical point. Let me rephrase it.
There’s Always a Perceived Shortage at the Top
