I am astonished that James Sherk can write about reduced labor demand without mentioning either automation or offshoring or increased labor supply without mentioning immigration.
How in the heck can you write about wage stagnation without mentioning most of the factors contributing to wage stagnation?
Because he’s a paid shill trying to provide cover to the efforts of pols and large businesses to crush wages in this country?
Ah, he works for the Heritage Foundation, so SCORE!
I think immigration is implicitly obvious in the supply discussion.
Not mentioning off shoring is clearly a blunder, but automation probably a relatively minor effect. I might add, the increased cost to employ will only accelerate automation……….unless I missed the robot clause in the ObamaCare legislation. Entirely possible given that know one knew all that was in it.
I don’t think either labor automation or immigration contribute to the disparity between labor supply and labor demand for these reasons:
1. Demand always equals supply in a free market with no friction. It would in labor, too, if we eliminated the friction caused by taxes, FICA, Obamacare, Workers’ Comp, minimum wage rules, tenure, sinecure, public-employee unions and other regulatory types of friction.
2. Blaming the problem on automation is silly. I have seen steadily increasing automation over my lifetime, as did my dad who was born before radio, TV, automobile, electric lighting, refrigerators, airplanes, A/C, computers and so on. Neither of us was put out of work by advances in automation. The work changed, and some people adapted. Those were the smart and educated ones.
Nowadays, of course, younguns can’t adapt because higher-level training is needed than before and they’ve been mis-educated in public schools, learning poor English and taught little STEM by lousy teachers.
3. Blaming the problem on immigration is also silly, since every immigrant is also a consumer. The question to ask is whether an immigrant makes, or has the potential to make, a net contribution to society. The same question should, of course, be asked of the USSA breeder: will your kid make a net contribution? Sadly, the answer is “NO” in many cases, and in these cases the breeding pair should be denied the right to breed, certainly as long as capable and willing immigrants can be found.
I started work outside the home at age 8, farming and selling door-to-door. Nowadays you can’t find a USSA breeder’s kid who can paint the house, mow the lawn, shovel snow or stack firewood. And they spend more time sexting than doing homework!
I hire every Mexican or Central American who knocks on my door looking for work, and I see why Facebook wants to let in more foreigners on H1-B visas, claiming it can’t find enough USSA workers with both an education and a work ethic. The real kicker is that the foreign immigrant often speaks better English than the USSA brood does!
Demand and supply very closely reach an equilibrium, even with friction, which is a phenomenon of kinetics. They just don’t reach the same equilibrium.
Reynolds has apparently left the building, but you need to consult him and his fellow Luddites for an opposing argument. Whats wrong, you would prefer to still have 9 tilling the fields with hand tools rather than 1 with a tractor ??
“Blaming” immigrants isn’t silly, it’s just not cast properly. Depending on your point of view immigrants either save consumers from, or cut off the balls of workers by, disrupting monopoly power.
… the breeding pair should be denied the right to breed …
I was worried, but now, I know @Jimbino is back.
“How in the heck can you write about wage stagnation without mentioning most of the factors contributing to wage stagnation?”
Because he thinks he did? Remember the story of the three blind men who met an elephant and couldn’t figure out what the beast looked like. Economists are professional blind men. There are certain rather abstract big variables they pay attention to — like demand for labor and percentages of working folks — and many other variables they regard as irrelevant. It doesn’t matter, for example, how many people with Irish or Italian ancestry are in the work force, so why should it matter how many workers are illegal immigrants? That’s an issue for sociology or law enforcement, not economists.
I sometimes want to pull my diminishing hair out, screaming that we need to build new industries up — planetary colonization, sea floor mining, nanotechnology — rather than focus all our business men on computerization and finance. It seems so obvious that we need new and expanding forms of enterprise to employ millions of workers and increase wealth. But economists don’t see that, and aren’t interested in that; at best, they’ll mumble about “having picked all the low-lying fruit” and turn to more exciting stuff like restaurant reviews.
Do you have even a crude estimate, Shupp, of the return to planetary colonization or other wild assed ventures? I’m always being told businessmen are greedy bastards who will give anything for a buck. How could they miss the easy money?
And while you are at it, could explain in some reasonable detail what you mean by focusing on finance? As opposed to what. What specific activities does it entail? How should those resources be redeployed, and how did they get miss allocated?