Why Aren’t Jobs Being Filled?

In his column in the New York Times Neil Irwin raises an interesting question: how can the unemployment rate be so high while employers are unable to find people to hire?

There are two distinct, and completely opposite, ways of looking at the American job market.

One would be to consult the data tables produced every month by the Bureau of Labor Statistics, which suggest a plentiful supply of would-be workers. The unemployment rate is 6 percent, representing 9.7 million Americans who say they are actively looking for work.

Alternately, you could search for news articles mentioning “labor shortage.” You will find dozens in which businesses, especially in the restaurant and other service industries, say they face a potentially catastrophic inability to hire. The anecdotes come from the biggest metropolitan areas and from small towns, as well as from tourist destinations of all varieties.

The explanations he explores are:

  • Benefits are too generous
  • People are worried about getting sick
  • They’re still needed at home
  • They’re not being offered enough money
  • They’re reconsidering earlier career decisions

I suspect that all of those are true to some extent but I’d like to offer another he doesn’t mention. It’s something I’ve been aware of for 50 years. The jobs that employers advertise don’t always exist. There are many reasons for that including they’re reality checking their present pay scales, they’re testing the pool of hirees to see who’s out there, or they’re trying to make a case for hiring an H1-B worker. In tech jobs it’s not uncommon to list jobs with ridiculously specific lists of requirements. One of the most notorious was the ad in 1983 for an experienced IBM PC programmer.

I’m not sure how you’d go about testing my explanation empirically.

Update

Here are some more explanations. Two career families make it hard to relocate for jobs. And members of racial and ethnic minorities may be less predisposed to relocate for work. It means leaving their support systems behind and they may not be able to re-establish them in the new location.

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Evaluating Lightfoot

In the Chicago Tribune Gregory Pratt evaluates Lori Lightfoot’s term as Chicago’s mayor which is closing in on its second year:

As Lori Lightfoot rose in the polls against better known rivals two years ago, she pulled together nearly $300,000 to launch her first television ad.

In the commercial, first aired in January 2019, Lightfoot walked into a dark room, flicked on the lights and said, “I’ve prosecuted corrupt aldermen and held police accountable. Now, I’m running for mayor to finally make City Hall work for you.”

Speaking directly into the camera, Lightfoot said she supports an elected school board, “making all neighborhoods safe and reducing the unfair tax burden on working families.”

The ad, combined with intense fallout from the federal corruption case against Ald. Edward Burke, helped propel Lightfoot into a runoff against Cook County Board President Toni Preckwinkle.

But in the two years since she won that runoff election, Lightfoot has not unveiled a plan to create an elected school board. Nor has she formally introduced a plan to create civilian oversight of police, a promise she pledged to fulfill during her first 100 days in office. Lightfoot also has not yet put forward a plan to end or significantly curtail the long-standing practice that allows Chicago aldermen to hold sway over zoning matters in their individual wards.

Let me give you the short version: not only has she not made good on any of her campaign promises, in some cases she has done the opposite. Furthermore, she is the only Chicago mayor during whose term of office Michigan Avenue has been looted by rioters and, at least according to any objective measures, her policy response to the challenges imposed by COVID-19 has been weak. The only good thing I can say about Mayor Lightfoot is that she isn’t Toni Preckwinkle who didn’t carry a single ward in the mayoral run-off election.

You can’t blame Chicago’s black voters for the debacle of the last two years—the plurality of black voters voted for a candidate other than either of those two in the primaries.

The piece concludes:

Others have expressed disappointment in the mayor for not yet following through on her campaign promise.

Roderick Wilson, executive director of the Lugenia Burns Hope Center and a Chicago Public Schools parent who is involved with the campaign for an elected school board, said he’s disappointed by the mayor’s opposition to the Martwick bill as well as her failure to put something forward.

“People do what’s important to them,” Wilson said. “If It was a priority, it would’ve been there.”

Mayor Lightfoot is presently being pressured to resign over the killing of Adam Toledo by a Chicago police officer and there are rumors of a sex scandal. Interesting times.

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A Rosy Scenario for Immigration Reform

In an op-ed in the Washington Post President George W. Bush presents a remarkably rosy scenario for reforming immigration. According to him there are six areas on which both Republicans and Democrats can agree:

  • Deferred Action for Childhood Arrivals (DACA)
  • Controlling the border
  • Support for development in Central American countries
  • A modernized asylum system
  • Increasing legal immigration
  • Bringing illegal immigrants already here “out of the shadows”

and concludes

Over the years, our instincts have always tended toward fairness and generosity. The reward has been generations of grateful, hard-working, self-reliant, patriotic Americans who came here by choice.

