America is pushing the labour market to its limits

https://www.economist.com/finance-and-economics/2018/09/15/america-is-pushing-the-labour-market-to-its-limits

by rbanffy • 8 years ago

165 207 8 years ago

sparkling2• 8 years ago

If someone from the Economist tech team happens to read this: i had to click away 4 different nag pop-ups before i was able to even read the articles headline. Cookie consent (thanks EU), some user experience survey, a newsletter sign up, and a overlay ad for your paid subscription service. Stop this bullshit, it is unacceptable.

matkins• 8 years ago

Perhaps your ad blocking extension is not correctly configured? I didn't see any of that, but I've enabled additional lists (they come by default with uBlock Origin, just not enabled; you merely have to mark a few checkboxes.)

sparkling2• 8 years ago

By "popup", i dont mean a extra browser window, but in-page overlays

korm3• 8 years ago

The state of news sites is well known to everyone on HN. It's not nice to have this same comment pop up every time instead of discussing the article.

There are article outlining services and add-ons you can use. I really don't mean to offend, I just think it would be better for HN if this wasn't one of the first comments on every thread.

rusk• 8 years ago

There are article outlining services and add-ons

But - should all this extra gear be necessary? It's fine for you and me, and everyone else here who understands all this stuff but what about the rest of the general population?

I think GP's point is fair, if you view it as constructive feedback rather than a criticism of the publication. I personally enjoy the economist but tend to steer clear of the online experience.

Now that's me, who is knowledgeable enough to work around the various glitches. What about the rest of the potential readership. This poor quality of execution is costing the economist circulation, therefore advertising revenue, and probably potential subscribers.

aikah• 8 years ago

The state of news sites is well known to everyone on HN. It's not nice to have this same comment pop up every time instead of discussing the article.

This is a technology website, I find UX discussion pretty relevant since all these news sites have horrible UX, and it should be pointed out each time they fail at basic UX. They don't need 50 nag screens. They could put most of them on the side or the top of their page, including GDPR notices. The reason why they use these invasive and annoying nag screens is that browsers ended up blocking all these annoying window based pop ups at first place.

Online news media just can't learn their lesson.

qubax2• 8 years ago

I disagree. I get that there are a lot of media employees here, but it would be better if people stopped defending such practices.

And it isn't every thread. It's usually the most egregious examples that people point out.

pwg• 8 years ago

In my case, with NoScript blocking all javascript (and cookies also blocked) I got the full article appearing with no nag pop-ups (the nag pop-ups are almost always javascript based) or any other irritant. The article was fully readable, and mouse wheel scrolling worked perfectly to scroll through the full text.

So you have the ability to "stop this bullshit" yourself, at least for the Economist's current page design.

ktosobcy• 8 years ago

If you are on Firefox: https://addons.mozilla.org/en-US/firefox/addon/in-page-pop-u...

eafkuor• 8 years ago

Stop this bullshit, it is unacceptable.

You are getting a free article, having to put up with those popups seems acceptable to me

Sir_Cmpwn2• 8 years ago

That's not how the power dynamic works. The Economist is being given advice which will keep sparkling reading their content. They can live without the content, but the Economist cannot live without readers.

qubax2• 8 years ago

It's not free. People are paying the economist with their time.

kentosi• 8 years ago

You know what's worse? I actually paid to become a member last week and I STILL see ads!

A HUGE banner ad up the top and two big ads along the right hand side. Guess who'll be cancelling his fledgeling subscription?

megaman83• 8 years ago

I wasn't even able to get to the article without using copy and paste trick to view the darn thing in my text editor.

rtisdale3• 8 years ago

These articles are almost always based off the wonderfully misleading U-3 statistic instead of the U-6.

https://www.investopedia.com/articles/investing/080415/true-...

The U-6 unemployment rate is nearly double that of the U-3 and is currently at 7.4 percent

https://www.macrotrends.net/1377/u6-unemployment-rate

There haven't been any major gains to wages since the 80's except for high wage workers, who have seen a nearly 35% increase.

Page 4 for table.

https://fas.org/sgp/crs/misc/R45090.pdf

If the unemployment rate is so low why have we seen so little gain to our wages in the past 40 years?

The issues are greater than just faffing about with the unemployment rate but learning to spot this sort of trickery and call it out is important.

Here is a great article on Forbes that goes into some of the reasons why this is the case.

https://www.forbes.com/sites/teresaghilarducci/2018/07/18/wh...

dalbasal4• 8 years ago

There are plenty of good reasons to use alternative unemployment metrics. The one that's usually used (the "official one") is outdated, and mostly useful for estimating the type of unemployment that impacts running costs of unemployment assistance programs. It isn't the best for telling us how many people are working, or as a general labor market health indicator.

That said, it isn't a conspiracy. U6 is probably better as a general indicator. I personally prefer employment/population for each age brackets, fwiw. But... since these correlate, the trend is the same. U6 is always about double u3. Both are lower than they had been. The "structural" threshold for u6 is also double u3.

mifreewil5• 8 years ago

Even more interesting is the long-term trend of long-term discouraged workers. This doesn't seem to be recovering anytime soon, if you believe SGS - http://www.shadowstats.com/alternate_data/unemployment-chart...

blackhaz• 8 years ago

But wouldn't comparing U6 to U3 be misleading? U6 has always been a double of U3, more or less. Right now U6 looks like U6 in the late 90s.

