Why America Has a Long-Term Labor Crisis, in Six Charts

21 points by meany 1 year ago | 54 comments
  • Animats 1 year ago
    All those charts look pretty good. “A carpenter now is making 20% to 25% more than they did 24 months ago, and that is not sustainable.” - some employer. This is a feature, not a bug.

    This is the usual employer whine. Can't get exactly the employee they want, right now, where they are, for what they want to pay, without investing in training or guaranteeing long term employment. World's smallest violin plays.

    • ramblenode 1 year ago
      > “A carpenter now is making 20% to 25% more than they did 24 months ago, and that is not sustainable.” - some employer. This is a feature, not a bug.

      If that holds true for the average employee then it's inflation, not a wage increase.

      In that case the losers are people paid in cash, which is most employees.

      • tuatoru 1 year ago
        No, the losers are the people who are not employees: business owners mainly. Hence the whining and throwing of toys out of cots.
        • ramblenode 1 year ago
          If prices keep up with inflation then the business owner is no worse off. They have most of their assets in the business, which is better than cash.
        • fakedang 1 year ago
          The losers are people paid in startup equity while their CEO gallivants about as an "investor".
      • jdkee 1 year ago
        See https://archive.ph/Ovs37
        • JumpCrisscross 1 year ago
          "Labor shortages can be eased by funneling more people into the labor force or making the current workforce more productive. That can be done through immigration; outsourcing more work overseas; tapping underutilized labor pools such as people with disabilities and the formerly incarcerated; and improving productivity through automation, training and refining business and production processes."

          Another underutilized labor pool: parents. Specifically, mothers. Universal childcare couldn't come quickly enough.

          • toomuchtodo 1 year ago
            Surprisingly, “paying existing workers more” didn’t make the list. Businesses are unhappy their margins are going to compress with the go forward cost of labor, and taxpayers are unhappy they’ll have to pay more to compensate workers providing government funded services (healthcare, education, schoolbus drivers, etc). The US has hit its “labor credit limit” and is cranky about it.

            Example: https://www.eastidahonews.com/2023/09/idahos-direct-care-wor...

            > The committee heard follow-ups to a February report issued by the Office of Performance Evaluations that found Idaho’s direct care workforce is short about 3,000 workers compared to national staffing levels. That report identified low pay as an issue for the program primarily paid by Idaho Medicaid, whose rates “do not support sustainable competitive wages for direct care workers,” and create a “wage cap,” the report found. The typical nursing assistant in direct care made $14.16 per hour and could earn 39% more by leaving direct care, the report said.

            There is no labor shortage, there is simply no longer surplus labor (due to covid deaths combined with structural demographics) enabling churn that kept wages low.

            • JumpCrisscross 1 year ago
              > “paying existing workers more” didn’t make the list

              That falls under tapping underutilized labor pools. You're trying to take someone not working and convincing them to work.

              There's about 8% slack in labor-force participation to late-nineties peaks [1]. But per the article, some of that is retirement. It's not a long-term solution to rely on paying retirees to come back into the workforce.

              When an individual company (or state) faces a shortage of workers, it's often due to pay. Idaho should pay its nurses more. When an entire economy faces a shortage, it's something more structural.

              [1] https://fred.stlouisfed.org/series/CIVPART

              • toomuchtodo 1 year ago
                As long as there are workers 18-65 who are willing to work at a clearing price who aren't currently working because that price isn't offered, there is labor available. Agree relying on retirees to remain in the workforce isn't a long term solution; there is no long term solution when you've built your economy on an ever expanding labor force that is no longer ever expanding. The data does not show we are out of workers entirely, but there are jobs workers are unwilling to take at the current wage on offer.

                Will we face a structural labor shortage causing unreasonably low unemployment rates and labor marketplace friction in the near term? Very possibly depending on 55+ workforce exit rates and immigration flow. Are we there yet? I don't believe the data shows that.

              • syndicatedjelly 1 year ago
                > There is no labor shortage, there is simply no longer surplus labor (due to covid deaths combined with structural demographics) enabling churn that kept wages low.

                There are a number of mental hoops that one must jump through for this statement to make any sense. A lack of surplus labor is what exactly, if not a labor shortage? How is a high supply not the exact same thing as a labor surplus?

                • peyton 1 year ago
                  It’s about proximity to the money printer unfortunately. Triffin dilemma. Like it or not, we’re not sending cash to nursing assistants in Idaho. If they wanted more money, they could’ve flipped houses in 2020–2022.
                • friend_and_foe 1 year ago
                  Please god no. We went through this already, it halved wages and made single income households a luxury. I personally don't want some stranger raising my kids for me, I want it to be me and my wife doing it. I don't want to delegate rearing of my children to the state, looking at educational attainment in aggregate, they're really bad at it. I don't care about a labor crisis, I care about my family. If wages go up, good. You're not taking my wife and making her your secretary or putting her on a factory floor to keep my pay down.
                  • JumpCrisscross 1 year ago
                    > I don't want to delegate rearing of my children to the state

                    Okay? Then don't. Universal doesn't mean mandatory.

                    Are you suggesting we should reverse womens' rights in the workplace so you can keep a particular family model?

                    > If wages go up, good.

                    Wages don't go up infinitely. They go up, then you run out of workers, and raising wages further doesn't bring more labour to the table. At that point, you cut services and increase prices to temper demand.

                    • Danjoe4 1 year ago
                      Bad faith interpretation. Clearly there are benefits to having a parent dedicated solely to child rearing. I do not think a daycare is the optimal environment for child rearing. The issue here is not women's rights but the responsibility we have for our children.
                      • waynesonfire 1 year ago
                        > Wages don't go up infinitely. They go up, then you run out of workers, and raising wages further doesn't bring more labour to the table. At that point, you cut services and increase prices to temper demand.

