Is there a labor shortage in the U.S.? Employers are shouting "yes." Economists keep looking for wage increases as evidence of a labor shortage, and since wage increases are still relatively modest, the argument that there are severe labor shortages in parts of the U.S. is unpersuasive to many conventional economists.
But if we look at "we're hiring" signs and billboards, it's clear employers are having trouble filling available positions. Longtime correspondent Harvey D. recently submitted this list of billboards advertising job openings in South Carolina:
"Here's a sample of billboards in upstate South Carolina, a heavily industrialized area along I-85:
Michelin - $16.50 & up to start, depending on experience.
BMW - $18.50 & up (not to mention that they're going to build the 23,000 Amazon delivery vans there.)
MAU (staffing firm) - $18.50 & up for forklift operators; they have 3,000+ students in industrial skill training courses in GA/SC/NC/AL
DHL (staffing) - need forklift & general machinists, $20 & benefits
Greenville Tech (vo-tech school) - recruiting students for master welding classes, you can make $80K w/ 5 yrs experience.
Even Chick-Fil-A is offering $13 w/ bennies for full/part-time if you can pass a drug test and are 18+…
every trucking firm & almost every business has a banner in their front yard saying "WE'RE HIRING".
There are numerous theories about the causes of labor shortages and the lack of wage pressure. One reality Harvey described in his email is the difficulty small businesses have in raising wages as 1) the cost of benefits such as healthcare insurance skyrocket, pushing total compensation costs higher even if the wages employees see remain the same and 2) the difficulty in passing on higher labor costs.
Few small businesses are monopolies; if prices move up, customers go elsewhere or put off the purchase. Even corporations' ability to raise prices without losing sales is limited, hence the popularity of reducing quantity (the ever-shrinking serving size) or quality (appliances with inferior components that fail in a few years, etc.)
Let's look at the labor participation rates for the populace at large, women and men. The labor participation rate reflects the percentage of the population that's in the workforce, either working or actively looking for work.
That the number of people in the workforce has declined significantly is well-known. The US Census pegs the number of people 'not in the labor force' at 95 million.This includes people who are disabled, in school, etc., so the number should be taken with a grain of salt. But the decline in the relative size of the labor force is stunning: archive.fo