If we trust those instincts in the current debate, then bipartisan reform is possible. And we will again see immigration for what it is: not a problem and source of discord, but a great and defining asset of the United States.

My own view is that the only one of those measures on which a compromise is possible is DACA and even that will be difficult despite the measure being popular in the abstract because the two political parties cannot agree on the details. What is the objective? Who would qualify? How would claims be proven? The Republicans aren’t the Republicans he remembers, the Democrats aren’t the Democrats he remembers, the immigrants aren’t the immigrants he imagines, and, frankly, America isn’t as he imagines it, either.

I found this passage from early in his op-ed laughable or, at least, grossly exaggerate:

The help and respect historically accorded to new arrivals is one reason so many people still aspire and wait to become Americans.

When was that? It certainly wasn’t from 1921 to 1965. During that period a strict quota system essentially limited immigration to Northwestern Europeans. It certainly wasn’t in the 1830s and 1840s during which both New York and Philadelphia were rocked by anti-Irish riots. It wasn’t between 1882 and 1892 when the Chinese Exclusion Act made immigration China illegal. It wasn’t during the 1930s and 1940s when the U. S. refused to accept refugees from Eastern Europe. And it wasn’t during the 1930s when migrant workers from Mexico were forcibly shipped to Mexico in boxcars including some people who had been born here. What I would say is that over the last 30 years the U. S. has been more accepting of more immigrants from more different places than at any previous time in its history.

My own view is that we are desperately in need of immigration reform but it is impeded by mutual detestation on the part of our political parties and lack of agreement on the objectives of reform.

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Targeting Whites But Harming Blacks

I’m afraid that Robert L. Woodson Sr.’s words in his Wall Street Journal op-ed will fall on deaf ears:

Are only white people capable of hate crimes? If you get all your news from mainstream media sources, that’s what you’d think. A 51-year-old black man allegedly stabbing a 12-year-old white boy in Pittsburgh while shouting racial epithets barely made national news. The same was true when a black man was arrested for savagely beating a 65-year-old Asian woman in Midtown Manhattan. We saw endless coverage of the despicable assault on the Capitol on Jan. 6, but when a 25-year-old black male allegedly killed a Capitol police officer last week, MSNBC erroneously reported the suspect was white.

Throughout 2020 there was a rise in violence against Asian-Americans, but the race of the perpetrators was typically mentioned only when they were white. Media and other elites obsessively push the narrative that the greatest threat in this country is coming from “white supremacists.” This gross oversimplification has dire consequences for the most vulnerable in our society—those living in the poorest neighborhoods—and for the nation as a whole.

A media environment in which the only acceptable villains are white creates a more dangerous world for all of us. The rush to judgment based on skin color is familiar to those of us who lived through segregation. In those days, some in law enforcement couldn’t care less about crimes committed by blacks against other blacks, but there were severe penalties for offenses against whites. We marched and demanded fair and equal treatment under the law. As far as the application of criminal law, much of what is happening today is a retreat to the pre-Civil Rights South.

Every tragic police killing of a black person is amplified by radical progressives to accuse police of white supremacy and to push for defunding and anarchy. The more law-enforcement officers we lose to defunding, early retirements and drastic drops in recruitment, the fewer we have to patrol lower-income neighborhoods. Homicides among lower-income minorities soar. Meanwhile, the cries of the 81% of blacks who oppose defunding the police are chronically ignored.

concluding

Race remains a salient issue in America, but not only because of whites victimizing minorities. Yet the U.S. is the world’s most prosperous and harmonious multiracial society. We have some serious problems we must address, but we can’t solve them unless we’re willing to speak about them honestly.

There are two things that sadden me about what’s going on now. The first and most important is that most of those injured by the race-baiting that’s going on in the media right now will be black. The second is that those who are telling the rest of us that Mr. Woodson is a liar and that we’re not the “most prosperous and harmonious multiracial society” are under 50 and don’t realize how much progress we’ve made.

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If Not Now, When?

