America is pushing the labour market to its limits(economist.com)
economist.com
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
212 comments
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.
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.
> 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.
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.
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.
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.
That’s a great market for an SAT style exam but the idea has been tried and has failed many times.
> 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.
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.
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...
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...
I think you're describing out situation pretty well, and as much as I hate it, I see the logic. That said: if we don't keep innovating, some newcomer is going to beat us up and steal our lunch money.
Maybe, maybe not. The pace of innovation is slowing to a crawl in most areas of computing technology. Look at how long IBM/Oracle have been able to derive billions from legacy products. And if you're big enough, you'll acquire whatever the "innovative" new tech is.
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)
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)
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.
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.
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.
$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
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
> 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".
Good perspective, I had not thought of that. Thank you.
Good perspective, I had not thought of that. Thank you.
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).
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).
There's definitely not an oversupply of skilled labor, there is just a ton of noise in the hiring process right now.
Our software engineering job posts on LinkedIn & Indeed generate hundreds of applicants per day, the vast majority of which can't code at all. Attempting to sift through them is just too costly so we mostly use alternate sources: tech recruiters, more selective job sites. The problem is those sources heavily filter themselves and don't always use the most fair criteria.
We used to have unique challenge problems online to offer a more level playing field, but solutions were constantly posted to github so even that became quite time-consuming to maintain.
We're still hiring at a decent rate, but do have more headcount than we can fill right now. There are definitely qualified candidates out there but attempting to filter them from the mass of applicants is difficult.
Our software engineering job posts on LinkedIn & Indeed generate hundreds of applicants per day, the vast majority of which can't code at all. Attempting to sift through them is just too costly so we mostly use alternate sources: tech recruiters, more selective job sites. The problem is those sources heavily filter themselves and don't always use the most fair criteria.
We used to have unique challenge problems online to offer a more level playing field, but solutions were constantly posted to github so even that became quite time-consuming to maintain.
We're still hiring at a decent rate, but do have more headcount than we can fill right now. There are definitely qualified candidates out there but attempting to filter them from the mass of applicants is difficult.
As for the 'noise' factor, try red-teaming your hiring processes, though for your particular situation it may not be the best. For example: with the major job sites, make a fake profile that is a 100% match, apply for your jobs, see if the fake person gets through, at what rate, etc. Do it for 90%, 80%, 70% matches too (define the % match as you see fit).
Trying to 'hack/red-team' your own system may reveal weaknesses and flaws you weren't thinking of and help the hiring process. See what penetrates, what doesn't, chat about it over lunch, etc. And yes, it does seem like taking an adversarial approach towards your very own hiring processes is insane, but here we are.
Trying to 'hack/red-team' your own system may reveal weaknesses and flaws you weren't thinking of and help the hiring process. See what penetrates, what doesn't, chat about it over lunch, etc. And yes, it does seem like taking an adversarial approach towards your very own hiring processes is insane, but here we are.
I'd love to know which are the more selective job sites. I'm having trouble finding work and i haven't figured out if it's due to a horrible resume (hired a tech recruiter to do it so I assume not) or if I'm horrible at interviews.
I'm convinced that interviewing for programming jobs and being able to code are two different skills. Making it worse for myself is that I come from the military and IC so i dont have any public blogs or Github activity so i can't pretend to be a "thought leader", which I'm also pretty sure is a bullshit term.
I'm convinced that interviewing for programming jobs and being able to code are two different skills. Making it worse for myself is that I come from the military and IC so i dont have any public blogs or Github activity so i can't pretend to be a "thought leader", which I'm also pretty sure is a bullshit term.
Your friend needs to pretend to be a data scientist. That's what they call data analysis now. If she's any good, then she'll be a whole lot better than any recent PhD grad (if I wasn't 5k miles away, I'd interview her at least based on your description).
Well, she doesn't have a computer science degree. She's an MBA who's learned SQL, tableau, excel, etc (working at a large company 500+ people). She pulls out data with SQL queries and knows how to use excel inside and out. she's made it all the way to the final interview, but everytime they figure out she had a baby, they assume she's going to have a 2nd one.
I'd be happy to explore with your friend if I know of any consulting/contract opportunities for her and provide some guidance on resources for going forwards with that. She may get better traction that way; contractors are treated much differently from employees.
I strongly encourage her to contact the EEOC. https://www.eeoc.gov/employees/charge.cfm
Isn't that an open-and-shut discrimination case?
Unfortunately no. You can easily not hire someone for "fit" without describing why you didn't think that they fit. You can also say a million other legal reasons for not hiring. Unless they specifically say that you were not hired because you're a momma then you've got a long, long hill to climb.
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.
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.
My sector is biotech, so it quite a bit different than tech. Consulting really doesn't happen. Nonetheless, thank you for the tech advice.
Yeah there's NO feedback. Even rejection emails were rare. All I got was "ghosting" from recruiters... even those I met in person.
If you met a recruiter in person and then they ghosted you, that means you failed the "sniff test." That's not literal, I'm not suggesting you literally smell, but it means you failed to present well socially. If recruiters place bad candidates they stop getting business and they go broke. Recruiters are totally technically illiterate, so they are all about that social "feel." Something you did put them off and made them not feel comfortable betting their income on you.
No that isn't it - the recruiters don't care about you so why should they reply? It's just a waste of time. Their job is about treating people as things.
I've had several recruiters ghost me, then months later contact me with potential gigs.
I've had several recruiters ghost me, then months later contact me with potential gigs.
Yes, recruiters see you as a thing, a thing they have to try to sell. They have no clue how to determine your technical chops. So how do you think they determine whether you will be easy to sell or difficult to sell? Why do you think they have face to face meets?
That doesn't matter if the other side of the equation doesn't work out. If they can't convince the client to do an interview they will usually ghost you, regardless of your smell.
It's funny because most of them said the opposite socially, specifically saying how they thought I was quite personable compared to other candidates.
I think more likely it was experience as I was in the midst of changing careers. The unfortunate part is they could have seen that on my resume and from our phone calls (not that they pay much attention).
I actually suspect a lot of my meetings were a case where my preference level was low but they were meeting with me to sort of bank a contact they might use in the future.... but not likely now. I suspect this as after I got a job, several have suddenly followed up with me after ignoring me in the meantime....
