Why labor shortages could be here to stay

https://www.axios.com/2023/05/08/us-labor-shortage-older-workers

by paulpauper • 3 years ago

17 39 3 years ago

jleyank3• 3 years ago

Folks wanted boomers to get out of the way. Many of us have or will soon. This opens up positions at the top end and starts returning the savings to the general economy.

nradov2• 3 years ago

Savings from what? Boomers will still be consuming a lot of resources for a couple decades yet. But they won't be productive or paying much in the way of taxes anymore, which means that younger generations will have to endure higher taxes and/or inflation to support the Boomers. Someone has to pay those assisted living facility bills. (And to be clear, I am not arguing for abandoning the Boomers or anything like that.)

patmorgan23• 3 years ago

Social Security, pensions, and traditional IRA/401k withdrawals are all taxable.

jleyank3• 3 years ago

Dump on boomers if you’d like but we didn’t create social media. The pipes, yeah, but the kids and grandkids created the environment we live in. Boomer hackers made tools. Their descendants sold ads and collected data.

mensetmanusman3• 3 years ago

Work to live. I hope you have an enjoyable retirement :)

adammarples• 3 years ago

This is not useful. Boomers transitioning from helping generate supply, ie. Working, to generating demand, ie spending their savings - all that does is increase the money in circulation while decreasing the stuff. Inflation is not going anywhere for some time.

renewedrebecca• 3 years ago

It's not a "labor shortage." It's a "companies don't want to pay people what they're worth" problem.

Throw wads of cash on the table. There will be no "shortage."

alexandre_m• 3 years ago

Or it's really a shortage, and when you're the highest bider for a talent pool on the market what really happens is that a person who's employed will leave their current employer to work for you, therefore just creating a shortage of employees for the competitors.

The validation of "shortage" is really simple. If every employer pays the same high-end market salary, is every open position filled?

kelseyfrog2• 3 years ago

If their business depended on it, I'm sure we would see no shortage of creative solutions like funding education or training needed to do the job. If the pool is too small, then the problem switches to growing the pool.

faeriechangling• 3 years ago

Could it be a "companies don't have jobs that pay people well anymore" problem?

pixl97• 3 years ago

Investors demand forever increasing returns.

whywhywhydude• 3 years ago

That’s assuming that companies have high margins and just have wads of cash to throw at employees. That’s probably not true for majority of the small companies - startups, restaurants and small moms and pops shops.

willcipriano• 3 years ago

Those services are underpriced.

rufus_foreman• 3 years ago

The demand for workers at current market wages is greater than the number of workers willing to work at those wages. That is the economic definition of a shortage.

One way to get rid of the shortage would be for employers to pay more. Another way would be to reduce demand for workers by raising interest rates.

diordiderot• 3 years ago

When are they going to end the Lambo and Caviar shortages?

gumby• 3 years ago

Immigration is the easy fix for this.

linksnapzz• 3 years ago

...sorta like putting a penny in a fuse box.

robocat• 3 years ago

However you need to increase housing and build infrastructure: I wouldn’t call those secondary problems easy to fix. I live in New Zealand where ~30% of our population is people that were not born here (compared to ~15% in the USA). That means NZ need 50% more houses and 50% more of everything else than we would with zero immigrants. I support immigration, but it does cause large issues.

https://en.m.wikipedia.org/wiki/List_of_sovereign_states_and...

twelve40• 3 years ago

No it's not. It's kicking the can down the road a little bit. Worldwide the fertility is plummeting, it's already below replacement in most countries that used to stream people into the US: Mexico, Cuba, Venezuela, etc, not to mention India or China. Perhaps except Guatemala, which is already tiny and trending down as well.

The "solution" here is to make conditions in those countries much worse, so that even the existing population starts to leave and the immigration gets sustained. Otherwise it will be trending down, because the replacement is no longer there and those countries will start facing labor shortages of their own in a couple of decades.

maerF0x04• 3 years ago

Incentivize fertility even more?

Perhaps free childcare (france), making parental healthcare free (conception to end of maternity leave for example), right to return to work laws for parents (finland iirc), tax breaks, and perhaps even an values/propaganda campaign?