AmericanChopper9• 8 years ago

If you want to talk about the economy’s ability to generate jobs, then U3 is the best metric. U6 contains everybody who chooses not to look for employment for whatever personal reason, whether they’re discouraged or simply just don’t really need or want a job.

rtisdale3• 8 years ago

It's about what each of these statistics measure.

As another user mentioned, the U3 is a very narrow definition that is largely useful for measuring the cost of unemployment benefits, it does not give a true idea of the real unemployment rate.

This article goes into the differences and their relevance

https://www.investopedia.com/articles/investing/080415/true-...

The U-3 unemployment rate is a comparatively narrow technical measure that leaves out a whole swath of out-of-work people who are willing and able to take a job but who don't fit the narrow BLS definition of "unemployed." For example, a stonemason who wants to work but who has become discouraged by a lack of opportunity in the midst of a deep economic recession would not be included in U-3 unemployment. A marketing executive who is laid off at age 57 and stops scheduling new job interviews due to her experience of age discrimination would not be included in U-3 unemployment. A person who only works one six-hour shift per week because no full-time jobs are available in his area would not be included in U-3 unemployment.

bjourne3• 8 years ago

No, U-3 is not misleading. See the discussion at https://news.ycombinator.com/item?id=17475481 The point of metrics is to make them comparable. Comparing apples to apples, the US unemployment rate is 3.9% vs the EU average at 7.1%. If you want to use U-6 instead, you can make an orange to orange comparison and get 7.4% for the US and roughly 14% for the EU.

Given that EU wages have increased much more than US wages we can conclude that unemployment has very little to do with wage increases. And since empirical evidence trumps conjectures, we throw the so called "law" of supply and demand into the garbage bin.

shawn• 8 years ago

And since empirical evidence trumps conjectures, we throw the so called "law" of supply and demand into the garbage bin.

Would you mind expanding on this point? It wasn't supported by your other assertions, and I'm curious how such a counterintuitive conclusion might be true.

rtisdale3• 8 years ago

No, U-3 is not misleading.

The U-3 is exactly what it's defined as. In that sense, it isn't misleading.

It is misleading in the sense that it does not capture what unemployment actually is as it's a very narrow definition of unemployment.

Given that EU wages have increased much more than US wages we can conclude that unemployment has very little to do with wage increases.

We can conclude from this that it may not be the only factor affecting wages, though I never made that claim to begin with.

brightball• 8 years ago

You're dismissing supply and demand a little too quickly with a broad stroke.

When it comes to workforce, the supply is directly related to the supply of people able to do a job. Across the entire country, a job that requires little to no training to do will enjoy a much larger supply of workers than a job that requires more skill and experience.

Then there are other factors that essentially cap wages by limiting the cost of a service, such as insurance. Auto insurance, for example, largely dictates the compensation level for repairs and consistently gets tighter and tighter. This means that no matter how effective you are as a mechanic, the business paying you has a limit on how it defines your value because it can't opt to simply charge more for your work.

This applies to other industries as well.

If wages are the "price" in the supply/demand formula, price fixing has to be taken into account.

realusername• 8 years ago

Given that EU wages have increased much more than US wages

Where exactly? Surely not in western Europe, it's stagnating since the 80s. In the former soviet bloc for sure I agree.

tzs• 8 years ago

Given that EU wages have increased much more than US wages we can conclude that unemployment has very little to do with wage increases.

No, we cannot. Unemployment and wage increases could be perfectly positively correlated and still be completely consistent with EU wages rising faster in the US when the EU unemployment rate is twice the US rate.

All we can conclude is that the EU unemployment rate to wage increase function is not the same as the US function, so that a given level of unemployment does not result in the same rate of wage increases in the EU and the US.

There are huge social safety net differences between the EU and the US that might affect how urgent it is for an unemployed person to find a job, and so could affect what employers have to offer to get workers.

In the US, being out of work is a major disaster for many people. If you are in a state that has not expanded Medicaid, you may not be able to afford even the cheapest health insurance for more than a short time with no money coming in if, like many Americans, you do not have much in savings.

conanbatt3• 8 years ago

Given that EU wages have increased much more than US wages we can conclude that unemployment has very little to do with wage increases. And since empirical evidence trumps conjectures, we throw the so called "law" of supply and demand into the garbage bin.

One could argue that the reason wages increased in the EU is because it restricts the supply of workers. For example, strong unions could explain that.

Its like you are saying a helium balloon float and conclude gravity has been disproven.

PurpleBoxDragon• 8 years ago

we throw the so called "law" of supply and demand into the garbage bin

This is like throwing away the law of conservation of energy because you found a perpetual motion machine instead of checking inside the machine for batteries.

For example, are we considering how the impact of workers too scared or financially unstable to leave their current job impacts supply? Or how outsourcing jobs, hiring people who can't legally work, and other such changes impact supply?

syshero• 8 years ago

U-6 is following similar trend as other Unemployment indicators. It was relatively high in the last decade.

What is your point? It is relatively high but falling.

neffy• 8 years ago

Exactly. The other gotcha with US unemployment is that you need to add about 2% to compensate for the incredibly large number of people stuck in prisons, compared to other countries. Approximately 0.7% of the population is behind bars, and most of them are working age.

notfromhere• 8 years ago

theyre not unemployed because theyre not in the workforce

bradleyjg2• 8 years ago

There haven't been any major gains to wages since the 80's except for high wage workers, who have seen a nearly 35% increase.

