Opinion: Have businesses really run out of people to hire?

Market Watch ^ | June 17, 2016 | Caroline Baum

[expat_panama]

Throughout the seven-year old U.S. expansion, as the unemployment rate tumbled from a peak of 10% in 2009 to a low of 4.7% last month, policy makers have been focused on the slack in the labor market. Yes, slack....

...surprise to read this week that the problem facing companies is a shortage of workers, both highly skilled and entry-level.

Why not offer them a higher wage?...

...the Roaring ‘90s? That’s what a tight labor market looks like: signing bonuses; offers of free cars, even for mid-level managers; and a sufficiently attractive wage to entice some criminals...

...plenty of business owners who will tell you that they can’t find workers...

...Janet Yellen on Wednesday cast doubt on a significant interest-rate increase in the near future...

...monthly JOLTS report (Job Openings and Labor Turnover Survey) revealed a record number of job openings...

...Can’t businesses tempt labor-force dropouts with a higher real wage? There is no sign of it....

...a wishy-washy attempt to fill the reported number of job openings.

Many economists have been waiting for that beast known as “wage inflation” to boost prices...

...Businesses do not bid up the price of labor (wages) only to find their profits squeezed...

...A more compelling argument to explain the large number of reported job openings going unfilled is that demand isn’t strong enough to support economy-wide price increases...

...6.4 million Americans working part-time for economic reasons...

...wake of the truly awful May employment report, did Yellen concede...

...pointed to the low level of unemployment claims, high level of job openings and modest wage increases as signs “of a healthy labor market.”

Maybe. Until I see signs that businesses are satisfying their stated demand for labor by luring labor-market dropouts with a higher real wage, I remain unconvinced.

[Bryanw92]

>>Businesses can’t find enough qualified workers to whom they can pay unqualified wages; that is the problem.

Exactly. They want an experienced expert, who they will pay like an entry-level employee and then expect them to work at any random task assigned like an intern.

And if they are a white male, then promotion is out of the question. Gotta get those diversity stats up, you understand.

[expat_panama]

A very merry Friday morning to everyone!  Stocks bumped up a fraction of a % yesterday --tho in weaker trade-- and the IBD distribution day count winds down to just four w/ both S&P and NASDAQ.   Precious metals took a hit however, and gold/silver fell to $1,285.15/$17.41 w/ futures to -0.81%.  Stock futures are mixed.    Fortunately the only econ stats coming out today are Building Permits and Housing Starts at opening bell.

Soo many neat news stories, so little time...

SEC Needs to Slow Down High-Frequency Traders - Editorial, USA Today
1% Freak Out As Wall Street Hot Spot May Shut Down - Linette Lopez, BI
Big Finance Is Slowly Warming Up to Trump - Alexandra Stevenson, NYT
Donald Trump Represents Crucial Economic Change - Larry Kudlow, NR
Why You'll See Clinton's Wall Street Speeches Soon - Al Hunt, Bloomberg
Untangling New Dot Mystery at Federal Reserve - Luke Kawa, Bloomberg
Memo to Fed: Keep Your Foot Off of Brake - Editorial, Investor's Business
The Fed Is Forced to Reckon With the Impossible - Jeffrey Snider, RCM
Achieving a "Cashless Society," All Based on Gold - Nathan Lewis, Forbes
Two Ominous Govt Trends Threaten Our Wellbeing - Steve Forbes, Forbes
Tax Policy & Social Engineering Make Black Markets - Bob McManus, CJ

[Alberta's Child]

No offense, but any time I hear someone complain about the consistently poor quality of the businesses they work for, and claim that they have only had two competent supervisors in forty years, I draw the following conclusion:

1. You're a malcontent who wouldn't be happy in any job.

2. You ought to be in business for yourself so you can show all of us how to run a business effectively.

[Caipirabob]

Well stated.

[Alberta's Child]

That's simply not true.

My company is perfectly willing to pay very high salaries to fill these positions.

The problem is that it raises the cost of doing business, and in the case of the "Group A" employees I described, these people are being let go because several of our biggest clients are canceling projects due to high costs.

Maybe you can tell all of us here on FreeRepublic how many employees you have hired at "market wages."

