One thought that I ultimately removed from the original post last month was how our general cluelessness regarding the basic fundamentals of economics might manifest in the same behaviors as that of a greedy person. I remember this summer while looking for an apartment that most of the units I saw had been vacant for months, with realtors revealing that the landlords were simply unwilling to go beyond trivial concessions on their listing price. Would I be willing to put in an offer a couple hundred dollars lower than listing, just to help them understand the market and start a conversation about lowering the price? It made sense to me, but not for me, so I never took the next step in these situations.
Or maybe, I just fell into the flow of the conversation, nodding along to keep things moving, and only pausing in retrospect a few hours later to question whether this would address the root cause of the problem. Was the issue really a lack of information about the market? Wasn't the fact of widespread vacancy enough evidence? My building's on-site superintendent was adamant that greedy landlords preferred to leave units vacant at a higher listing rather than settle for a lower rent, a position perhaps influenced (and supported) by the multiple units in our building that endured extended vacancies during the pandemic. But I think at some point the math undermines the argument. When we are talking about two or three hundred dollars per month, I have to suspect that even the dimmest landlords will recognize how a short vacancy can wipe away the difference over the course of a year's lease. I think the problem was more that the landlords felt the shortage of prospective renters was the fact of a fixed condition rather than a simpler issue of mispriced units, this conviction perhaps reinforced by a muted response to a token decrease or two from earlier in the rental season, and this conclusion left them feeling powerless to generate new interest in their units via the mechanism of lowering the listed rent.
Would it have helped these landlords to learn that I had offered two hundred dollars below listing? It surely couldn't have hurt, but I don't think it would have made the difference. What the landlords needed to see, and I think this did come about eventually, was how units at lower listings were becoming more competitive. The logical next step would be to wait until some of those units started coming off the market, at which point a trivial rent decrease could entice anyone remaining to look at a slightly higher price point, a neat process that always ends somewhere in the middle. If the landlords had initially lowered their rent to a competitive level, they would presumably have competed against lesser units already priced at that number, and their units would have moved to the front of the line. But if their is a clear superior between two apartments listed at the same price, then why list them at the same price? This uncertainty loop is probably what kept those vacant units at their original listings for such a long time.
I don't think there is a clear connection anymore with this line of thinking to that of the original wage shortage post, which I hope clarifies why I took it out of the final. But I do think there is a lesson that applies - in the apartment example, the only reason to move first and lower the listing is to rent the unit as quickly as possible. I suspect that one underreported aspect of the labor shortage is related to how certain fields don't need to fill their openings with the strictest urgency. Much like how a landlord with no need for immediate rental income can afford to hold off on filling a vacancy, a business with the ability to operate at reduced capacity has no existential urgency to hire for openings. These firms may list jobs and complain about being unable to find workers, but if there is no intention to increase wages then it seems unproductive to me that it would be counted among those openings where the firm is doing everything possible to attract new hires.