Chart employment costs in addition. Notice the huge divergence between the growth in what employers are paying and what employees are getting in wages. Figure out where that money is going and you’ll have the real answer. Though you may not like it.

sillypuddy• 8 years ago

Link, or way to do that?

sailfast• 8 years ago

The cost per employee for benefits is definitely a key reason why full time / full benefits wages have stayed relatively level. It's been hidden as well since folks don't normally understand how much their employer has to pay for their benefits. The book Catastrophic Care by Goldhill has a good take on this in my opinion.

That said - there is a reason to be optimistic about all of this. If this demand pressures pushes to increase wages it might provide enough of an incentive to create room for real reform here, as well as transparency around what is happening with benefits that could spur longer-term cost control fixes.

nabla9• 8 years ago

There haven't been any major gains to wages

How about unit labor cost?

unit labor cost is the ratio of total labor compensation per hour worked to output per hour worked (labor productivity).

mdorazio2• 8 years ago

My issue with U-3 isn't that it's misleading in the statistical sense, but that it says absolutely nothing about the quality of jobs that people have. If every software engineer on HN was fired tomorrow and given a minimum wage job at McDonald's, U-3 would be exactly the same. It's not really a meaningful statistic anymore when talking about actual economic health of workers unless you pair it with several other metrics.

What I'd like to see is a metric of Quality Jobs that we can compare over time. Something like % of people working at least 35 hours a week at a single job that provides basic benefits and a living wage in the local market for a single worker.

mifreewil5• 8 years ago

The Federal Reserve has been raising its benchmark interest rate since December 2015, and will probably do so again this month, from a range of 1.75-2% to 2-2.25%.
This is the central banker’s version of twiddling the bath taps, but on a national scale. It requires a delicate touch. Too much cold water, in the form of higher rates, will choke off demand and hence jobs. Too much hot, and rising inflation will eat away at people’s spending power. The aim is to find the perfect temperature, where employment is as high as it can be while inflation stays subdued.
It is as if the rate-setters must adjust the flow of hot and cold water not only without knowing what temperature is most comfortable, but also without knowing how hot the bath is to begin with—or when they will be getting in.

Reading this, you'd swear we were living in a communist society where academics and policy makers are smart enough to centrally plan the economy and to guess what the price of the most important thing in our civilization should be - money.

AmericanChopper9• 8 years ago

Controlling the supply of money is all the Fed is doing here, which is nothing even similar to central planning.

spectrum1234• 8 years ago

There is no free market on the price of money. This is exactly central planning.

nickik• 8 years ago

If you have a Fiat money then you must have a control mechanism.

But not doing anything is just as much a centrally planned policy in a fiat money system as doing a lot of stuff.

And just btw, if you actually study economic history you will see that the monetary system before fiat central banks also adjusted monetary supply just threw a different mechanism.

I would prefer something different then the Fed. And a more clear set of rules what they should do and when.

prolikewh0a4• 8 years ago

you'd swear we were living in a communist society

Communism has no money though? Time to read what Communism actually means!

maerF0x07• 8 years ago

In my experience nearly everyone who is against communism means communism as we've seen it practiced in the 20th century. Not communism as ideally described in books.

beat2• 8 years ago

You realize that the very premise of Wall Street is in large part "guess the price of money".

mifreewil5• 8 years ago

Yes, the opposite of the Fed, who tries to influence it through their special privilege of monetary policy.

xg157• 8 years ago

What I find remarkable about this kind of articles is how a situation in which economic activity and employment is going so well that the labor market might shift in favor of employees/workers is described as "the economy is running hot", a self-evidently bad state that sensible economic policy should seek to avoid.

I'm kinda baffled by that. I'm no economics major, but this seems to imply that keeping wages low (or at least decoupled from economic growth) is actually a goal of economic policy. Is that true?

Arnt• 8 years ago

Policy seeks to increase the pay of the employed and reduce the unemployment. Increasing pay increases unemployment in principle, but the the bond between the two is fickle and difficult to predict. Sometimes it's an extremely weak bond, sometimes it's strong. Its precise strength is difficult to pin down even with hindsight.

AmericanChopper9• 8 years ago

There’s nothing bad about a ‘hot’ economy. It simply presents a different set of challenges that haven’t really been an issue for quite a while.

Rising employment means rising inflation, to reduce inflation you increase interest rates, but if you do that too much you’ll slow down growth, and if that happens employment will slow down.

I think you really could have benefitted from reading the article.

lotsofpulp2• 8 years ago

It’s bad if it gets so hot that defaults start happening and cascading through the system. Loans are given based on expected future revenue and costs, and if they start going varying too much from expectations, then defaults start happening, and if too many happen, then it can start cascading through the system.

