Unemployment is so low and companies continue to complain that they can’t find anyone. The unspoken end of that sentence is they can’t find anyone at the wage they are offering. It’s only a matter of time before companies will be forced to start increasing wages just so they can find people.
Unions protect incumbent workers against new entrants. That's obviously great for you if you're personally an incumbent worker in an industry that's unionizing, but can't move the needle on the economy as a whole. As price rises, quantity demanded drops.
By saying unions are the fix, you're implying that corporations are too powerful (or hold more power against employees). This was explicitly stated in the article.
> One possible reason is that employers are growing increasingly powerful.
You see the same trend in many other developed countries with strong union membership. You're gonna need more than one paragraph and a chart to convince me that unions are the answer to all of our problems.
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I think the most parsimonious explanation is too much supply of labor and not enough demand, so this means employers still have the upper hand. Low unemployment hides the low labor force participation rate. A lot of middle-aged and older men want to work but cannot. Many low and medium skill jobs still have too many applicants relative to open slots.
There is no reason to think that's the simplest explanation.
An equally simple explanation is that for the majority of jobs there is essentially a wage monopoly/cartel keeping wages low, and workers have significant barriers to moving to different areas. [1][2][3][4]
I think this is it. I think there is more slack in the labor market than is shown by traditional unemployment figures and that people that would have traditionally retired are still in the labor force.
Wages are always booming -- if you have the right skills. Generic "wage booms" aren't a thing that exists in a normal economy. There are a number of fields right now where there is an absolute shortage i.e. the number of qualified people at any price point is smaller than the number of jobs.
The point people often overlook is that, by and large, people cannot be easily trained into most kinds of roles that are experiencing strong wage growth. There is no easy way to satisfy a labor shortage that requires several years of training and experience to gain competency. But that is the reality.
Consequently, you have large numbers of $300k jobs that no one can fill and large numbers of people that can't find a job at $50k. These are separate markets.
There are probably a couple of orders of magnitude less $300K jobs than $50K jobs. A "there exists" quantifier is useless when talking about the health of the entire US economy.
Increasing the size of the pie doesn't mean anything unless you also increase the sizes of the slices people get.
Current inequality involves a larger pie, but with an ever smaller number of people getting the majority of the cake, so that others get the same old portions or less (despite working even harder than a company-man or union worker in the 50s and 60s).
Roughly 11-12% of the working age population is veterans (Using google for the rough figures and math)
It is far more fruitful to game the disability system than to pursue an actual productive career.
- Anecdote: 2 personal fitness instructors with 100% disability. That is $3000 non-taxable dollars a month. For life.
-- It is far more fruitful to game a bureaucratic machine than to put your mind and imagination towards fruitful work
~ This is not the same as saying "Throw them out in the street and let God sort 'em out". This is saying that a great and fruitful strategy for future vets is to rape the VA's disability system
: Temporary observations on dynamics that could be gamed to sustainability and ruin by over 10% of the possible working population
~ This is not a mere case of the ruin of commons. This is (at least) partially a manipulation by war planners to grossly underestimate the costs of constant war and constant operations. The costs of the VA are either not calculated in or are grossly distorted/underestimated by planners. It is not an organization for vets. It is an organization to cover the DoD's ass by bribing the living casualties of bureaucratic malfeasance and the normal living casualties in even the most competently executed wars.
So, many possible reasons, and one way or another it's the relative power of employer vs. labor, but one possible factor: the longer the downturn/slowdown, the longer after it ends before wages go up. The recovery from the Great Recession was by far the slowest in living memory, so it takes longer before employers stop thinking "people will take this job soon, I just know it", and instead think "I'd better raise the pay or I'll lose the people I've got". And maybe they think that, because it's true, and you have to have a good labor market for a longer period of time before people start to hop jobs more, if they experienced a longer wait before they got the job they have.
Too much supply (employees) is a problem we should examine. Part of the reason why this is he case is because small business are having an increasingly difficult time competing with the resources of larger companies. Why have 6 accounts each at a small business of their own when a company 6 times the size can get by with 2?