I think more likely it was experience as I was in the midst of changing careers. The unfortunate part is they could have seen that on my resume and from our phone calls (not that they pay much attention).
I actually suspect a lot of my meetings were a case where my preference level was low but they were meeting with me to sort of bank a contact they might use in the future.... but not likely now. I suspect this as after I got a job, several have suddenly followed up with me after ignoring me in the meantime....
> recruiters ... I met in person.
That was your first mistake. Recruiters provide little to no value for potential hires.
That was your first mistake. Recruiters provide little to no value for potential hires.
Refusing to meet them also would seem to close a door when you're looking for any option you can.
My recruiter, who found me on LinkedIn, roughly doubled my compensation.
That means you may have been able to triple it by going directly.
I wouldn't have been able to even get in the door without the recruiter; that's simply how the org operates.
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.
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.
> . 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.
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.
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.
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.
>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.
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.
Naturally this is completely contextual and my point is whereas ~3yrs ago I could get a good burrito for $8 now they're $11 and that's about 33% inflation... Not 2% compounding.
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.
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.
In the meantime plenty of good folks out there willing to get into it, but naw they won't take them.
A more subtle problem, besides employers not willing to pay with money, is that, more often than not, they can't actually "pay" with interesting work (or experience or growth or something similar).
Complaining about companies thinking (or just saying) they have "big data" when all they have is moderately-sized data is more common on HN now. What's more, even the very low bar of "fits in main memory" increases rapidly enough that "big" from a couple years ago might not be any more.
Complaining about companies thinking (or just saying) they have "big data" when all they have is moderately-sized data is more common on HN now. What's more, even the very low bar of "fits in main memory" increases rapidly enough that "big" from a couple years ago might not be any more.
> 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?
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?
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?
Is it like this now in the states?
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.
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.
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.
Everything is contract work in technology now unless you're a software engineer. They do exactly the same things. It's cheap exploited labor.
In the last 18-24 months I've seen a huge uptick in software positions are are C2H, not full-time salaried.
Yep, even they're becoming contract. C2H could mean 1-2 years working for a company with no benefits, no job security, and much lower pay.
This is not independent contractors I'm talking about, it's contract companies that are there solely to exploit the workforce.
This is not independent contractors I'm talking about, it's contract companies that are there solely to exploit the workforce.
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?
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?
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."
"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."
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.
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.
I haven't heard that definition of "hotness" yet. This sounds interesting. Thanks.
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.
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.
Yes. The interests of humans are not the interests of capital, and the purpose of the economy is to maximize capital.
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.
>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.
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.
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.
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.
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”.
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”.
Having over-leveraged institutions isn’t related to growth at all.
I think what you’re kinda getting around to saying in your second paragraph is that inflation hurts wage earners? If so, the Fed agrees with you, which is why it’s continually adjusting interest rates. In fact, that’s the entire focus of the OP article.
I think what you’re kinda getting around to saying in your second paragraph is that inflation hurts wage earners? If so, the Fed agrees with you, which is why it’s continually adjusting interest rates. In fact, that’s the entire focus of the OP article.
Yes, but I think they’re always late and the inevitable bailouts inevitably hurt the wage earners more than the capital owners, as history has shown.
Wouldn’t the “over” part of over-leveraged only be true if an error in expectations of future growth (either through increase in revenue or decrease in costs or both)?
Growth is what the leverage is presumably based on. Everyday I see land and business sold for multiples more than even 2 or 3 years ago. All those loans are pricing in quite a bit of “growth”.
Wouldn’t the “over” part of over-leveraged only be true if an error in expectations of future growth (either through increase in revenue or decrease in costs or both)?
Growth is what the leverage is presumably based on. Everyday I see land and business sold for multiples more than even 2 or 3 years ago. All those loans are pricing in quite a bit of “growth”.
>I think they’re always late and the inevitable bailouts inevitably hurt the wage earners
It's pretty obvious that you don't actually know what you're talking about. Inflation has been pretty much under control for the past few years, and it's projected to go down slightly over the next few years.
I'm really confused why you're talking about leverage or bailouts at all. Downturns in 'hot' economies tend to be caused by demand-pull inflation, which is exactly what the fed is managing, as discussed in the OP's article.
Your discussion of leverage is not related to this situation at all. Leverage isn't based on growth, and doesn't require growth to service. The risk of a 'cascading default' is based primarily on the leverage ratios of large financial institutions. Those ratios were reformed from the ground up recently, and there's no indication that there's anything wrong with them. It's really quite hard to have this discussion with you, because you're talking about a few different unrelated topics, which you appear to not really understand at all.
It's pretty obvious that you don't actually know what you're talking about. Inflation has been pretty much under control for the past few years, and it's projected to go down slightly over the next few years.
I'm really confused why you're talking about leverage or bailouts at all. Downturns in 'hot' economies tend to be caused by demand-pull inflation, which is exactly what the fed is managing, as discussed in the OP's article.
Your discussion of leverage is not related to this situation at all. Leverage isn't based on growth, and doesn't require growth to service. The risk of a 'cascading default' is based primarily on the leverage ratios of large financial institutions. Those ratios were reformed from the ground up recently, and there's no indication that there's anything wrong with them. It's really quite hard to have this discussion with you, because you're talking about a few different unrelated topics, which you appear to not really understand at all.
"..because people don’t hop around jobs as much as they should..."
I suspect you are over-generalizing from the relatively rare situation of a group of high-earners. Job hoping isn't really a good strategy for convenience store clerks.
I suspect you are over-generalizing from the relatively rare situation of a group of high-earners. Job hoping isn't really a good strategy for convenience store clerks.
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.
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.
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.
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.
Remember that for most below average households, not much of their expenses aren't currency dependant. Housing, transport, education, food...
How can you say that these aren't currency dependent? If the US dollar was 10 times stronger you could buy 10 times more food. If the prices stayed the same you'd see a surge in imports. When imported products are cheaper everything becomes cheaper, it might just take some time.
> If the US dollar was 10 times stronger you could buy 10 times more food.