For that matter, why don't you tell us how many people you've hired for ANY wages at all.

[central_va]

Most small business enterprises fail. That is a fact.

I went independent contractor 15 years ago so I am my own boss and he is very competent I might add.

Multi billionaire heads of tech corps cry out for cheap labor from the back of their 100 foot yachts. That shows both vulgar greed and incompetence.

[SoothingDave]

Yes, good point. And there is no shortcut to getting experience.

[SoothingDave]

Unfilled jobs at the present wages should encourage young people to get training.

But we’ve failed to prepare people to begin on such a path.

[central_va]

The problem is that it raises the cost of doing business, and in the case of the "Group A"

Ok then the product you produce is under priced or does not really fill the need of your costumer. It has nothing to do with wages. Does McDonalds throw in the towel and go out of business when ground beef prices go up 50%?

A technology company sells applied human intelligence. If technology labor goes up in price then that should cause inflation. Either that or go out of business and let you competitor have all the market share. Somehow labor is always treated differently. I smell incompetence.....

[Moonman62]

Big Business like Big Government wants slaves who will tolerate horrible management. They may be running out of slaves. I don’t know.

[central_va]

But we’ve failed to prepare people to begin on such a path.

Who is we? Let market forces do the changing of human behavior. There is nothing to do. It will fix itself.

[tiki]

We have a young man my son hired, he’s practically worthless. He’s stupid AND lazy. We have an 80 year old who works circles around him.

[central_va]

Maybe you can tell all of us here on FreeRepublic how many employees you have hired at "market wages."

I ran a data center for a mid sized corporation for 5 years. I stared it from scratch. I hired and paid well and I made it clear that I expected results. If they underperformed they were terminated. At the wages I paid there was no shortage of candidates. Good candidates. I hired an H-1B form Pakistan once . It was disaster. Corporate made me do it and didn't want to.

You have to be willing to fire a person that is something most do not want to do.

[Alberta's Child]

OK -- I see.

You're in the tech sector, where several factors in any line of business are magnified exponentially. These would include rapid change, rapid obsolescence of both hardware and job skills, and transferability of knowledge across borders.

It's damn near impossible to hire anyone on a long-term basis in that type of industry.

[central_va]

We have a young man my son hired, he’s practically worthless.

I am sure he is compensated accordingly.

[central_va]

I make a decent living off of corporate incompetence.

[Alberta's Child]

If the product we produce is "under priced" then we wouldn't have a problem with clients canceling deals.

Bad example. McDonald's sits squarely at the bottom of the food chain (pun intended), so they will always be the beneficiary of a trickle-down effect in the restaurant business (customers from mid-grade restaurants switch to cheap diners when costs go up, patrons of cheap diners switch to fast-food restaurants, etc.). McDonald's may not go out of business when ground beef prices go up 50%, but the country is littered with high-end restaurants that went out of business when their customers vanished after their steaks got more expensive.

If technology labor goes up in price then that should cause inflation. Either that or go out of business and let you competitor have all the market share.

The employer doesn't really drive wages. Customers do. If a customer is only willing to pay $X for an iPhone, then Apple doesn't have the flexibility to build wage inflation into the production process without making cuts somewhere else.

[jurroppi1]

Most of the tech jobs listed for electronics are either assembler jobs listed as electronics tech / engineering tech jobs, shift supervisor positions, or are listed incorrectly (like Uber driving listed under the job title “Engineering Technician”). I’ve been looking, I think most companies put out listings to see what they will get back - most will receive thousands of resumes where a hiring manager spends no more than 7-10 seconds before throwing them in the trash.

Employers are looking for the perfect employee - highly qualified, cheap, compliant and nearly mute.

[Jonty30]

Lots of people say they want to work, but cant find employment.

[GailA]

Eldest manages a Papa John’s, his biggest problem is those who apply are drug addicts, or have arrest records, no GED, and suspended DL’s. He took a failing store to a record setting store with better hiring guidelines, waiting on drug test and making sure his people WORKED. Works his butt off 12-14 hrs a day. Now he is in negations to be a regional manager. He had to start off as a driver, until they fired the incompetent manager. It’s tough to find a job after 40 today. Plus he is a Type 2 Diabetic to add to job stress and health care packages.