Over at FiveThirtyEight in a post about why white Americans are so pessimistic, Ben Casselman makes a good observation:
Why aren’t companies filling their open jobs? One popular theory is that they can’t find workers with the right skills. That may be true in some industries such as construction, but there’s little evidence for it on a broader level; in particular, wage growth has been weak, which suggests companies aren’t being forced to raise pay to attract qualified workers. More likely, there has been a shift in the way companies recruit workers, perhaps because online job sites have made it easier for companies to post positions they aren’t committed to filling. But whatever the explanation, there’s reason to think a “job opening†doesn’t mean what it used to.
The emphasis is mine. Back in the old days when I worked for a German company, when the company had job openings it would routinely post the openings somewhere obscure—for example, on the bulletin board of a plant somewhere in South Dakota. Then it could reasonably and truthfully say it had advertised the opening and found no takers. Then it could bring in foreign workers, mostly Brits and Aussies—that was in the pre-Thatcher days.
I think the simplest answer is that the wages being offered are below the market clearing price for labor with the skills required for the job on offer. That doesn’t mean that there are no workers with the skills. It means that employers refuse to pay what the jobs are worth, secure in the knowledge they can bring in foreign workers who’ll work for less.
An uncharitable reading of that article suggests that a substantial portion of white Americans are angry because their lives are becoming more like those of black and Hispanic Americans. White Americans have more money, but not being dumb, they can see the writing on the wall.
My own view is that it’s due to the mismatch between expectations and reality.
Your explanation has some merit. Wages aren’t moving so companies aren’t really trying to fill positions. I also wonder if the very nature of online advertising for jobs has changed things. I think I still have some advertised jobs sitting out on the internet. It is so cheap to advertise on the net, and often it is free.
Steve
He talks in circles. He cites poor wage growth and low jobs filled per opening ratio, and then tells us the jobs weren’t really there on offer. Well……. Add to that his airy dismissal of those who have left the workforce, yet all numbers I’ve seen show very significant exits. Hard to take him seriously.
It’s uncharacteristic of you to jump to dark side conclusions. I can speak to some dynamics of two classes of employee. As for relatively senior positions, I’ve never seen any systematic (or even somewhat frequent) passing over good candidates over compensation issues. These people are too hard to come by. As for low level employees, finding people with basic skills, or willing to work for pay commensurate with prevailing or “affordable” market wages is difficult. The costs of turnover are huge, and the ability to pass through wage costs limited. It’s a rare burger joint, pizza delivery guy, retail clerk or Wal-Mart greeter who is worth $15/hr. We are seeing the effects of min wage laws real time in the economy.
I can’t really speak to the middle. But let’s stipulate that foreign workers will work cheaper. Globalization is unstoppable. It seems that a first step is enforcing immigration laws, and going from there. I’m not impressed that either Obama or Clinton will have anything to do with that. God forbid limiting immigrants. That’s xenophobic don’t you know……..
Globalization isn’t some unstoppable force. It is a set of policy decisions. Policies can be changed.
Or perhaps in times of uncertainty companies go turtle.
Ice, you know what I mean. Social security isn’t an unstoppable force; it’s a policy decision. Go ahead, try to change it.
Guarneri — “The costs of turnover are huge, and the ability to pass through wage costs limited. It’s a rare burger joint, pizza delivery guy, retail clerk or Wal-Mart greeter who is worth $15/hr. We are seeing the effects of min wage laws real time in the economy.”
If a business can only survive when the workers earn so little that they qualify for government assistance, maybe that business isn’t one that helps the economy.