I think there are economic solutions that could help, but I will admit i'm uncertain it can be accomplished in the american political environment. It would require some folks to accept there's a problem needing fixing (the kinds of conservatives who just want everything to stay the same), some folks would have to get off their high horse and realize they did a crap job of building society (boomers who think that rigging the game is a form of winning), some folks would have to accept that parenthood/mothering is a virtuous/higher calling (the kinds of liberals who think a woman who sacrifices motherhood for career is some how superior -- at least make them equal) ...

nradov2• 3 years ago

Analyst Peter Zeihan has been pointing out for a while that the number of highly productive skilled workers in the labor pool is going to decline temporarily just due to demographics. The Baby Boom generation is rapidly retiring, the Millennials are still too young to reach peak productivity (on average for most industries), and Generation X in the middle is relatively small. This means a period of high inflation.

https://zeihan.com/demographics-part-3-the-xer-cut/

tuatoru• 3 years ago

The economist Charles Goodhart has been beating this drum for a couple of decades and more.

The great thing about demographics is it's about the only area in which we can make predictions about the (near) future with any degree of precision (or accuracy).

However pointing out these looming problems and advocating family-friendly and child-bearing-friendly polices just got Goodhart labeled as a right-wing anti-gay nutjob back in the '00s and '10s.

1. Goodhart has finally (2020) written a book after decades of writing pieces on Project Syndicate and VoxEU: https://www.amazon.com/Great-Demographic-Reversal-Societies-...

than33• 3 years ago

I really hate people that idolize other people that get it wrong just as much as they get it right.

The baby boom generation isn't retiring, they are rapidly dying because they are now in their 70s/80s and that's what happens when old age takes you.

When there were downturns, the experienced workers crowded out the entry level positions normally used to build job experience. This has set back and snowballed every generation after the baby-boom generation.

This lack of experienced labor, coupled with the massive amount of currency debasement means we are going into a period of high inflation and low production but its more about the currency debasement than anything else with regards to inflation. You can't print money to pay debts owed indefinitely. Like any ponzi it eventually has consequences.

Many generations starting with Gen-X were hobbled at vulnerable times in their financial life. There is no predicting what is coming aside from the generalization that there will be lower birth rates because people are less financially secure, and have no say because representatives are only responsive to campaign contributions (see tweedism larry lessig).

There are times in our lives where if we don't have children, then it doesn't happen for a large majority.

You need to be debt free and have a downpayment of a house by 30, and children no later than 35 for women. Mortality, complications, and birth defects kicks in after that.

Children are expensive and the cost is borne by the parents. Simple economics, if the cost of labor goes below what is needed by a family unit to support the mother and father 2 children to 18 then it doesn't happen. This was well known in 1776 only back then it was 4 children because of mortality.

Something so widely and commonly known being so completely ignored by the people who are supposed to know best, really goes to show how bad things are going to get.

patch_cable• 3 years ago

Several of my friends working in tech in their 30s rent apartments and have children. Having a house isn’t a requirement.

mensetmanusman3• 3 years ago

Countries get old fast, here is a fertility rate of 1 (higher than South Korea):

Year 0: 100 newborns

Year 20: 100 twenties, 50 newborns

Year 40: 100 forties, 50 twenties, 25 newborns

Year 60: 100 sixties, 50 forties, 25 twenties, 12 newborns

Year 80: 50 sixties, 25 forties, 12 twenties, 6 newborns

Year 100: 25 sixties, 12 forties, 6 twenties, 3 newborns

Year 120: 12 sixties, 6 forties, 3 twenties, 1 newborn

We are nearing the midpoint of this in many parts of the world. Labor and GDP be gone.

than33• 3 years ago

GDP was never an accurate measure of national production. It makes no distinction between the number of people its concentrated in.

You can't really claim its national production if only one person controls it, as in some countries is done...

maerF0x04• 3 years ago

And that's why replacement rate (including immigration) is important to the stability of society. With a dynamic value (exponential growth or decay) we struggle to properly predict the future needs.

But with a stablish pattern we can mostly maintain, with little adaptations along the way.

pg_1234• 3 years ago

Actually you achieve a kind of financial stability in the above example if each older generation relinquishes their accumulated wealth to the younger generation as a 2 to 1 rate.

i.e. 2 Boomers give up their wealth to 1 Millennial for services rendered.

The "haves" just don't like how the supply and demand equation is swinging back in favor of the "have not but can still work".

As for the services rendered in return, well, supply side constraints dictate you settle for what's available ... that's all there is.

Why labor shortages could be here to stay

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