The Global Sociology Blog

Via Naked Capitalism, the Wall Street Journal is shocked, SHOCKED, that the unemployed are not lining up to grab a few low-paid jobs that employers are good enough to throw their way. And, of course, they blame the extension of unemployment benefits. If these lazy bums were left with nothing, they would be grateful for the crumbs they get.

Of course, that is not the case, as the great Yves Smith explain:

“Go back and look at the list of why some jobs go begging. The Journal lists three reasons, but there are really only two: employees are not willing to take whatever is on offer (either due to still having unemployment benefits or believing they can find higher-paid work) or due to inability to move where jobs are. Note these problems all have to do with workers, there is no consideration as to whether employers are contributing to this dynamic. For instance, note how the story suggests that workers will need to trade down. Yet many employers turn down job-seekers because they are overqualified.

Yet one can think of reasons why, and the article itself provides some supporting evidence. A core issue is that the employer-employee relationship has broken down. Quaint as it may sound, there once was a tacit commitment: a worker who competent and dedicated could expect to spend a considerable amount of his career at with one firm (in the 1980s, job tenures of less than five years needed to be justified). But as cost cutting and short term earnings fixation became more pervasive, average time of employment shortened greatly. And with that came a major shift in behavior: it made less and less sense for employers to hire talented people with good general competence and character and train them. They’d be unlikely to recoup the cost of the investment. Instead, companies started more and more to seek staff, in that horrid corporate cliche, who could hit the ground running. For instance, headhunters would increasingly be tasked to find someone who was doing exactly the same job at a competitor firm. This tendency goes all the way down the food chain; for instance, I’m told it’s impossible to become a bartender in NYC unless you have at least two years of bartending experience.

Now what does this mean from a price standpoint? If you believe in the most basic construct in economics, the supply and demand curve, if you restrict supply (by requiring that workers have very particular skills), the result is a higher price. Yet some employers seem to think because the economy is in the crapper, they should be able to hire cheaply. But 16.5% unemployment nationally does not necessarily mean 16.5% unemployment in their geographic and skill niche.”

It is funny how, for over 20 years, we have heard the “flexibility”argument over and over: workers should be flexible, go where the jobs are, adapt to the job supply and provide what the market needs in whatever shape or form. How about turning that argument around and apply to employers?

Also, doesn’t classical economic theory state that wages should rise if there is a shortage of labor? Maybe these employers should offer what the market will bear, which is higher than what they currently offer.