Overall wages, especially at the low end, are typically last to increase because people don’t hop around jobs as much as they should and the social element makes it look bad if people ask for too many wage increases (e.g jobs) too quickly. Whereas prices for capital (land, commodities, equities, equipment), are allowed to rise and fall as quickly as the market allows so capital owners get to reap those gains while wage earners get “stretched”.

codelord5• 8 years ago

I think there's too much focus on raising wages. While that's not really the way to improve the situation for low incomes. One should seek to raise the buying power. A stronger dollar, can mean higher buying power for imported products. Keeping the inflation low is also as important as raising wages. Another positive factor is increasing the productivity. The more you produce, means there's more stuff for everyone to buy and that drives the prices lower.

dalbasal4• 8 years ago

Remember that for most below average households, not much of their expenses aren't currency dependant. Housing, transport, education, food...

isolli2• 8 years ago

That's misleading. Economists follow real wages, which take inflation into account.

foota• 8 years ago

Is there any reason to prefer those over policies that result in shifting income down?

cdash• 8 years ago

Actually the focus should be on increasing household discretionary income. The part of a persons income that is left over after all the mandatory expenses of food, shelter, tax etc are taken care of.

xg157• 8 years ago

One should seek to raise the buying power.

This sounds an easily defeatable measure. If I'm a politician and encourage the economy to dump all kinds of cheap, low-quality crap onto the market, I will, on paper, have greatly boosted the buying power of low-income households - except not in a way that will be helpful for them: They will have choice between an enormous range of cheap products, except they will all be low-quality and likely not what the members of the household are looking for.

A stronger dollar, can mean higher buying power for imported products.

See other post. Additionally, this does not cover products or services you can't import, e.g. housing.

The more you produce, means there's more stuff for everyone to buy and that drives the prices lower.

Except a lot of that stuff is not actually produced for the domestic market but exported. Also, between "we produce more" and "we lower prices" there are usually several layers of management who decide how to price products, which costs to pass on, which products to sell at a loss and which products to sell with a margin.

The lower your disposable income, the more your life will depend on that kind of strategic decisions, independently of what products you're able to buy at any particular point in time.

Applejinx• 8 years ago

Yes. The interests of humans are not the interests of capital, and the purpose of the economy is to maximize capital.

dalbasal4• 8 years ago

Ermm...not exactly. The relationship between median wages, marginal unemployment and "hotness" is not causal, it's just expected to correlate.

There isn't an overall agreement on what "too hot" is, but to generalize a "conservative" perspective it'd be "mal-investment," investments chasing an overavailability of money that will "sow the seeds" of future market crashes.

xg157• 8 years ago

I haven't heard that definition of "hotness" yet. This sounds interesting. Thanks.

isolli2• 8 years ago

Tangentially related (2014): http://cepr.net/blogs/beat-the-press/wage-price-inflation-an...

"Thanks to the eccentricities of Alan Greenspan, the Fed did not raise interest rates. Instead it allowed the unemployment to continue to fall. It fell below 5.0 percent in 1997, it crossed 4.5 in 1998, and reached 4.0 percent as a year-round average. And inflation remained tame. The result was that millions of people had jobs who would not have otherwise. Tens of millions of workers at the middle and bottom of the wage distribution saw substantial real wage gains for the first time in a quarter century."

conanbatt3• 8 years ago

The concept of "hot in economics" relates to inflation. If you spur people to spend above their productivity prices rise eating away at the gains.

Another interpretation of "hot" is the over-utilization of capital. When you over-utilize capital, its productivity increases are short-termed because the capital has to be refurnished which means in the future you will have a slump.

In economics, there is a proverbial equilibrium that all situations tend to go to: forcing it to move around often has more negative consequences than positive ones.

eli_gottlieb2• 8 years ago

I'm kinda baffled by that. I'm no economics major, but this seems to imply that keeping wages low (or at least decoupled from economic growth) is actually a goal of economic policy. Is that true?

Well yes. Today's policymakers were mostly taught to work under the assumption that stagflation occurs if you explicitly target wage increases, as policymakers prior to the '70s sometimes did. They're fighting the previous war, so to speak, since their policies brought about a deflationary crisis.

JDWolf• 8 years ago

Thank you, I think that economics has some very bizarre notions. The over-use of aggregates such as GDP, inflation, and Dow Jones levels frustrates me. It would be nice to have charts that show distributions of these types of measures rather than averages or weighted averages.

Animats• 8 years ago

I'm kinda baffled by that. I'm no economics major, but this seems to imply that keeping wages low (or at least decoupled from economic growth) is actually a goal of economic policy. Is that true?

It's an inherent goal of capitalism to keep costs down. Wages are a cost. From a capitalist perspective, wages should be just above survival level. In the absence of political or labor organization pressure, that's what happens.

pjc50• 8 years ago

People will no doubt argue over why this is, but to me it seems readily traceable to Trump's implementation of classic Keynsianism:

https://www.marketwatch.com/story/john-maynard-trump-preside...

Traditional ideological Republicans hate this, but given a choice between ideological consistency and power Republicans will pick power every time.

https://eu.usatoday.com/story/opinion/2018/08/20/donald-trum...

Is this tax cut for the rich accidentally a populist measure? Is that why the labour market is growing but wages aren't rising?

ainiriand• 8 years ago

I think that the trend has been like this for a long time...

tabtab3• 8 years ago

We need something like the "balance budget amendment". The problem is nobody will vote for it because it can slow the economy in the short term, hurting their re-election. Such a bill would have to kick in gradually to be backed by representatives, perhaps over say a 20 year period. It should also allow for stimuluses during slumps. If the budget is balanced via good-times, then there should be enough spending margin for the bad times.

prolikewh0a4• 8 years ago

Wages haven't risen for the bottom 60% of the country since the late 60's, early 70's. This is of course continued by Trump, but he isn't the cause.

jayalpha• 8 years ago

I had tremendous problems finding a job with a background technology (STEM PhD) in the states. In the end I had to leave to China. If you look for a job here they ask you "Can you start tomorrow?" They mean it. Nobody can afford a 1st, 2nd, 3rd etc. interview here since they know other will ask the same question. For my first real job here a company screwed around two months with the contract. When they were ready I was long gone from the job market. Impossible here.