Lindsey Graham and Jack Keane, serving senator and retired general, have an op-ed in the Wall Street Journal opposing withdrawal from Afghanistan:

President Biden’s decision to withdraw all military forces from Afghanistan, against sound military advice, will come back to haunt the nation and the world, as it did in Iraq in 2011.

Only months away is the 20th anniversary of 9/11, when almost 3,000 Americans died at the hands of al Qaeda terrorists trained and directed by Osama bin Laden from Afghanistan. Surely we should have learned that allowing radical Islamists sanctuary to plot attacks against America and its allies isn’t wise. Had we destroyed the Afghanistan haven after attacks on two U.S. embassies in Africa (1998) and the USS Cole (2000) it is unlikely that 9/11 would have happened. The military and the intelligence community understand this, which is why both recommend keeping a residual counterterrorism force in Afghanistan.

In the coming months and years, the Afghan government in Kabul will slowly but surely lose influence throughout the country. The Iranians will begin to dominate western Afghanistan, and the Taliban will start to run the country’s southern region. The old Northern Alliance will reorganize. Eastern Afghanistan will be under the control of the Haqqani network, a criminal enterprise designated by the State Department as a foreign terrorist organization. The rump ISIS and al Qaeda elements sprinkled around Afghanistan will exploit the chaos.

With no American or North Atlantic Treaty Organization military presence, it will be every group for itself. Imagine outsourcing our national security to the Taliban. To expect the Taliban to police al Qaeda and ISIS is like asking the fox to guard the henhouse. It’s only a matter of time before another civil war. All of this can be avoided by keeping a small U.S.-NATO counterterrorism force in place to help the Afghan military and continue to push the parties to find political solutions to the complicated mosaic of problems in Afghanistan.

Why didn’t they advocate that five years or ten years ago? Our strategy in Afghanistan has been one of counter-insurgency, operating under the theory that viable national government in Kabul would be able to pursue counter-terrorism on its own. Sen. Graham and Gen. Keane have steadily supported our presence in Afghanistan, first under President Bush, then under President Obama and President Trump. They’ve been consistent.

And how long would such a “residual counterterrorism force” be necessary? Since the conditions they enumerate in Afghanistan have been materially the same for the last couple of millennia at least as anyone who actually knew anything about Afghanistan could have told them 20 years ago, there’s no reason to believe that force would ever be able to leave. I think that had the war in Afghanistan been advertised that way from the start there would have been no war in Afghanistan. No bombing campaign less than a “no blade of grass” strategy would have been sufficient.

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Withdrawing

I found this passage from a letter written by a parent on removing his daughter from an exclusive New York City girl’s school and published by Bari Weiss, quite telling:

I object to Brearley’s vacuous, inappropriate, and fanatical use of words such as “equity,” “diversity” and “inclusiveness.” If Brearley’s administration was truly concerned about so-called “equity,” it would be discussing the cessation of admissions preferences for legacies, siblings, and those families with especially deep pockets. If the administration was genuinely serious about “diversity,” it would not insist on the indoctrination of its students, and their families, to a single mindset, most reminiscent of the Chinese Cultural Revolution. Instead, the school would foster an environment of intellectual openness and freedom of thought. And if Brearley really cared about “inclusiveness,” the school would return to the concepts encapsulated in the motto “One Brearley,” instead of teaching the extraordinarily divisive idea that there are only, and always, two groups in this country: victims and oppressors.

l object to Brearley’s advocacy for groups and movements such as Black Lives Matter, a Marxist, anti family, heterophobic, anti-Asian and anti-Semitic organization that neither speaks for the majority of the Black community in this country, nor in any way, shape or form, represents their best interests.

As Eric Hoffer put it, “What starts out here as a mass movement ends up as a racket, a cult, or a corporation”. When the business model for these rackets (or corporations) fail, the “movements” will vanish as well but it will take a lot more actions like that of this parent for that to happen. And a removal of government subsidies.

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The Second Time Around

On Wednesday I received my second dose of the Pfizer vaccine against SARS-CoV-2. As I had anticipated the facility where the inoculations were being administered was much, much busier than it had been a little more than three weeks ago when I received my first inoculation. There were probably 500-1,000 people waiting in line. They were, of course, mostly not observing social distancing although when I looked squarely at the people in front of me and behind me in line they gave me a wider berth. I have command presence.

The inoculation itself hurt like blazes, significantly more than the first. I haven’t experienced any other side effects so far other than soreness at the inoculation site although I’m told that they can take as long as a week to manifest.