"You" being the distributor, not the final consumer. I don't see why the distributor (or other middlemen) wouldn't simply pocket the price difference themselves. What would force them to pass it on to consumers?
"You" being the distributor, not the final consumer. I don't see why the distributor (or other middlemen) wouldn't simply pocket the price difference themselves. What would force them to pass it on to consumers?
The middleman always wants to maximize profit. Nothing is stopping them from raising prices at anytime. However, unless you have a monopoly on the food market, competition will force the prices down.
> "You" being the distributor, not the final consumer. I don't see why the distributor (or other middlemen) wouldn't simply pocket the price difference themselves. What would force them to pass it on to consumers?
This would only work if the distributor had a monopoly on food sales in the US, or a monopsony on food imports to the US.
Thankfully, this is not the case for anything except for specialty imports.
This would only work if the distributor had a monopoly on food sales in the US, or a monopsony on food imports to the US.
Thankfully, this is not the case for anything except for specialty imports.
I'm not sure if it's the same in the states, but in Canada it's remarkable how all the gas stations, owned by different corporations, all seem to have price fluctuations at the same time, and even though crude oil is half the price it was half a decade ago the gas prices seem to have crept back to where they were pre-plummet.
If all the distributors know the game, they find ways to work together.
If all the distributors know the game, they find ways to work together.
What is remarkable about it? That's what happens when you are selling a commodity. There is nothing to set yourself apart in the marketplace, so you have no choice but to sell at the same price as everyone else or decline sales until the market improves. RBOB is publicly traded commodity at that. It is not exactly a mystery to sellers what the market price is. The buyers literally publish what they are willing to pay and the sellers decide if they agree to it or not.
As a cash crop farmer, it is the same deal for us. We're told what the price is and it's a take it or leave it situation. We're growing commodities, so if I want more money than the customer is willing to spend, the buyer has no issue going to my neighbour who grows the exact same crops. It makes no difference to them. And thus, if I also want to sell at that time, I have no choice but to match every other farmer. If I offer an even lower price, every other farmer will have to match me if they want to sell.
As a cash crop farmer, it is the same deal for us. We're told what the price is and it's a take it or leave it situation. We're growing commodities, so if I want more money than the customer is willing to spend, the buyer has no issue going to my neighbour who grows the exact same crops. It makes no difference to them. And thus, if I also want to sell at that time, I have no choice but to match every other farmer. If I offer an even lower price, every other farmer will have to match me if they want to sell.
The argument above was:
> I don't see why the distributor (or other middlemen) wouldn't simply pocket the price difference themselves. What would force them to pass it on to consumers?
> This would only work if the distributor had a monopoly on food sales in the US, or a monopsony on food imports to the US.
I'm saying that the independent distributors of gasoline have no monoply on the market, but still manage to ensure that they all get the same cut anyways. There's nothing stopping them all from agreeing to fix the market far above what the price could be because they see an opportunity for profit.
I'm saying that the independent distributors of gasoline have no monoply on the market, but still manage to ensure that they all get the same cut anyways. There's nothing stopping them all from agreeing to fix the market far above what the price could be because they see an opportunity for profit.
> I'm saying that the independent distributors of gasoline have no monoply on the market, but still manage to ensure that they all get the same cut anyways.
Naturally. That has to happen if you are selling a commodity. By literal definition, there is no way to differentiate yourself in the market. You cannot build a better OS for your gasoline or wheat to try and extract more profit. All you can offer is basic gasoline or wheat. The exact same gasoline or wheat as the guy across the street.
Why would a customer ever pay you more for the exact same thing as the guy across the street? Matching the price of your competition is the only hope you have of making a sale. If you don't take an identical cut, you won't have a business at all.
> There's nothing stopping them all from agreeing to fix the market far above what the price could be because they see an opportunity for profit.
You mean other than the practicalities of the real world that make it almost impossible to pull off?
Milk is another commodity. Being Canadian, you likely know that subject well given the events that are going on right now. Why do you think Canadian dairy farmers are shaking in their boots right now given that they can simply get together as a group and fix the price to fend off any changes that may come? They've already had decades of practice.
Naturally. That has to happen if you are selling a commodity. By literal definition, there is no way to differentiate yourself in the market. You cannot build a better OS for your gasoline or wheat to try and extract more profit. All you can offer is basic gasoline or wheat. The exact same gasoline or wheat as the guy across the street.
Why would a customer ever pay you more for the exact same thing as the guy across the street? Matching the price of your competition is the only hope you have of making a sale. If you don't take an identical cut, you won't have a business at all.
> There's nothing stopping them all from agreeing to fix the market far above what the price could be because they see an opportunity for profit.
You mean other than the practicalities of the real world that make it almost impossible to pull off?
Milk is another commodity. Being Canadian, you likely know that subject well given the events that are going on right now. Why do you think Canadian dairy farmers are shaking in their boots right now given that they can simply get together as a group and fix the price to fend off any changes that may come? They've already had decades of practice.
> Why would a customer ever pay you more for the exact same thing as the guy across the street? Matching the price of your competition is the only hope you have of making a sale. If you don't take an identical cut, you won't have a business at all.
But if that were the case, I'd expect that e.g. gasoline prices roughly follow the ups and downs of crude oil prices. However, the reality seems to be different:
> ... in Canada [...], and even though crude oil is half the price it was half a decade ago the gas prices seem to have crept back to where they were pre-plummet.
But if that were the case, I'd expect that e.g. gasoline prices roughly follow the ups and downs of crude oil prices. However, the reality seems to be different:
> ... in Canada [...], and even though crude oil is half the price it was half a decade ago the gas prices seem to have crept back to where they were pre-plummet.
> But if that were the case, I'd expect that e.g. gasoline prices roughly follow the ups and downs of crude oil prices.
Why? Oil is an input for gasoline, no doubt, but it is also an input for wheat. If wheat diverges from the price of oil, nobody thinks twice. What's special about gasoline that requires that it follow the price of oil, despite being traded as a separate commodity?
There is a relationship between the price of oil and the price of gasoline, but not a direct one.
Why? Oil is an input for gasoline, no doubt, but it is also an input for wheat. If wheat diverges from the price of oil, nobody thinks twice. What's special about gasoline that requires that it follow the price of oil, despite being traded as a separate commodity?