I think part of the blame is the regulation around employees. It’s hard to run a small business. Even trying to do something like offer reasonable health insurance can destroy huge amounts of profit. You need to make a lot per employee for it to work.
This article is many months old. More recent data is showing solid wage growth. Nevertheless, many of the comments on underlying economic challenges for workers are still valid.
How do you negotiate for a pay increase when the pay increase is controlled centrally? Every year my increase is not negotiable because it has been handed down to my boss from central HR 5-6 layers of management away.
This has to be a common issue; and the solution is not to simply change companies.
It's very common. Everyone realizes at some point in their career the simple, obvious truth: companies want to pay as little as they can to retain talent, which is obviously opposed to the employee's interest. They also don't want employees to have a hostile relationship with their manager, so they implement policies that seemingly remove their manager's wishes from the equation. Of course, that isn't true. The second that you walk in the door with a better offer, money will magically become available. Everything is negotiable.
Tell them you have multiple offers elsewhere. I am that boss. Amazingly, HR discovered they have a "retention incentive" avsilable. To help me keep my employee.
You misunderstand the fundamental reason why you are getting a 2% salary increase every year. Because when you joined the company, 5 years ago, you were happy with $XX,000. You were ok with that salary one year ago. What changed? Why would you suddenly want a lot more?
PS: the answer is "because the market has moved and values me at that higher price now", which needs to be backed up with something such as a job offer (dangerous), or better, evidence (my friends with similar resumes are getting offers at that price).
If your boss really wants to give you a raise very often he can if he actually tries. Unfortunately companies have become really good at hiding behind their policies as long as it's convenient.
First and foremost, learn how to negotiate. Read the book, "Never Split the Difference".
Secondly, start looking for another job. Once you have an offer in hand that you'd be willing to accept, you'll be in a better place to negotiate a raise.
> How do you negotiate for a pay increase when the pay increase is controlled centrally?
Unions (organize) [1]. Politics (labor regulations) [2]. If you're on a shorter timeline, and regulatory capture isn't in effect, leave with some of your coworkers and cannibalize some of your employer's business. Last option is to simply suffer in silence. That option sucks, don't take it.
(Note: If you're reading HN, this most likely doesn't apply to you. You're a privileged tech worker not facing the same perils of most of the US workforce. You're not my audience. Engage your fellow citizen and learn some empathy and compassion.)
TL;DR -- A company's compensation strategy is often not optimized for retaining the best employees.
As I understand it, in any organization with formalized job classifications, each job classification has a compensation range attached to it. To keep things simple, let's say that each position has a fixed salary attached to it, and that salary is automatically adjusted upwards to match increases in the cost of living. So if you're a Software Engineer 1 (SE-1), and you want to get a raise, you need to become a Software Engineer 2 or higher (SE-2+).
So how do you go from an SE-1 to SE-2+? Figure that out, and you'll have figured out a path to predictably negotiating a higher salary. If you find yourself in a position where the company will is actively help you advance your career, consider yourself fortunate :) . It's not uncommon to work for an employer who doesn't help much with career advancement, and it's often easier to get a pay bump by moving to another company.
I am going to take a contrary position and say this is a positive. The reason why is employers are responding by bring in more of the marginal into the workforce. If wages start to rise the underclass will remain unemployed and excluded.
This kind of argument is less of a rationalization and more of public relations spin. It ignores the increase in consumer spending that comes with raising wages. In fact, it completely depends on skating over that fact.
The problem seems to be that people are willing to work for low wages. At the last company I worked for, college graduate engineers were paid about $75k starting and they had an incredibly hard time hiring. So they raised the amount that they offered. But in low wage industries people take any job they can get at whatever wage is offered.
I think the idea that everyone has to go to college is a factor in this.
Many of my friends from undergrad ended up graduating with a mountain of debt, but unable to find jobs requiring a college degree.
This forces them to compete for low income jobs (that traditionally don't require a degree), while in the weak bargaining position of being desperate for money just to stay afloat and short on experience.
This article is from February—could a fourth possible reason be that local variance is a normal phenomenon and this is not indicative of a wider trend? I say this because the sudden and drastic dip in median weekly earnings in the last quarter of last year has already recovered 75% in the first two quarters this year according to https://www.bls.gov/news.release/wkyeng.t01.htm
Went from $353 -> $345 -> $351 at end of second quarter this year.