Is it like this now in the states?

prolikewh0a4• 8 years ago

Everything is contract work in technology now unless you're a software engineer. They do exactly the same things. It's cheap exploited labor.

joezydeco• 8 years ago

In the last 18-24 months I've seen a huge uptick in software positions are are C2H, not full-time salaried.

tabtab3• 8 years ago

US companies tend to value post-graduate education less than Chinese companies. From a US perspective, the reasoning is that post-graduate education focuses too much on theory instead of delivering practical products soon. The flip side is that many criticize US companies for taking a short-term view of R&D, not allowing enough time for tricky ideas to develop. I won't take sides here, only state that you may be facing cultural differences on the value of education.

joncrane• 8 years ago

What nationality are you?

PhD level work is not taken lightly; the pay is very high and companies don't want to waste a recruiting cycle on a bad fit.

Various companies do various ceremonies around hiring. I would say the shortest cycle would be:

1) Recruiter sends unsolicited email 2) You reply and set up a time 3) 20-minute chat with recruiter 4) Send resume to recruiter 5) In-person interview 6) Offer letter

This is SUPER abbreviated. In most cases there would be a 4.5 which is a phone screen by hiring manager.

duxup7• 8 years ago

It's frustrating reading about how hot the labor market is compared to my personal experience.

I worked in a technical field with a number of very skilled, very good people. These are guys you can tell "hey we need this fixed" and they're capable of learning what is needed to do the job with very little hand holding, and they're great teammates too. At their job they were highly valued people and well paid. An acquisition and layoff occurred and many had trouble finding jobs, everyone who did find a job is making less now.

You see tons of jobs out there on websites and even "desperate" listings, but the hiring process takes forever, and these guys just don't get hired. Something seems off.

These aren't guys with traditional backgrounds, mostly "tech school" types, but they've got decades of experience and are very capable. The folks I worked with were mostly hired under the idea that heir resume showed they were capable and could learn, but I don't hear anyone talk about that anymore. The hiring process seems to demand only people with EXACTLY the skills listed no matter how absurd the list, and employers would rather gripe about not hiring anyone than actually hire someone. Nobody wants anyone to learn anymore or take the chance on someone having to learn.... even if the job would seem to require it. It's a nasty combo of the market changing quickly and seemingly the market demanding only exact qualifications.... you can't have both.

I decided to change careers and move into web development. Needless to say that was a pay cut but I was ok with it as I am changing careers (and I really enjoy the work). The process of looking for a job was brutal. It felt like there was an artificial filter of recruiters and HR whose job it was to delay hiring and filter out all but what they imagined was a perfect candidate... but they don't tell you who that is, and honestly those folks have no clue what the day to day job even IS. It's like they pick the worst people to initially filter candidates.

I remember when recruiters and HR were deferential to the actual hiring managers, now it seems more the other way where people who really don't know the job filter what the hiring managers see... and even in at least two cases canceled a hire because they didn't like something. That makes no sense.

In the meantime everyone wants a "senior" (I put that in quotes because everyone's idea was absurdly different) and nobody wants anyone who is learning.

I was fortunate and found a job, first person that I felt actually tested my skills via a take home project hired me. After being hired now I get a bunch of contacts from places I already applied, even was rejected, sometimes for the same jobs they didn't hire me for. I wasn't good enough now, but "oh man he got a job" is apparently enough to get my foot in. Meanwhile capable people aren't getting offers. It's absurd.

The news about hot job market, lack of rising wages, and wonky hiring systems all seem very weird, and to conflict as far as a narrative goes.

mdorazio2• 8 years ago

It's not really conflicting from the perspective of employers. Basically, many companies are still acting as though it's 2009 with respect to hiring practices and expect experienced people willing to work for sub-par salaries. When they aren't able to find such people anymore, they either turn to foreign workers (via visa programs), contractors (to avoid overhead costs), or just reassign more work to existing employees in order to keep labor costs down and profits up.

The net result is what you're seeing - seemingly ridiculous hiring criteria for stagnant (or in some cases dropping) wages in the midst of a "hot" job market that's really hot because the low-wage service and contractor labor segments have soaked up so many people.

barrow-rider2• 8 years ago

. Basically, many companies are still acting as though it's 2009 with respect to hiring practices and expect experienced people willing to work for sub-par salaries. When they aren't able to find such people anymore, they either turn to foreign workers (via visa programs), contractors (to avoid overhead costs), or just reassign more work to existing employees in order to keep labor costs down and profits up.

They're not even trying to actually find people, they're just putting on a dog and pony show to qualify for H1Bs or to keep their contractors on edge.

lucdurette• 8 years ago

This post is spot on, I work in big data. I get ask to change job on a weekly basis. When you tell them the salary, they usually say it's not possible withn a olot of dumb excuses, even though the job description will list every big data technologies in existence plus all the cloud vendor. They want a senior with experience but with an associate Eng. salary bracket. They'll tell you they can't find anyone though. Also what I've seen, if you don't check one box in your past experience. They don't want to take a chance. I think any employes should consider the ccandidata learn some of his skills, most tech workers are usually looking for another challenge because they want to learn something new. The US job market is filled with employer with impossible criteria to meet. Sad state of affairs.

duxup7• 8 years ago

Yeah big data seems to be a place where this absurdity is amplified. Everyone wants the same small handful of people with those qualifications and everyone is like 10x the number of people... and none of them want to budge on what they offer / will take.