There is a relationship between the price of oil and the price of gasoline, but not a direct one.
[deleted]
> I'm saying that the independent distributors of gasoline have no monoply on the market, but still manage to ensure that they all get the same cut anyways. There's nothing stopping them all from agreeing to fix the market far above what the price could be because they see an opportunity for profit.
Except for the fact that
(a) it's completely illegal
(b) every individual player has an incentive to undercut the others and profit, making the collusion unstable
The second is actually more significant than the first, because even if it weren't illegal, this setup would break apart pretty quickly at scale. (That bears out in practice: collusion with many parties tends to be unstable in the long run, and usually is only successful as long as the colluding parties can find a separate motivation to justify the collusion).
Except for the fact that
(a) it's completely illegal
(b) every individual player has an incentive to undercut the others and profit, making the collusion unstable
The second is actually more significant than the first, because even if it weren't illegal, this setup would break apart pretty quickly at scale. (That bears out in practice: collusion with many parties tends to be unstable in the long run, and usually is only successful as long as the colluding parties can find a separate motivation to justify the collusion).
And yet, cartels and illegal price fixing occurred pretty often in history.
> And yet, cartels and illegal price fixing occurred pretty often in history.
There's a lot of research that's gone into this. Cartels (specifically multiparty cartels organized around price fixing) have rarely been stable for extended periods of time. The exceptions are usually either
(1) Domestic cartels which are able to gain the backing of the (nation-state) government that has jurisdiction over them
(2) Cartels which are able to find a separate motivation shared by all parties to justify the collusion
The first case is obviously not applicable to what we're talking about here. The second is what I already mentioned, and it's pretty rare (and not applicable to this situation either).
There's a lot of research that's gone into this. Cartels (specifically multiparty cartels organized around price fixing) have rarely been stable for extended periods of time. The exceptions are usually either
(1) Domestic cartels which are able to gain the backing of the (nation-state) government that has jurisdiction over them
(2) Cartels which are able to find a separate motivation shared by all parties to justify the collusion
The first case is obviously not applicable to what we're talking about here. The second is what I already mentioned, and it's pretty rare (and not applicable to this situation either).
> 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.
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.
> 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
That isn't what "purchasing power" means.
OP is right - the purchasing power of the consumer is what matters, not the nominal wage. Focusing on the latter will actually be counterproductive, because it will lead to policies that decrease the former.
That isn't what "purchasing power" means.
OP is right - the purchasing power of the consumer is what matters, not the nominal wage. Focusing on the latter will actually be counterproductive, because it will lead to policies that decrease the former.
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.
That wouldn't be an increase in buying power if the replacement item is of lower quality/value than the original.
That wouldn't be an increase in buying power if the replacement item is of lower quality/value than the original.
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.
> 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.
Arguably the US already is focusing on this; the US has the highest real net disposable income of all OECD countries.
Arguably the US already is focusing on this; the US has the highest real net disposable income of all OECD countries.
> the US has the highest real net disposable income of all OECD countries.
A higher disposable income does not necessarily lead to a higher discretionary income. If the non-discretionary costs (food, shelter, etc.) are higher than elsewhere, discretionary income could actually be lower than in other countries with lower disposable income.
A higher disposable income does not necessarily lead to a higher discretionary income. If the non-discretionary costs (food, shelter, etc.) are higher than elsewhere, discretionary income could actually be lower than in other countries with lower disposable income.
> A higher disposable income does not necessarily lead to a higher discretionary income. If the non-discretionary costs (food, shelter, etc.) are higher than elsewhere, discretionary income could actually be lower than in other countries with lower disposable income.
It doesn't necessarily, but it turns out that it does in this case, because the US does have a higher discretionary income than any other OECD country (and is below the median and well below the mean in household debt as well.
It doesn't necessarily, but it turns out that it does in this case, because the US does have a higher discretionary income than any other OECD country (and is below the median and well below the mean in household debt as well.
That's interesting. Where would one go to find data about discretionary income? Disposable income data is readily available, but I wasn't able to find much about discretionary income, including going straight to the OECD which did not reveal anything in my searches.
That's misleading. Economists follow real wages, which take inflation into account.
Yes, I'm not talking about the economists. I'm talking about the media and the politicians. How much do we hear about the need to improve productivity in the mainstream media? That's really the key to prosperity.
Also, if you talk about the inflation adjusted income, it has been steadily increasing since 2012: https://fred.stlouisfed.org/series/MEHOINUSA672N The median income in the US now is higher than most European countries including Sweden, Denmark, and Germany.
Also, if you talk about the inflation adjusted income, it has been steadily increasing since 2012: https://fred.stlouisfed.org/series/MEHOINUSA672N The median income in the US now is higher than most European countries including Sweden, Denmark, and Germany.
Improve productivity to where? The last decades already saw enormous productivity increases - it doesn't seem to have lead to less inequality or higher or more secure incomes for many.
Is there any reason to prefer those over policies that result in shifting income down?
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.
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.
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...
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...
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.
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.
> 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.
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.
> All we can conclude is that the EU unemployment rate to wage increase function is not the same as the US function
If the difference between the outputs has held steady over time...which I dont think is the case.
Start adding other variables into the equation and I have no doubt you can make it work. I also have little confidence in the predictive power of the resulting functions.
I dont think unemployment is UNRELATED to wages, but it seems obvious that the straightforward econ 101 equation has been broken by some factor. I'd rather see people try to figure out what is really going on than assuming the broken equation must actually be right, we just need to depend on it MORE.
One of the primary tasks of a govt is stability, but the recent US trend has been focused on short term stability over long term. I've seen a few (different) theories for what is going on (and am far too ignorant to have a clue myself), but I've not seen ACTION indicationing any concerns are being seropusly considered. I'm sure a chunk of the Fed is concerned, but what are we doing to bleed off the inequality pressure?
If the difference between the outputs has held steady over time...which I dont think is the case.
Start adding other variables into the equation and I have no doubt you can make it work. I also have little confidence in the predictive power of the resulting functions.
