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After All the Talk About a Skills Shortage in the U.S. Job Market, the Real Problem May Be an Employer Shortage

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public rent-capture7 points · 7 months ago

If there were a skills shortage, employers would be investing heavily in training their employees.

Instead, what we see is employers increasingly looking for the perfect employee, someone who already has all the skills and is ready to dive in and be productive on day one. They are becoming less willing to train their workers, not more. Which is exactly what we would expect if there were an actual surplus of labor.

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This is one reason we should all be concerned about the increasing frequency of buyouts and mergers. Fewer employers with the same number of jobs as always, will result in lower wages. (it should be assumed after a merger total number of jobs decreases though)

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This is the best tl;dr I could make, original reduced by 88%. (I'm a bot)

As President Obama's Council of Economic Advisers explained in its brief on monopsony back in 2016, "Economic theory shows that firms with monopsony power have an incentive to employ fewer workers at a lower wage than they would in a competitive labor market. What the monopsonistic firm loses in reduced output and revenue, it more than makes up in reduced costs by paying lower wages."

The real problem isn't a skills shortage, it's that you aren't offering market wages, because the market isn't functioning.

The next time you hear about a skills shortage, the real problem may actually be an employer shortage.

Extended Summary | FAQ | Feedback | Top keywords: work#1 wage#2 employ#3 market#4 pay#5

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2 points · 7 months ago

The employer "shortage" is undesirable if our goal is to make everyone compete with each other and bid up labor prices. That's nice, but what if we live in a time where consolidation causes firms to become more efficient and deliver more consumer value, even with limited competition? I'd rather live in that world, with basic income to deal with low competition for labor. I don't like the idea of pursuing competition for its own sake, even if it is the lesser evil in a dysfunctional society.

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A basic income guarantee is a system that regularly provides each citizen with a sum of money. Except for citizenship, a basic income is entirely unconditional. A basic income guarantee would radically simplify the welfare state, and truly ensure that no one has to live in poverty. Its necessity will become increasingly obvious as more human labor is replaced by machines.

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