In the meantime plenty of good folks out there willing to get into it, but naw they won't take them.

DanTheManPR2• 8 years ago

You see tons of jobs out there on websites and even "desperate" listings, but the hiring process takes forever, and these guys just don't get hired. Something seems off.

From the employer side, something seems off to me as well. Our company is really desperate to hire new workers, both skilled and unskilled. But positions are staying open for months on end, despite me interviewing decent new potential hires.... corporate HR is getting really hung up on their qualifications, and are really stingy during wage negotiations.

It seems like there's kind of a collective madness going on among corporate hiring offices, where they're still behaving as though we're recovering from the great recession. And who can blame them? After all, they've spent the last 10 years of their careers in the crash and recovery - at this point, it's an old habit to play hardball with a potential new hire.

kei39jdjr• 8 years ago

There’s academic research that shows a pattern like you describe taking off during the Reagan era of union busting.

Since then, filling important roles (at the grunt level) has taken longer, wages aren’t keeping up.

It’s almost as if it’s stupidly inefficient to have millions of workers negotiating all this on their own.

Open standards in employment make the whole process smoother. Waste less human hours. But also increase worker security, which our system has been trying to undermine to the benefit of corporate masters for decades

(Seriously; Alan Greenspan reported to Congress that growing worker insecurity was good for business during the Clinton admin)

roymurdock2• 8 years ago

I'm assuming your company isn't hiring because, like so many medium-large corporations, legacy products that require maintenance are driving the vast majority of revenue, and there is no need for new (American - read: expensive) talent to maintain these products. The company can save costs by maintaining these products with a smaller core SW maintenance team and/or doing integration/development overseas.

In many software/services-based orgs, salaries/benefits/pensions etc. can add up to 50-60% of costs. If revenue isn't growing or the company doesn't need "premium" American talent, many (especially large orgs) will set up fake open positions, reject candidates while looking like they are searching, and instead put a hold on hiring, hire H1Bs, or hire overseas.

Just my 2c/observations, may or may not extrapolate out. But gives me a rational framework to explain why unemployment is low (labor market is "tight") and yet employees have little bargaining power and fewer and fewer profits accrue to labor vs. capital.

Edit: Just saw this article about IBM laying off expensive employees on the front page, which fits neatly into this framework - https://www.bloomberg.com/news/articles/2018-09-17/ibm-is-be...

duxup7• 8 years ago

Yeah at my previous job we went from posting a job to hiring in as little as a week.... and 10 years later posting a job meant almost nothing as far as the time line hiring someone.

maerF0x07• 8 years ago

It's because inflation where the jobs are is much higher than the national numbers let on (because many regions are stagnant).

The CPI in 2017 lists ~2% .

But then look at housing, more than double that.

Or consider the "burrito index" You cant get a decent burrito <$10 anymore.

I know all of this is not academic, it't not my job so I cannot dedicate the time to truly lay it all out, but even for the tech "working class" we're feeling the pinch of inflation.

Companies dont want to pay rising salaries because they're inflated. Workers demand them because the standard of living @100k is dropping precipitously.

jdhn• 8 years ago

Or consider the "burrito index" You cant get a decent burrito <$10 anymore.

Seriously? What is considered a decent burrito in this context? I guess I'm eating at all the undecent burrito places then because I've gotten huge burritos for <$10, and I thought they were good.

Balgair4• 8 years ago

I'll echo the sentiment with anecdata: In my most recent job search, I applied to ~5k jobs before getting hired via networking. I know the online ad-boards work less well than spam email, but I mostly used them as lead generation (HN who's hiring too, but that was near useless). Still, it was ~5k jobs that I matched with and applied for over about 14 months. I interviewed at <10 companies, and got 3 offers (not too bad!). The most serious offer was for ~90k on the Peninsula, no health insurance. Due to personal medical issues, that was a hard pass (pills are ~7k/mo w/o insurance)

On the rare chance that I got a rejection from an actual person, I'd email them with a 'resume bounty' request (like a bug bounty); $15 PayPal to tell me where I am going wrong in my applications (basically, I'd buy your lunch). No one took the cash, as they all'd just email me back saying that I was perfect, just that they already hired, I lacked 5 years in skills $XXXX$, I wasn't local, I was overqualified, yadda yadda yadda.

I've really tried to get into the mind of these companies and HR departments, but I can find no logic there. I've taken people at the larger companies in my sector out to lunch, coffee, beers, etc to pick their brains. The only thing I can think of that I have a black mark in some database or another that a lot of people use (credit is near perfect, references are a-ok, career path is a bit of a mess but what Millennial's isn't? ).

I've no idea what is going on.

duxup7• 8 years ago

Yeah there's NO feedback. Even rejection emails were rare. All I got was "ghosting" from recruiters... even those I met in person.

Consultant324523• 8 years ago

I'll offer my anecdata as a counter-example. Within the past year I was offered a nice 6-figure salary at a prominent banking company after a single phone interview. I'm (just barely) a millennial also with no degree, no certifications, didn't even go to tech school.