The overall trend is still very much up. That being said, even if wages do continue to increase, the fact that only half of real growth is making it to workers is still problematic and could be related to other reasons mentioned in the article.
If this is the solution, then the rich will never stop getting richer. 10% ROI on a 100k investment has a significantly greater marginal utility than 10% on a 5k investment.
[+] [-] orev|7 years ago|reply
[+] [-] prolikewh0a|7 years ago|reply
Unions are the obvious easy fix [1]. Give the workers some real bargaining power and ability to stand up for themselves.
https://www.epi.org/news/union-membership-declines-inequalit...
[+] [-] closeparen|7 years ago|reply
[+] [-] febeling|7 years ago|reply
[+] [-] JustSomeNobody|7 years ago|reply
> One possible reason is that employers are growing increasingly powerful.
[+] [-] noelsusman|7 years ago|reply
[+] [-] InclinedPlane|7 years ago|reply
[+] [-] robdachshund|7 years ago|reply
[deleted]
[+] [-] briandear|7 years ago|reply
[+] [-] ntnn|7 years ago|reply
[+] [-] paulpauper|7 years ago|reply
[+] [-] jhayward|7 years ago|reply
An equally simple explanation is that for the majority of jobs there is essentially a wage monopoly/cartel keeping wages low, and workers have significant barriers to moving to different areas. [1][2][3][4]
[1] https://www.vox.com/the-big-idea/2018/4/6/17204808/wages-emp...
[2] https://www.thenation.com/article/does-monopoly-power-explai...
[3] https://ilsr.org/monopsony-labor-blp-episode-42/
[4] https://www.epi.org/publication/its-not-just-monopoly-and-mo...
[+] [-] friedman23|7 years ago|reply
[+] [-] jandrewrogers|7 years ago|reply
The point people often overlook is that, by and large, people cannot be easily trained into most kinds of roles that are experiencing strong wage growth. There is no easy way to satisfy a labor shortage that requires several years of training and experience to gain competency. But that is the reality.
Consequently, you have large numbers of $300k jobs that no one can fill and large numbers of people that can't find a job at $50k. These are separate markets.
[+] [-] noobermin|7 years ago|reply
EDIT: thanks for the correction.
[+] [-] coldtea|7 years ago|reply
Current inequality involves a larger pie, but with an ever smaller number of people getting the majority of the cake, so that others get the same old portions or less (despite working even harder than a company-man or union worker in the 50s and 60s).
[+] [-] JulianMorrison|7 years ago|reply
[+] [-] Bytopia|7 years ago|reply
It is far more fruitful to game the disability system than to pursue an actual productive career. - Anecdote: 2 personal fitness instructors with 100% disability. That is $3000 non-taxable dollars a month. For life. -- It is far more fruitful to game a bureaucratic machine than to put your mind and imagination towards fruitful work ~ This is not the same as saying "Throw them out in the street and let God sort 'em out". This is saying that a great and fruitful strategy for future vets is to rape the VA's disability system
: Temporary observations on dynamics that could be gamed to sustainability and ruin by over 10% of the possible working population ~ This is not a mere case of the ruin of commons. This is (at least) partially a manipulation by war planners to grossly underestimate the costs of constant war and constant operations. The costs of the VA are either not calculated in or are grossly distorted/underestimated by planners. It is not an organization for vets. It is an organization to cover the DoD's ass by bribing the living casualties of bureaucratic malfeasance and the normal living casualties in even the most competently executed wars.
[+] [-] neffy|7 years ago|reply
[+] [-] bluedino|7 years ago|reply
[+] [-] rossdavidh|7 years ago|reply
[+] [-] dev_dull|7 years ago|reply
I think part of the blame is the regulation around employees. It’s hard to run a small business. Even trying to do something like offer reasonable health insurance can destroy huge amounts of profit. You need to make a lot per employee for it to work.