I dont think unemployment is UNRELATED to wages, but it seems obvious that the straightforward econ 101 equation has been broken by some factor. I'd rather see people try to figure out what is really going on than assuming the broken equation must actually be right, we just need to depend on it MORE.
One of the primary tasks of a govt is stability, but the recent US trend has been focused on short term stability over long term. I've seen a few (different) theories for what is going on (and am far too ignorant to have a clue myself), but I've not seen ACTION indicationing any concerns are being seropusly considered. I'm sure a chunk of the Fed is concerned, but what are we doing to bleed off the inequality pressure?
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.
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.
>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.
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.
> 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.
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.
>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?
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?
We could just fire 3.2% of the nation's lowest wage earners so unemployment equals Europe's and the average wage would instantly be higher.
> 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.
Where exactly? Surely not in western Europe, it's stagnating since the 80s. In the former soviet bloc for sure I agree.
Please see the chart on this page: https://www.businessinsider.com/france-vs-us-real-wages-2015... Yes, wages have begun to stagnate in the Eurozone in the last 10 years, but it is a completely different situation from the total robbery American workers have been put through!
This shows that although wages in Europe rose faster, they're still higher in the US: http://www.pewglobal.org/2017/04/24/middle-class-fortunes-in....
To me, that implies the possibility of there being a "wage ceiling" for people of a given skill level as the other western nations appear to be on a trajectory that will top out around the same level at which US wages have stagnated. The existence of such a ceiling does make sense given that the distribution of innate ability in a given population is on a bell curve. Even if we assuming a perfect allocation of resources (capital, education, etc), there will eventually be a point at which an individual can be made to be more efficient in performing a task and without groundbreaking advances in technology that drastically change the amount of value an individual can generate at their peak level of efficiency, there will be no economic force acting to increase their wage.
There are plenty of inefficiencies in the current American model of resource distribution, hence the continued slow growth of wages as they get worked out over time, but it looks like we may have exhausted all the "easy" problems given the length of time this trend of slow growth has been in effect.
There are plenty of inefficiencies in the current American model of resource distribution, hence the continued slow growth of wages as they get worked out over time, but it looks like we may have exhausted all the "easy" problems given the length of time this trend of slow growth has been in effect.
Great. Now give me an inflation ceiling.
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.
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.
I've been reading on the philosophy of science for a while. According to Karl Popper, what distinguishes science from pseudo-science such as Astrology is that the former is able to produce falsifiable theories. Is economy science or pseudo-science? If it is, then its theories needs to be falsifiable.
But apparently you can't falsify the Law of Supply and Demand (LSD). When the world again and again doesn't work in accordance with what the LSD predicts, its adherents always comes with excuses as to why it didn't work in this particular case. But there are huge labor shortages across the whole US, but wages still doesn't increase! So you throw the theory into the garbage bin.
But apparently you can't falsify the Law of Supply and Demand (LSD). When the world again and again doesn't work in accordance with what the LSD predicts, its adherents always comes with excuses as to why it didn't work in this particular case. But there are huge labor shortages across the whole US, but wages still doesn't increase! So you throw the theory into the garbage bin.
> But apparently you can't falsify the Law of Supply and Demand (LSD). When the world again and again doesn't work in accordance with what the LSD predicts, its adherents always comes with excuses as to why it didn't work in this particular case
It's weird that you dismiss "more advanced models that explain the behavior we observe and provide better predictions" as "excuses".
Yes, it's more convenient to argue against a straw man (the most basic formulation of "supply and demand" that doesn't even cover what's taught in introductory economics classes), but it doesn't mean you'll produce valid criticism from it.
It's weird that you dismiss "more advanced models that explain the behavior we observe and provide better predictions" as "excuses".
Yes, it's more convenient to argue against a straw man (the most basic formulation of "supply and demand" that doesn't even cover what's taught in introductory economics classes), but it doesn't mean you'll produce valid criticism from it.
I interpreted it as follows:
If unemployment is indeed down (and he asserts that it is) then the supply of extra workers is down also.
The salaries, following the supply/demand ratio, should be up. And they are not.
Since they're not, the law of supply/demand dictating 'prices' does not work for worker's compensation.
If unemployment is indeed down (and he asserts that it is) then the supply of extra workers is down also.
The salaries, following the supply/demand ratio, should be up. And they are not.
Since they're not, the law of supply/demand dictating 'prices' does not work for worker's compensation.
What people call "salaries" does not include employer cost of benefits. For instance, US health care spending grew 4.3% in 2016 [0]. Since many employers cover health care in the US, a growth in health care expenditures on the employer side can be seen as a increase in salary. And since health care benefits is a disproportionate amount for low or middle income workers, this will hamper their wage growth the most in relative terms.
In other words, if 25% of your "pay" is health care, and health care is growing at 4%, your effective "salary" can be said to be growing at 1% as long as your premiums and coverage stay the same.
[0] https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...
In other words, if 25% of your "pay" is health care, and health care is growing at 4%, your effective "salary" can be said to be growing at 1% as long as your premiums and coverage stay the same.
[0] https://www.cms.gov/Research-Statistics-Data-and-Systems/Sta...
I think the meager growth in health care spending is not nearly big enough to cover the discrepancy between the increase in salaries predicted by extrapolating market forces and what the salaries actually are.
Not to mention, most low paying jobs don't provide health care.
Not to mention, most low paying jobs don't provide health care.
This is something that can easily be referenced. Benefits make up around 30% of workers wages with health insurance around 8%. If health care expenditures grow at 4%, that's 0.32% wage growth from health care costs. You may consider that insiginificant but I don't.
https://www.bls.gov/news.release/ecec.nr0.htm
https://www.bls.gov/news.release/ecec.nr0.htm
> If health care expenditures grow at 4%, that's 0.32% wage growth from health care costs.
So if you earn $100,000 each year you get a raise of $320 due to health care? To be honest with you, that seems pretty insignificant. And it's also sort of a feedback loop - the quality of care isn't increasing - the system is only costing more because the system can charge more. All that's doing is accounting for "healthcare inflation", and if a cost of living raise is a significant raise, something is wrong.