I can't speak to your personal situation, but speaking generally I think too many tech people over-value their technical skills. If all a company needs is a warm body that can code or patch servers they will hire a better coder in India for half the price. The number one differentiator is communication and social skills. At my job there are 4 main groups I talk to: local coworkers, India coworkers, management, clients. Being a person who can talk to all 4 of those groups is valuable. Being a person who can churn out code is not particularly valuable.

Communication, of course, starts on the resume. If you're not even getting calls, I would suggest getting some help on your resume. Hire a professional if you need to.

If your job history is a mess take a few crappy consulting gigs and then a year from now you can say, "I've been successfully consulting for a while but now am looking for a place to settle in." That way you at least look consistent.

If interviewing is tough for you, then do it more. If you have stable job put your resume out there and accept at least 2-3 interviews every 6 months. Even/Especially if you are happy with your current job. Not needing the new job takes the pressure off. The practice will be good for you and you never know, you might find an amazing opportunity.

megaman83• 8 years ago

What's going on is that there's an oversupply of Skilled labor. They already found someone else. The greater the oversupply, the more qualified candidates they have to reject.

I know one person, she's a data analyst (2 years experience, +5 years of marketing experience) here in the bay area. hasn't been able to get a Data analyst job for 3 years now, even after applying thousands of jobs and interviewing dozens of times. Finally, she was forced to take an after school baby-sitting job for 17$/hour (bay area).

swaggyBoatswain• 8 years ago

$15 isn't a huge bounty for the risk of potential litigation/getting fired for breaking company policy for telling honest feedback. This is how I see it from HR's perspective. A prospective candidate may not take the feedback as constructive criticism, causing some backlash and issues to the recruiter.

Another reason you are not sent as a rejection letter, is because it looks bad on HR's end if you were rejected, only to get hired months later. It basically says to the candidate "Our first pick dipped out on us, we were desperate enough to go through the 2nd pool, called a bunch of people, you were our backup". HR doesn't care about you, just what works for their company.

Sending rejection letters takes effort and offers no short-term benefits from HR's standpoint. Also, it can get quite messy to manage emails, especially if HR is aggregating prospective candidates from different portals all to one email.(remoteok.io, indeed.com, glassdoor.com, careerbuilder, reactjsjobs.com, etc)

Email responses becomes difficult to manage since you get 100+ emails in your inbox daily, 95% of candidates being unqualified. HR might not be big enough to warrant a dedicated system or tooling for hiring. You can use builtin tools like indeed.com, but from my experience its slower than using email. If you want to get shit done really fast forwarding to an email is time-saving, simple, and cheap.

You can then take the best candidates there, put it in kanban / trello / notion task board, etc if its a multistage interview process.

Companies aren't going to care enough to blacklist you in some database unless you caused some serious offense to warrant this. I can only think of one company that might actually do this, and its Valve.

Also if you apply to the same company more than once, you might be dealing with the same recruiter. They might recognize your resume just from memory though

stephengillie• 8 years ago

In the meantime everyone wants a "senior" (I put that in quotes because everyone's idea was absurdly different) and nobody wants anyone who is learning.

One company's senior engineer is another company's junior engineer. People sometimes "graduate" out of mid-level companies and into a Fortune 500 company. There should be a way to rank companies this way - maybe by scraping thousands of resumes to see where engineers spend their late 20s?

torpidor• 8 years ago

I was also puzzled by this earlier in my career. If tech is so hot why is it hard to get hired? I will now share the answer I spent years looking for with you, perhaps it will help.

There’s an enormous shortage of software developers. What there is not though, is an enormous shortage of software developer applicants. By this I mean people who heard programming was good money, went two weeks to rockstar coding ninja boot camp react JS and are now applying to job postings that say “lead engineer”.

So you are a hiring manager trying to find a team lead for your next project, you put out a job ad and you get 500 resumes for folks who can’t code their way out of a CS1 exam. In reality you need to reject all of them. But you can’t reject all of them, because if we could implement a hiring manager with a mail rule what would we need hiring managers for?

So instead we set up some convoluted method to reject nearly all of them that is not obviously equivalent to a mail rule. Phone screens, coding tests, five rounds of interviews so if in a desperate moment we do hire this idiot at least four other people at the company signed off on it.

Somewhere in this stack of resumes there will be exactly 0.3 people who can code their way out of a CS1 exam. However they will have things to do besides engage a kafkaseque hiring process, like, I don’t know, writing software for a living. Once they realize this they will not participate in the process, self-fulfilling the prophesy that no good candidates are ever in the pile.

Meanwhile in another part of town, someone is leaning on the existing engineers until they cough up a name of an (un)happily employeed lead engineer who can be poached from his dysfunctional organization to work for ours, which is not-at-all-dysfunctional, stop-talking-Jim-don’t-spook-him. Depending on the size of the organization that person will be hired either openly skipping whatever bizarre paper-pusher hiring process is nominally in place, or in some cases “HR makes us do this but it’s just a formality”.

