I guess this leads me to a certain point of confusion - isn't this a basic problem where the simple answer is to raise wages? If I walk into the store and offer two bucks for a three-dollar item, the answer is always no, but if everyone does the same thing for a few weeks then eventually the price comes down. Hiring is technically more complicated than that example but in the general sense it's the same idea. I'm sure some firms are coming around and offering better pay packages, but if so then the details are somehow failing to make the front pages. My hunch is that this is not happening, or at least not happening fast enough or widely enough or consistently enough to resolve the current labor shortage. It's tempting to suggest that this is another example of corporate greed running amok, an observation supported with just a casual glance at the stock market - corporate profits seem larger than ever, yet for some reason they can't offer people enough money to take a job.
Of course, it could just as easily be the case that greed has nothing to do with it, the problem merely being that finance departments have a natural aversion to increasing wages - we could raise the wage by X percent, but we've always had people available to work at the traditional rate. It may simply be a matter of time until these departments come around and accept the current situation. It's hard to know the difference between a permanent shift in the market and a temporary timing problem, so it's no surprise that such departments would move slowly before committing to a change. But I am starting to think that we now have enough evidence in this case. Hasn't this been a topic of discussion for months? I think firms are either being willfully ignorant or incapable of grasping the logic. Isn't the other big story at the moment about inflation? If the price of everything is rising, then so should the price of employees. But again, maybe it's just hard to see the need for a change, a situation being enabled by the constantly recycled narrative that since there is a shortage, then no one is available at any reasonable price. I suppose at the very least that believing this also has the advantage of excusing you from handing out raises to your current staff.
Perhaps the other side could present the argument that maybe job seekers are simply enjoying their unemployment benefits, which offered too much of a cushion. There are always some stories out there of people "being paid more to not work" but such anecdotes rarely expand the analysis beyond the transactional. Trust me folks, I've paid taxes on unemployment, and they show up in far more places than the 1040 or the W-2 or wherever. But I think the stronger point I can make is that this is yet another signal of the need for higher wages - if the government is paying people so much unemployment money that business owners are convinced people are "being paid more to not work", then I think the next logical step would be to increase wages. I'm not here to trot out the statistics, but I will point out that when Massachusetts's minimum wage becomes $15 in 2023, it calculates out to $30,000 a year for someone working forty hours a week, fifty weeks a year. I'm sure many folks out there would love to spend hours explaining to me how that's supposed to work, but I'd rather use that time to figure out how to increase wages.
As usual, nothing I say can or will (or should) change the state of affairs, so let's wrap up and get back to (not) work, which is our short-term reality. But is there hope for the future? We can count on things improving in the long run, that mythical horizon for which there are so many famous economic aphorisms, a category that I add to now with my own version - in the long run, we all move slow. Perhaps the most relevant personal example I can share is that each time I've arrived at the Veggie Galaxy, the prices have been the same. The missing piece with everything I've discussed so far is me, since the amount I pay on the tab is where you get increased wages, triggering the theory of synchronized movement which economists have mostly failed to notice ever actually happens in real life. Am I willing to pay $21 for a can of beer? Sure, maybe if my salary tripled. Would my employer triple my salary? Absolutely, if their revenues tripled. Could their revenues triple? Without question, if customers paid triple for their goods and services. What do those goods and services cost now? Well, I'm not sure, but this can of beer still costs $7, and it's going to cost $7 until someone wants to go first, so - who wants to pay $21 for a can of beer?