So if you earn $100,000 each year you get a raise of $320 due to health care? To be honest with you, that seems pretty insignificant. And it's also sort of a feedback loop - the quality of care isn't increasing - the system is only costing more because the system can charge more. All that's doing is accounting for "healthcare inflation", and if a cost of living raise is a significant raise, something is wrong.
Excellent point!
Healthcare truly should be the #1 policy discussion in the US, due to the magnitude of its economic impact and how the current status quo is not supported by economists on either side of the aisle.
I wish that someone drafted some economic-concensus presidential mandates for trump to irresponsibly sign before his term is over and someone argues for socialization of healthcare.
Healthcare truly should be the #1 policy discussion in the US, due to the magnitude of its economic impact and how the current status quo is not supported by economists on either side of the aisle.
I wish that someone drafted some economic-concensus presidential mandates for trump to irresponsibly sign before his term is over and someone argues for socialization of healthcare.
> The salaries, following the supply/demand ratio, should be up. And they are not.
Supply and demand says that offers will go up. And they have. After all, if you are unemployed, employers see your value as being less than the amount you are willing to work for (which can be no lower than minimum wage). If they could hire you for $0, or a negative amount, they most certainly would. There is always some price point where it is worthwhile.
Those rising offers is what has allowed those previously unemployed to find jobs with agreeable compensation and join the employed where previously offers were not high enough to reach an agreement (by choice or due to the law).
> Since they're not, the law of supply/demand dictating 'prices' does not work for worker's compensation.
The law of supply and demand is being observed exactly as expected here.
Supply and demand says that offers will go up. And they have. After all, if you are unemployed, employers see your value as being less than the amount you are willing to work for (which can be no lower than minimum wage). If they could hire you for $0, or a negative amount, they most certainly would. There is always some price point where it is worthwhile.
Those rising offers is what has allowed those previously unemployed to find jobs with agreeable compensation and join the employed where previously offers were not high enough to reach an agreement (by choice or due to the law).
> Since they're not, the law of supply/demand dictating 'prices' does not work for worker's compensation.
The law of supply and demand is being observed exactly as expected here.
Supply and demand can be affected by externalities. In the labor market, those externalities include legal discrepancies between individuals and companies as well as international trade. With inappropriately cheap shipping costs local labor is competing against foreign labor. So the model would have to take into account wage levels abroad. Ie until US wages sink to Brazilian, Chinese, and Indian levels no broad wage increases are likely locally (as a strong interpretation).
Other things to keep in mind:
- Labor market is bigger than a single country
- Other costs may affect wages (if profits are squeezed, increased competition, rising costs of goods or benefits, etc)
- Government policies impact wages (law of unintended consequences)
Or there are a lot of hidden unemployed that are not captured by the statistics.
A law is a universal truth. If you find that empirical evidence disproves it, clearly it is not universal, and you cannot call it a law without suffixing it with exceptions.
Following from this, supply and demand is a tendency, not a law.
Following from this, supply and demand is a tendency, not a law.
Anyone who'd read even an introductory economics text would know that such laws are defined "ceteris paribus", meaning all other things being equal. Like in physics: the fact that a law that assumes something is a perfect sphere doesn't work perfectly when something is not a perfect sphere doesn't disprove the law, it just shows that it alone isn't sufficient to model complex phenomena.
Also, the poster has not applied the law. He is saying that because the labor supply in the US is low, wages should be up. However, the US can outsource functions, which means that the labor supply is bigger than the US.
The law of supply and demand is a law, but many people don't understand that it is a law in a very basic economic model with major assumptions. If you remove the assumptions in real life, then of course the law will no longer always hold.
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.
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.
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...
The shadowstats metric is an estimate based on "proprietary modeling". In other words, it's made up with no real methodological backing. The people running shadowstats are pushing a political agenda, not doing real economics.
> The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers.
You can argue the accuracy of the numbers or estimates, but my understanding it is just supposed to take into account long-term discouraged workers, which you can decide whether they matter or not, which are not reflected in official numbers since 1994 according to SGS.
You can argue the accuracy of the numbers or estimates, but my understanding it is just supposed to take into account long-term discouraged workers, which you can decide whether they matter or not, which are not reflected in official numbers since 1994 according to SGS.
> You can argue the accuracy of the numbers or estimates, but my understanding it is just supposed to take into account long-term discouraged workers
Sure, and my estimate (based on very sophisticated modeling I won't give you any details about) is that the number of long-term discouraged workers is exactly 42.
Here's the entirety of SGS's stated methodology for their estimate by the way:
> The ShadowStats number—a broad unemployment measure more in line with common experience—is my estimate. The approximation of the ShadowStats “long-term discouraged worker” category—those otherwise largely defined out of statistical existence in 1994—reflects proprietary modeling based on a variety of private and public surveying over the last two-plus decades.
SGS's estimates don't even pass basic plausibility tests either. For example, in May 2015 the SGS metric was 23%. Using the published U6 for the same month, we can solve for SGS's estimate for the number of long term discouraged workers: 26,114,100. That's 4x the BLS's estimate of people who wanted a job but did not not have one (6,536,000) and 7x the number who wanted a job and had not looked at least once in the last year (3,712,000) for the same time period.
What's their model? What "public and private" surveys are they taking into account? What makes up the discrepancy between their estimates and the BLS's numbers? We don't know because SGS doesn't tell us, but I think we can both make an educated guess; their numbers are pulled out of their underwear.
Sure, and my estimate (based on very sophisticated modeling I won't give you any details about) is that the number of long-term discouraged workers is exactly 42.
Here's the entirety of SGS's stated methodology for their estimate by the way:
> The ShadowStats number—a broad unemployment measure more in line with common experience—is my estimate. The approximation of the ShadowStats “long-term discouraged worker” category—those otherwise largely defined out of statistical existence in 1994—reflects proprietary modeling based on a variety of private and public surveying over the last two-plus decades.
SGS's estimates don't even pass basic plausibility tests either. For example, in May 2015 the SGS metric was 23%. Using the published U6 for the same month, we can solve for SGS's estimate for the number of long term discouraged workers: 26,114,100. That's 4x the BLS's estimate of people who wanted a job but did not not have one (6,536,000) and 7x the number who wanted a job and had not looked at least once in the last year (3,712,000) for the same time period.