                        wow, what a great problem to have. how common is it to encounter this issue? Amazon warehouse workers? Did they increase wages?

                        • uoaei 1 year ago
                          > Then don't. Universal doesn't mean mandatory.

                          Ah yes, the market fundamentalist argument of "market forces don't actually affect you". Wonderful, amazing, very good-faith.

                      • WalterBright 1 year ago
                        > Universal childcare couldn't come quickly enough

                        That requires more workers to care for the kids.

                        • magicalhippo 1 year ago
                          Right, but at least here in Norway the rule[1] is that in kindergartens there should be one adult per three kids under 3 years old, and one adult per 6 kids above three years old. There's also requirements for pedagogical staffing so it works out to be a bit more than that, but not much.

                          Following such a scheme, on average you free up more workers by sending kids to kindergarten.

                          [1]: https://lovdata.no/dokument/NL/lov/2005-06-17-64/KAPITTEL_6#...

                      • fred_is_fred 1 year ago
                        Paradoxically the Republicans in this country hate both raising wages for workers and immigration. The result is a labor pool issue in the end.
                        • pauldenton 1 year ago
                          Almost like the Paradox of wanting open borders and higher minimum wages. The result being California, and the urban cores of Seattle, Portland, and Chicago
                        • 1 year ago
                          • nine_zeros 1 year ago
                            Labor exists, just not at the wages offered by employers.

                            Unsurprisingly, none of the solutions involve lower share of income for execs and shareholders in favor of larger share for workers.

                            • graeme 1 year ago
                              Low value comment. This article is talking about the size of the labor force. That has not grown as quickly in recent years due to an aging population and other factors.

                              Tautologically at a certain wage you could convince the elderly and children to work but that’s not really useful compared to have a larger working age population.

                              • JumpCrisscross 1 year ago
                                > Labor exists, just not at the wages offered by employers

                                Source for the labor existing without immigration? There are tens of millions of people retiring compared to turning eighteen. Increasing pay should increase labor force participation a bit. But it doesn't solve the fundamental demographic problem.

                                • vegetablepotpie 1 year ago
                                  If people are living with their parents later in life, and putting off purchasing housing because of cost [1] this could have non-insignificant impacts on successful courtship and reproduction.

                                  [1] https://www.businessinsider.com/millennials-living-at-home-a...

                                  • fakedang 1 year ago
                                    To be fair, that's not an argument on solid footing. Sure, courtship will be affected but with time, things will change and living with your parents will be seen as the norm, as it was with the baby boomer generation (honestly, why did that trend change? Idk). I've heard enough stories of grown boomers living with their parents and picking up their grown up dates from their parents' homes, in an elaborate courtship ritual that would sometimes involve her parents too.
                                  • gretch 1 year ago
                                    Why does it have to be without immigration? GP didn't say that...

                                    Plenty of people want to come to the US btw, if you look at all the people coming over the southern border illegally. We just need programs to help those people do it legally, distribute them across the country (instead of concentrated in border states) and help them get acclimated to american culture.

                                    • JumpCrisscross 1 year ago
                                      > Why does it have to be without immigration?

                                      The comment argues labour shortages are a fiction used to drive down wages. Immigration solves a labour shortage by driving down (or stabilizing rising) wages.

                                    • midoridensha 1 year ago
                                      A lot of jobs don't really need to be done. They're only done because there's some demand for them. If wages increased in other places, workers in lower-paid jobs could be drawn away from those jobs, and those businesses can either adapt to less labor, or shut down. An example of this is restaurant labor. Restaurants in the US have an enormous number of workers per customer; it's a big reason why it costs so much to eat out there. Americans seem to expect to have a server constantly hovering over them.

                                      If wages for other jobs increased a lot, servers could be enticed to leave the restaurant industry, and go elsewhere. No one really needs waiters. Customers can instead go to the counter and order themselves, and pick up their own food (this is usually called "counter service"). Eliminating all the servers in the US would free up a LOT of labor for more important tasks. This is just one example. People paid to pump gas at full-service gas stations is another (which has largely disappeared, except in two states, NJ and OR).

                                      • JumpCrisscross 1 year ago
                                        > servers could be enticed to leave the restaurant industry, and go elsewhere. No one really needs waiters. Customers can instead go to the counter and order themselves, and pick up their own food

                                        You're describing totally different modes of dining. That said, this is probably the direction we're heading: servers will make more. And dining out (actual dining out, not fast casual) will become more expensive.

                                        That said, you have a point. We have a lot of make-work jobs. cough cough TSA. We also have a lot of jobs that look likely to go away to automation, e.g. long-distance trucking and certain warehouse roles. So maybe this balances out on its own without consumer prices rising too much.

                                        • 1 year ago
                                      • WalterBright 1 year ago
                                        If there are 100 workers and 200 jobs, those workers will take the highest paying 100 jobs. The other 100 openings go unfilled.
                                        • xnx 1 year ago
                                          Quantities are not fixed. 1 worker could take 2 jobs (either by working more or harder) if the pay was a sufficient motivator.
                                          • WalterBright 1 year ago
                                            There are only so many workers and so many hours in the day. More pay won't fix that.
                                        • baybal2 1 year ago
                                          [dead]
                                          • stkdump 1 year ago
                                            I see it the other way around. Few people say: I don't work (or work less), because work doesn't pay enough. Everyone has to cover their own cost of living. On the other hand, plenty of people would actually work less, if they make enough per hour to cover their costs (or if they had enough saved up/passive income). There is a whole subculture around that, from four hour work week to lean fire, etc.