Submitted by Taps Coogan on the 30th of December 2017 to The Sounding Line.
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Despite the constant parade of news articles (here, here, here, etc…) warning of an ‘increasingly dire labor shortage’ in the US, and despite the incessant touting of America’s very low unemployment rate, the percentage of working age Americans that are working (the employment-to-population ratio) is lower than at any point from 1985 until 2009 (for a discussion of how this can be, read this). Contrary to the prevailing sentiment, the United States simply does not have a labor shortage. Rather, the United States has a shortage of people willing to work for current wages. The two things are not the same. Excluding those over 65 years old and those with disabilities, there are roughly 58 million working age Americans who are not working. That is roughly equal to the combined populations of both Canada and Australia. If just 11% of these people rejoined the workforce, they could easily fill the roughly six million open jobs in the US.
Inflation adjusted household income in the US has only risen 0.06% since 1999. Meanwhile, the cost of the things average families spend the vast majority of their money on (gas, food, heating, housing, healthcare, and education) has risen many times faster than the useless official inflation rates. As we discussed here, it takes the median family twice as many years of actual work to afford a median house as compared to the late 1960s. People have been ground up and discouraged by decades of stagnant wages, rising prices, and disappearing middle-income industrial jobs. Unsurprisingly, enrollment in the various US welfare programs has swelled.
If companies are having a hard time finding labor, they will need to try the one thing that they have apparently refused to do for 20 years. Aggressively raise real wages. When they do, there is the best part of 58 million healthy working age Americans who need to get back to work.
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With employee compensation for full time work just barely outperforming gubermint free stuff there is no will to work for many of today’s young adults.
Agreed. The biggest declines in labor participation are among the 16-55 age groups.
They’ve been raised and ‘educated’ (indoctrinated…) to believe that government is the source of all things necessary for life: Food, shelter, education, medical care, free phones & internet, transportation, disability payments, retirement, etc.
Viz., more and more ‘free stuff’ but… paid for by who? Why, those racist, white, capitalist elites.
Thatcher said it best and most succinctly:
“Socialism is great… until you run out of other people’s money.”
You watch too much MSM. First of all, most Millenials hate the government and big business. Second of all, they face the toughest job market since the late 1920’s. They face the highest debt, the lowest wage, the highest house prices EVER. They are permanent renters, trying desperately to make ends meet. They have college degrees, yet the only jobs for the non STEM majors is retail and bartending, hardly jobs worth doing (no career, no promise of higher pay, and require living nearby in a city – which means high rent costs). If you actually bothered to analyze the… Read more »
Perhaps you are confusing the terms “prevailing wage” with “minimum wage”.
Prevailing wages are those paid to workers on projects involving government contracts or using tax money as funding. These wages are generally above average wages for the trade involved…ie union scale pay or thereabouts.
Perhaps the term has more specific connotations than I intend, so I removed it. Thanks for the comment. Workers on government projects are paid prevailing wages, but prevailing wages are not simply the wages paid for workers on government projects. Prevailing Wages should be wages and benefits paid to the majority of workers in a given field. Sometimes the government is overly generous when determining what it will pay as ‘prevailing wages’ but that is a separate issue. I mean common wages across a range of payscales, not just minimum wages. If employers can’t attract employees, whether minimum wage or… Read more »