What's their model? What "public and private" surveys are they taking into account? What makes up the discrepancy between their estimates and the BLS's numbers? We don't know because SGS doesn't tell us, but I think we can both make an educated guess; their numbers are pulled out of their underwear.
True. In the long term, these alternate definitions don't correlate.
Long term "discouragement" is one that comes up relatively often because it can relate to political hot topics.
Even more interesting (to me) are some long term trends that are outside of most unemployment debates. Eg
(1) The long term implications are more about demography than economics, societal age structures and such.
(2)The biggest mover of the last couple of generations has been women's employment. The employee pool basically skyrocketed. Employment/unemployment rates have not been overly impacted by this rapid increase in labour supply. This is still happening. The pool of experienced, female 58 year old lawyers is impacted by the norms/trends if the 80s.
I think this shows how much flexibility the employment system has. Aggregating encourages us to think of demand for labour in macro (kind of Keynesian) terms. I think the truth is that demand for marginal labour (the difference between 4% and 8% in traditional/official unemployment measures) is different to the general demand.
In other words, some portion of the population (different individuals at different times) is harder to employ. That doesn't mean it will look struggle to employ a different pool. If we had another gender to liberate, I think the market could probably absorb it regardless of without impacting unemployment rates very much.
Long term "discouragement" is one that comes up relatively often because it can relate to political hot topics.
Even more interesting (to me) are some long term trends that are outside of most unemployment debates. Eg
(1) The long term implications are more about demography than economics, societal age structures and such.
(2)The biggest mover of the last couple of generations has been women's employment. The employee pool basically skyrocketed. Employment/unemployment rates have not been overly impacted by this rapid increase in labour supply. This is still happening. The pool of experienced, female 58 year old lawyers is impacted by the norms/trends if the 80s.
I think this shows how much flexibility the employment system has. Aggregating encourages us to think of demand for labour in macro (kind of Keynesian) terms. I think the truth is that demand for marginal labour (the difference between 4% and 8% in traditional/official unemployment measures) is different to the general demand.
In other words, some portion of the population (different individuals at different times) is harder to employ. That doesn't mean it will look struggle to employ a different pool. If we had another gender to liberate, I think the market could probably absorb it regardless of without impacting unemployment rates very much.
> 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.
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.
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.
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.
Link, or way to do that?
This isn't exactly what you want, but it should give you the idea: https://fred.stlouisfed.org/graph/?g=lfQt
Well for one just look at the 5-7% annual increase in employer healthcare costs for the last couple decades, and despair :/. It's like 3-4x as expensive as it was 20 years ago for employers to offer health insurance.
And yet, employers prefer the employer-provided health insurance model, because it increases the friction of switching/quitting jobs.
> And yet, employers prefer the employer-provided health insurance model, because it increases the friction of switching/quitting jobs.
Where do people get this idea from?
No, employers do not prefer the employer-provided model. Especially at scale (employers with more than about 1000 employees), it's dramatically more expensive for them than it would be if they didn't have to operate health plans themselves, and instead could pay employees more to purchase comparable health insurance independently. However, employers aren't the culprit, because they can't change that part of the system. The only choice an employer can make is what kind of health insurance to offer.
There's one backdoor - employers can offer a cafeteria plan, which is what a few employers (like Netflix) do, but in most states, there simply are no good plans (at any price) for health insurance that are comparable to what an employer can provide, so this option is rarely used.
Where do people get this idea from?
No, employers do not prefer the employer-provided model. Especially at scale (employers with more than about 1000 employees), it's dramatically more expensive for them than it would be if they didn't have to operate health plans themselves, and instead could pay employees more to purchase comparable health insurance independently. However, employers aren't the culprit, because they can't change that part of the system. The only choice an employer can make is what kind of health insurance to offer.
There's one backdoor - employers can offer a cafeteria plan, which is what a few employers (like Netflix) do, but in most states, there simply are no good plans (at any price) for health insurance that are comparable to what an employer can provide, so this option is rarely used.
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.
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.
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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.
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.
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.
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.
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.
theyre not unemployed because theyre not in the workforce
Well they should be counted. How many had to resort to crime because of no employment opportunities? That’s the real question and I would surmise that there is a percent greater than 0 that would not have stolen or robbed a bank if they had the given job opportunity.
I have heard a bunch of people going into credit card stealing because it pays more than min wage.
I have heard a bunch of people going into credit card stealing because it pays more than min wage.
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.
What is your point? It is relatively high but falling.
> 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).
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).
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...
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...
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.
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.
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.
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.
So you have the ability to "stop this bullshit" yourself, at least for the Economist's current page design.
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?
A HUGE banner ad up the top and two big ads along the right hand side. Guess who'll be cancelling his fledgeling subscription?
If you are on Firefox: https://addons.mozilla.org/en-US/firefox/addon/in-page-pop-u...
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.
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.
> 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.
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.
I just don't think the online news media will learn anything from tangential HN discussions so we might as well do away with these types of comments and either discuss the article's content or not visit the link at all. I think that's the proper etiquette, unless of course there's something exceptional worth noting.
I too wish this terrible UX was an exception, don't get me wrong.
I too wish this terrible UX was an exception, don't get me wrong.
> 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.
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.
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.
And it isn't every thread. It's usually the most egregious examples that people point out.
I didn't defend anything and I'm not a media employee. I complained about a common type of comment that is low effort and doesn't advance discussion, in my opinion at least.
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.
> Stop this bullshit, it is unacceptable.
You are getting a free article, having to put up with those popups seems acceptable to me
You are getting a free article, having to put up with those popups seems acceptable to me
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.
But can it live without freeloading readers? I don’t know the answer to that but it’s certainly not as simple as ‘sparkling having a dramatic power over the publisher.
If he won’t pay for subscriptions and he won’t view their ads (nor participate in the governmental mandates he can vote on) why should the economist serve him content at all?
If he won’t pay for subscriptions and he won’t view their ads (nor participate in the governmental mandates he can vote on) why should the economist serve him content at all?
Will it convert any freeloaders into subscriptions by nagging them with 4 popups before they can even read the content?
It's not free. People are paying the economist with their time.
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.)
By "popup", i dont mean a extra browser window, but in-page overlays
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?