[+] [-] zakum1|7 years ago|reply
[+] [-] dijit|7 years ago|reply
How do you negotiate for a pay increase when the pay increase is controlled centrally? Every year my increase is not negotiable because it has been handed down to my boss from central HR 5-6 layers of management away.
This has to be a common issue; and the solution is not to simply change companies.
[+] [-] kmkemp|7 years ago|reply
[+] [-] killjoywashere|7 years ago|reply
[+] [-] alain94040|7 years ago|reply
PS: the answer is "because the market has moved and values me at that higher price now", which needs to be backed up with something such as a job offer (dangerous), or better, evidence (my friends with similar resumes are getting offers at that price).
[+] [-] BurningFrog|7 years ago|reply
Then you either take that offer or get a decent counteroffer from your current place.
It's a lot of work and inconvenience, which is one reason it actually works.
[+] [-] maxxxxx|7 years ago|reply
[+] [-] halbritt|7 years ago|reply
Secondly, start looking for another job. Once you have an offer in hand that you'd be willing to accept, you'll be in a better place to negotiate a raise.
[+] [-] toomuchtodo|7 years ago|reply
Unions (organize) [1]. Politics (labor regulations) [2]. If you're on a shorter timeline, and regulatory capture isn't in effect, leave with some of your coworkers and cannibalize some of your employer's business. Last option is to simply suffer in silence. That option sucks, don't take it.
(Note: If you're reading HN, this most likely doesn't apply to you. You're a privileged tech worker not facing the same perils of most of the US workforce. You're not my audience. Engage your fellow citizen and learn some empathy and compassion.)
[1] https://www.theatlantic.com/business/archive/2016/08/union-i...
[2] https://en.wikipedia.org/wiki/Democratic_socialism
[+] [-] PopeDotNinja|7 years ago|reply
As I understand it, in any organization with formalized job classifications, each job classification has a compensation range attached to it. To keep things simple, let's say that each position has a fixed salary attached to it, and that salary is automatically adjusted upwards to match increases in the cost of living. So if you're a Software Engineer 1 (SE-1), and you want to get a raise, you need to become a Software Engineer 2 or higher (SE-2+).
So how do you go from an SE-1 to SE-2+? Figure that out, and you'll have figured out a path to predictably negotiating a higher salary. If you find yourself in a position where the company will is actively help you advance your career, consider yourself fortunate :) . It's not uncommon to work for an employer who doesn't help much with career advancement, and it's often easier to get a pay bump by moving to another company.
[+] [-] robertk|7 years ago|reply
[+] [-] danieltillett|7 years ago|reply
[+] [-] snackbugs|7 years ago|reply
[+] [-] x0AC77B2|7 years ago|reply
[+] [-] coldtea|7 years ago|reply
What's the alternative? Starving?
[+] [-] celrod|7 years ago|reply
Many of my friends from undergrad ended up graduating with a mountain of debt, but unable to find jobs requiring a college degree. This forces them to compete for low income jobs (that traditionally don't require a degree), while in the weak bargaining position of being desperate for money just to stay afloat and short on experience.
[+] [-] CapacitorSet|7 years ago|reply
[+] [-] matchagaucho|7 years ago|reply
Whereas workers needed wage increases to buy TVs, cars, and homes... today just about everything can be financed.
The long-term impact of this is lower savings and delayed retirement (if retiring at all).
[+] [-] meguest|7 years ago|reply
[+] [-] closeparen|7 years ago|reply
[+] [-] laser|7 years ago|reply
Went from $353 -> $345 -> $351 at end of second quarter this year.
The overall trend is still very much up. That being said, even if wages do continue to increase, the fact that only half of real growth is making it to workers is still problematic and could be related to other reasons mentioned in the article.
[+] [-] jhayward|7 years ago|reply
[1] https://econographics.files.wordpress.com/2013/03/corporate-...
[+] [-] unixhero|7 years ago|reply
[+] [-] kylestlb|7 years ago|reply
[+] [-] patrickthebold|7 years ago|reply
[+] [-] kart23|7 years ago|reply
[+] [-] xentronium|7 years ago|reply
2. Wages != Compensation
[+] [-] imleft|7 years ago|reply
[deleted]