Grasping for Reality about Labor Market Conditions
Hat tip Mark Thoma for Brad Delong’s catch of the ‘can’t hire workers’ complaint without checking for real reasons or facts:
Quote: Grasping for Reality about Labor Market Conditions
Fresno is not a microcosm of the US. Brad DeLong explains why “it has never been wise to generalize from the state of Fresno’s labor market to the country as a whole.” Dean Baker also comments.
Baker, like most economists, is clueless about how business actually works.
He thinks business owners are sitting on big vaults of cash and spend most of their days thinking about screwing workers. Duh.
More likely business owners come in all stripes and group into distinctively different categories. The bigger corporations don’t all make their labor decisions in the same manner. And different classes of employees are treated dfferentially. In general it seems safe to say that business will pay the lowest price they can for labor, skilled or not. Baker’s point is well considered. What business owner is going to continue to seek $15/hr employees when none materialize? If the position is important then the owner will pay what the lowest priced skilled labor will require. On the other hand some business owners will recognize the value of their employees and the need for stability of their work force and pay more than the least acceptable wage in an effort to find the best employees. STR, if a business hasn’t the funds to pay the necessary least salary what the devil are they doing in business? And why is it that those salary constraints never seem to apply to the executive corps?
Or, perhaps, robotics are installed to avoid shortage disruptions and fluctuations in need for labor. ie. welders in one medium size and international oriented were laid off….two years later were needed again, and there was advertizing with no takers.
Now if it was buff these experienced welders would be in Texas and not tempted at all. Others may have other jobs in similar pay range and choose not to return to a possibly short term hiring from maybe a more secure current position. Etc.
If a company does not want to train new welders to particular specs, and expects to hire people already experienced without much effort, ah well.
But be careful of laying the blame on workers for the result. And ignoring pricing questions when writing articles. I believe many articles blame the workers without exploring the owners criterion and efforts, which might be one point rusty could push for to educate us.
Well, guys, as it happens I spent much of my SSA career working in Ag areas on the Central Coast of California with frequent trips to the Valley. DeLong and Thoma know something about Fresno. The writer of the WaPo article doesn’t seem to. Unemployment is always high in Fresno County because the biggest industry in Fresno besides Agriculture is Agriculture. This is seasonal work peaking in the Spring and summer. So, a labor contractor hires a crew to prune or pick X acres of grapes for a week at a time and moves on as subsequent crops come in elsewhere up and down the Central and Imperial Valleys. Just about everyone in Ag is unemployed part of the year every year. That’s just the way it is.
Also, Fresno has a lot of poor people, retired people, and minority people. About 50% of the population is Hispanic. About 40% of all demographic groups are either 65 or older or 18 or younger. This is not the kind area where work is easy to come by and never has been. So, it would certainly be better to pick a more prosperous area with less dependence on Ag if you want to make an argument for structural unemployment. Try LA, guy from WaPo. Hah. Talk about a mischegoss!