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?
I think that the trend has been like this for a long time...
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.
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.
> 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.
> 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.
Controlling the supply of money is all the Fed is doing here, which is nothing even similar to central planning.
There is no free market on the price of money. This is exactly central planning.
A centrally planned economy is where a single central authority determines how investment and capital will be allocated. Controlling the supply of money is not capital allocation, and it is not central planning. Central planning is not simply any time a central authority does anything at all.
> A centrally planned economy is where a single central authority determines how investment and capital will be allocated.
I think you might be getting too semantic here. If you looked up the definition of a centrally-planned economy in an academic economics book, that might be what you get.
When the Fed or any central bank lets one institution fail, saves another, buys more or less government debt, purchases mortgage-backed securities, or any other security, I don't see how you could not call that central planning, investment, or capital allocation.
I think you might be getting too semantic here. If you looked up the definition of a centrally-planned economy in an academic economics book, that might be what you get.
When the Fed or any central bank lets one institution fail, saves another, buys more or less government debt, purchases mortgage-backed securities, or any other security, I don't see how you could not call that central planning, investment, or capital allocation.
Because in this case no central authority has a monopoly on resource allocation, or even anything that comes close to a meanful level of control over resource allocation.
Central planning is a very well defined system of economics, and involves an authority taking almost complete control of the supply side. The federal reserve system does not resemble this in any way. The Fed isn’t particularly interested in how resources are allocated, and generally only concerns itself with the supply of money, and maintaining stability in the market. It has no opinion on what goods and services should be supplied.
The existence of a central bank does not equate to a planned economy.
Central planning is a very well defined system of economics, and involves an authority taking almost complete control of the supply side. The federal reserve system does not resemble this in any way. The Fed isn’t particularly interested in how resources are allocated, and generally only concerns itself with the supply of money, and maintaining stability in the market. It has no opinion on what goods and services should be supplied.
The existence of a central bank does not equate to a planned economy.
Can you outline a scenario in which there exists no central bank?
While everything you have said is true, I feel as though there exist giant icebergs gliding silently past your watertight steel hull.
While everything you have said is true, I feel as though there exist giant icebergs gliding silently past your watertight steel hull.
A central banks job is really only to control the flow of money. There’s a few decentralized alternative models out there. That’s what bitcoin and all other cryptocurrencies are.
I really don’t know what the second part of your comment is getting at though...
I really don’t know what the second part of your comment is getting at though...
Cryptocurrencies are not used directly in the purchase of stock, real estate or consumer transactions - this isn't an attack on them - just an observation that private banks used to issue money before central banks existed - and those monies would have been used for those sorts of purchases. Presently cryptocurrencies in use look more similar to those tokens/vouchers companies offer except with a secondary market, esp. the ICO model.
I was pondering at the idea that central banking or any regulation of capital flow in society is a strange topic. Central banks are these organizations - people dressed in suits, they have office chairs and receptionists - but this window dressing as corporation or government office distracts us from what is a very strange topic. You have this complex network represented by a number. What is being said by this? That the Federal Reverse is economic homeostasis and the interest rate represents the equilibrium?
Half the time I think central banks make sense and the other half of it I think everybody must be insane. Seems like we could use the rationale for central banking to perform other activities, like population control. Nobody makes the case for something like that but how is it crazier? They're different forms of capital, right?
I was pondering at the idea that central banking or any regulation of capital flow in society is a strange topic. Central banks are these organizations - people dressed in suits, they have office chairs and receptionists - but this window dressing as corporation or government office distracts us from what is a very strange topic. You have this complex network represented by a number. What is being said by this? That the Federal Reverse is economic homeostasis and the interest rate represents the equilibrium?
Half the time I think central banks make sense and the other half of it I think everybody must be insane. Seems like we could use the rationale for central banking to perform other activities, like population control. Nobody makes the case for something like that but how is it crazier? They're different forms of capital, right?
Perhaps your error is thinking of currency as a part of the natural world, rather than what it really is, an invented medium of exchange. In order for it to work in its intended fashion, it must have some scarcity. It can’t be so scarce that it hinders growth, and it can’t be so abundant that it causes too much inflation. It’s not the only means of exchange, it’s simply the most efficient one, and the role of the central bank is primarily to maintain appropriate balance between the forces that push and pull on the money supply.
I realize money is an abstraction - what I'm saying is that the model - its mapping onto real activity is questionable to people besides hippies. Usually when a small town or community provide their own currency there is an surge of economic prosperity. Eventually central banks act as a leveler and the connection between small businesses like startups and the macroeconomy is so attenuated it might be compared to those projects in physics to reconcile small physics and big physics.
The topic is much more mysterious than you're allowing for!
The topic is much more mysterious than you're allowing for!
Then central planning is a Good Thing.
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.
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.
>you'd swear we were living in a communist society
Communism has no money though? Time to read what Communism actually means!
Communism has no money though? Time to read what Communism actually means!
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.
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.
Also might be time for a minimum wage increase too.
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.
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.
Why is getting unemployed people back into the workforce wasted spend?
at least on the surface it looks like a subsidy for companies that pay too little (and workers can accept "too little" when in conjunction with said subsidies) . If it was too little to live off, with subsidies removed, workers would demand more pay and we'd stop underwriting businesses that do not warrant their underlying resources (the workers).
It sounds like you're discussing low-income benefits and not unemployment benefits. Unemployment kicks in when you are actively searching for a job but can't find one - not when you are underemployed. Your issue is definitely real, just separate.
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
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
An increase of minimum wage does kill jobs, so yes, if you want higher unemployment, it's the measure.
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.
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.
The problem with current government support, AFIACT, is that getting off it may be plainly unprofitable: the take-home sum decreases as your wage slightly increases, and you're no more eligible. This needs to be fixed.
Having relevant experience is so important that people go to unpaid internship programs to gain it. But the key word here is "relevant"; IDK if minimum-wage jobs provide a lot of it. They could, though, it less sexy industries than IT.
Having relevant experience is so important that people go to unpaid internship programs to gain it. But the key word here is "relevant"; IDK if minimum-wage jobs provide a lot of it. They could, though, it less sexy industries than IT.
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.