Well, now I guess I’ve done what I can in the largest clinical trial in the history of the world.

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Well, the Game Is Plentiful Anyway

I greatly enjoyed this piece by Chandler Lasch and John Hirschauer at RealClearPolitics about a pair of Illinois “watchdogs” who, according to the article are striking fear into the hearts of Illinois politicos:

Kirk Allen and John Kraft started Edgar County Watchdogs, a government-accountability nonprofit, in 2011. By appearance, it is a humble operation – Allen and Kraft are the group’s only employees. Edgar County is smaller than most Illinois townships.

In terms of impact, however, the Watchdogs punch well above their weight. Allen and Kraft’s investigative work has resulted in 186 indictments, 28 convictions, and the removal of 425 officials and bureaucrats from public office. They’ve successfully lobbied for a dozen new state transparency laws. They terrify the state’s most corrupt officials. For all their success, their approach is straightforward.

Their method is insidious and devilishly clever:

“We’re using their laws,” Allen said.

While I have little doubt that Chicago is the most corrupt city in the country, I would dispute the claim in the article that Illinois is the third most corrupt state in the union. Just during my lifetime four Illinois governors have done time in jail. I don’t believe any other state can equal that record. And have they never heard of “Operation Greylord”?

IMO the greatest threat to American democracy isn’t voter fraud or voter suppression or Donald Trump or any of the many other things that are pointed to. I think it’s political corruption. It’s so widespread and pervasive that corrupt politicians no long recognize that what they’re doing is corrupt. It’s just the way things are.

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Wise Words

Today David Brooks’s New York Times column was about wisdom:

When I think of the wise people in my own life, they are like that. It’s not the life-altering words of wisdom that drop from their lips, it’s the way they receive others. Too often the public depictions of wisdom involve remote, elderly sages who you approach with trepidation — and who give the perfect life-altering advice — Yoda, Dumbledore, Solomon. When a group of influential academics sought to define wisdom, they focused on how much knowledge a wise person had accumulated. Wisdom, they wrote, was “an expert knowledge system concerning the fundamental pragmatics of life.”

The most worthwhile passage in the column is a quote from Montaigne:

Wisdom is different from knowledge. Montaigne pointed out you can be knowledgeable with another person’s knowledge, but you can’t be wise with another person’s wisdom.

which explains succinctly why wisdom will become increasingly rare. Google can provide you with facts; it might provide you with knowledge; it can’t provide you with wisdom.

The thoughts in the column were said better and more tersely a millennium ago by the Neo-Platonist philosopher Solomon ibn Gabirol:

The first step in the acquisition of wisdom is silence, the second listening, the third memory, the fourth practice, the fifth teaching others.

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Dr. Doom on Inflation

At Project Syndicate Nouriel Roubini lays out the inflation risks:

The problem today is that we are recovering from a negative aggregate supply shock. As such, overly loose monetary and fiscal policies could indeed lead to inflation or, worse, stagflation (high inflation alongside a recession). After all, the stagflation of the 1970s came after two negative oil-supply shocks following the 1973 Yom Kippur War and the 1979 Iranian Revolution.

In today’s context, we will need to worry about a number of potential negative supply shocks, both as threats to potential growth and as possible factors driving up production costs. These include trade hurdles such as de-globalization and rising protectionism; post-pandemic supply bottlenecks; the deepening Sino-American cold war; and the ensuing balkanization of global supply chains and reshoring of foreign direct investment from low-cost China to higher-cost locations.

Equally worrying is the demographic structure in both advanced and emerging economies. Just when elderly cohorts are boosting consumption by spending down their savings, new restrictions on migration will be putting upward pressure on labor costs.

Moreover, rising income and wealth inequalities mean that the threat of a populist backlash will remain in play. On one hand, this could take the form of fiscal and regulatory policies to support workers and unions – a further source of pressure on labor costs. On the other hand, the concentration of oligopolistic power in the corporate sector also could prove inflationary, because it boosts producers’ pricing power. And, of course, the backlash against Big Tech and capital-intensive, labor-saving technology could reduce innovation more broadly.

What Dr. Roubini does not touch on is that the asset inflation that practically everybody explains by central bank actions is already exacerbating wealth and income inequality and what’s worse that policy produces a positive feedback loop. The more money the Fed stuffs into the pockets of the wealthiest Americans the more those beneficiaries will want it to keep right on doing it.

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