The moral of this story is, if you want to be hired, a) ignore pretty much anything that purports to be hiring process for programmers, b) befriend engineers who will cough up your name under pressure.

fipple• 8 years ago

That’s a great market for an SAT style exam but the idea has been tried and has failed many times.

duxup7• 8 years ago

Hey I resemble that ninja boot camp graduate! ;)

But I agree, that's largely the jr developer problem / current condition. Nobody wants to hire them because MANY are horrible. I know because I was in camp with them... some can't operate a computer in a professional manner and they graduated with me...

I got lucky and finally got someone to seriously look at me and got a job.

barrow-rider2• 8 years ago

What there is not though, is an enormous shortage of software developer applicants.

I can't speak to the software side, but in IT there is a deluge of applicants. Lots of folks retraining, or coming in with 2 years of online ITT Tech-knockoff training. On the mid-to-high level that stratifies very quickly -- once we started filtering by (verified) CCNP/CCIEs/other certs the pool of legit applicants shrank greatly, but there was still a lot of noise.

Anecdote from when I did hiring: we needed 1-2 network engineers, low-to-mid-level and posted on craigslist, plus went through a couple headhunters we've worked with. Engineer needed to be in Atlanta, NC, DC, or Philly (though we did consider NYC-based folks in a couple cases). We posted CL ads in those cities 4 cities (not in NYC) and mentioned that we were in the entry-to-mid-level range.

We got something like 600 applications in the first day, couple thousand before the end of the week. Many were from far away from those cities, including several from overseas. Several applicants were clearly under-qualified, though I was surprised to see the number of overqualified folks, easily 30-40 applications; 7-10+ years and related degrees and certs. We didn't hire the overqualified people -- some looked too good to be true, others we worried about jumping ship quickly or being difficult to manage -- but it definitely threw me for a loop. IIRC we settled for a CCNA with a Big State 4-year degree who had the lowest salary requirements; he stayed on for about 2.5-3 years.

throw2016• 8 years ago

Greenspans vulgar comments on labor to congress [1]. First labor is unique, you can't create value or wealth without labor and for the last 40 years policy has been systematically privileging capital above everything else and wages have stagnated.

But either they get their fair equity or someone else is going to have to pay for housing, education, medicare and more, if Bezos and Waltons don't its you or us who are going to be stranded with the bill.

So the middle class already paying a huge chunk of income to renteers and asset inflation by the financial class when not bailing them out them out also have to bankroll poorly paid labor by 'wealth creators' like Bezos and Waltons.

If your grand plan is feudalism and a new class of serfs this is exactly how you would go about creating it. And there are other consequences of a narrow view of wealth and society.

If people are poorly paid then demand is going to tank hence the sudden fascination for UBI by neoliberals and libertarians. And when people are not stable you have an unstable society, things like marriage and stable families goes out of the window, fewer are vested in the future, the pipeline of new workers comes to a standstill and at this point either you start subsidizing families or import labor. May you live in interesting times.

[1] https://www.federalreserve.gov/boarddocs/hh/1997/february/te...

turtlecloud2• 8 years ago

I agree with what you say. The percentage of millennials I know starting families is extremely small. The sentiment is quite low and quite negative.

I believe that the only thing stopping the ruling political elite from imposing complete serfdom is the 2nd amendment and guns.

The recent push by Mainstream media on gun control is quite alarming and I wonder if young children now are goaded into school shootings by the messages seen in mainstream media.

Anyways, throughout history the balance of power has always been revolution / revolt on the ruling class when things become too unbearable.

I wonder how many amazon workers secretly support taking the head of Jeff bezos a la Marie Antoinette.

maerF0x07• 8 years ago

So if unemployment is so low, then its time to wind back supports for those who claim they cannot find a job.

Also might be time for a minimum wage increase too.

soared3• 8 years ago

How does that logic work? There will always be (and always should be) some amount of unemployed people.. how does that number being smaller impact the amount of support they should get? I'd argue the opposite - they are having more trouble despite it being easier, and therefore need extra support.

maerF0x07• 8 years ago

The logic works like this: We had put programs in place to deal with a recession. Now that the recession is over the programs are just wasted spending that needs to be put into things like paying down debt so we have some leeway when the next recession comes around.

sp332• 8 years ago

On top of that, the number of people getting assistance will be lower, so we can increase the support per person while still decreasing spending overall.

I think that as long as it's still possible to desperately search for a job and not find one, assistance should be available. e.g. https://twitter.com/ForgetAmnesia/status/1041720689311440897 https://twitter.com/ForgetAmnesia/status/1041729497895186432

nine_k2• 8 years ago

An increase of minimum wage does kill jobs, so yes, if you want higher unemployment, it's the measure.

maerF0x07• 8 years ago

The problem being we have people on minimum wage + government support. It's taxpayer subsidized work. That seems the wrong way to do capitalism.

But, also, talking it through does illuminate the question "Would we be better off with them unemployed and not, at least, gaining work experience?" ... Unsure of the answer.

tabtab3• 8 years ago

Politicians are not following Keynesian principles, instead focusing on short-term gains. We should be paying down debt during the top of the cycle so that we have spending money for slumps. Keynesian policy is Grandmother's advice: "save up for bad times." The recent tax-cuts were stimulus at the WRONG time.

cannonedhamster2• 8 years ago

American politics nowadays has little to do with anything other than cult of personality. The way we're set up exacerbates the issues as there's little incentive to work the middle of the aisle anymore where some of the best work happened. I'm a firm believer in conservative fiscal policy and liberal social policy. Good luck finding that in modern politics.

America is pushing the labour market to its limits

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