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Unemployment in the U.S. Is Falling, So Why Isn’t Pay Rising?

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Re: Unemployment in the U.S. Is Falling, So Why Isn’t Pay Rising?

#141

Post by losteric »

marcosdumay wrote: post #139
losteric wrote: post #131

Earlier quoted context omitted.

Maybe my terminology is off, correct me if so, but when businesses fold because bigger competitors are buying all the resources needed to stay competitive, that sounds like a shortage to me. On the labor side, getting a $120k+ job out of a 4 year/$14k investment also sounds like a labor shortage.

No, that means some business wasn't competitive. When machines were created, many clothing companies folded because cotton become more expensive. It was expensive because machines could make clothes cheaper, so people brought more. Is that a shortage? At any time there's trash on some street that could be picked-up by hand. That's a job in direct competition with yours, yet there's nobody there hand-cleaning the stre…

I'm not sure how your second example works, but the first definitely reflects a cotton shortage.

This discussion and the original article is focused on analyzing why wages are falling with unemployment. "Businesses are failing because they are uncompetitive" describes most businesses. The question is: Why are the failing? How does that impact down-stream systems? What up-stream systems could have had an impact? Follow the chain of cause -> effect.

Ineffective labor cross training into high-skill high-demand jobs -> labor shortages -> only large scale operations can afford to bid -> dramatic efficiency gains -> lower asking price of products -> businesses that couldn't bid collapse due to uncompetitiveness in the new market -> surplus less-skilled labor and economic disparity -> less taxes for infrastructure -> less regional competitiveness -> ... so forth, hypothetically.

Which is why I concluded with investing in education (root cause resolution) and competitive regional infrastructure (new growth, avoid another labor glut from overcorrection).

Re: Unemployment in the U.S. Is Falling, So Why Isn’t Pay Rising?

#142

Post by tarboreus »

losteric wrote: post #141
marcosdumay wrote: post #139

Earlier quoted context omitted.

No, that means some business wasn't competitive. When machines were created, many clothing companies folded because cotton become more expensive. It was expensive because machines could make clothes cheaper, so people brought more. Is that a shortage? At any time there's trash on some street that could be picked-up by hand. That's a job in direct competition with yours, yet there's nobody there hand-cleaning the stre…

I'm not sure how your second example works, but the first definitely reflects a cotton shortage. This discussion and the original article is focused on analyzing why wages are falling with unemployment. "Businesses are failing because they are uncompetitive" describes most businesses. The question is: Why are the failing? How does that impact down-stream systems? What up-stream systems could have had an impact? Follo…

Sorry, but you're not using a correct technical definition of shortage, and also (I would argue) not a useful colloquial definition. If cotton is in high demand and therefore the price rises, that does not represent a shortage of cotton. In neoclassical economics, in a free market where price is fully representative of supply and demand, there is no such thing as a shortage. If there is more demand, the price goes up, if there's less demand, the price goes down. As the price goes up, fewer people are willing to buy, and so you eventually get an equilibrium.

On the other hand, if an external (non free market) force sets the price, then you will have a shortage. Say, for example, that a bushel of wheat in the Roman Empire would go for 10 dinars in a free market. If Octavian passes a law that says that wheat must cost 8 dinars, the result will be a shortage. Now you have way more people willing to pay for the 8 dinar wheat than would be willing to pay for the 10 dinar wheat, and that discrepancy (the difference in available goods) is the shortage.

Price setting (like rent control in NYC) is a common cause of shortage, but there are lots of other causes. Often companies won't jack up prices because gouging has negative externalities (people start to hate you), and this unwillingness technically creates a shortage. In a shortage, you'll see behaviors emerge like queuing (like in the Soviet Union for sneakers) and also the emergence of a black market where goods are sold at the higher price (often with an additional premium attached).

Re: Unemployment in the U.S. Is Falling, So Why Isn’t Pay Rising?

#143

Post by losteric »

scarface74 wrote: post #99
usmeteora wrote: post #75

Earlier quoted context omitted.

I get what youre saying logicially and in general I don't disagree with you, but I want to pose a new way of thinking about this that may be unique to times previous and see what people think, because its a forming idea in my head, and I'm not sure its somethign I've settled on yet in general With software engineering specifically, given the amount of people who have access to the internet, lets say like unemployed y…

I've personally experienced working with a junior dev who changed careers into development, had a desire to learn but just couldn't grasp the logical concept of development. I've also seen self taught developers - mostly "database developers" - who had the aptitude to break problems down logically and get something working but their code was unmaintanable except by them (barely), didn't scale, and required manual int…

> No one would ever say that why don't people learn how to sing or play sports because those can be high paying careers, because most people understand that not everyone has the natural talent to do so.

Almost anyone can learn how to play sports, or sing, or play instruments. It just takes time and determination. The ones that "make it big" also have luck on their side, but there are plenty of unknown people with equal skill.

Sure, legitimately dumb people will have trouble with knowledge work... but average intelligence is more than enough. The problem is that software is still a relatively new field and we haven't learned how to teach it yet.

I think we're still too focused on implementation details. Language is the medium for expressing ideas, incoherent or poorly developed ideas indicate someone that hasn't learned how to think about the domain yet. When mentoring students or doing code review for new hires, I've found tremendous value in focusing on questions and pointers to software/framework patterns instead of line-level errors. The little stuff matters, but those problems are often driven by higher level complexity.

Re: Unemployment in the U.S. Is Falling, So Why Isn’t Pay Rising?

#144

Post by marvin »

eli_gottlieb wrote: post #112
usmeteora wrote: post #79

Earlier quoted context omitted.

Electrical Engineer true. Software Dev though? I just googledo nline 30 seconds ago and theres free courses titled "Free online course to learn Tensorflow" "same for Elastic Search" "intro to VR" "Intro to Python" "App dev" etc...these are all free and accessible to the same people who work at coffee shops and browse twitter and facebook..... So would it take 10 years for these people to learn the skills? I think the…

A second anecdata point. I got laid-off from a job in embedded firmware in January. I just started a new gig this week as a web developer. Prior to that, almost every single position I interviewed for turned me down. I asked for feedback. They invariably said, "Not enough experience with our area." When this was web-dev, where I have little to no experience, this was understandable -- it was also 90% of the available…

I'd guess the classical problem of leadership with no technological skills. They're unable to see how embedded firmware skills transfer between specialties. Either that or the "not enough experience" was a lie and there was something else, but I've seen enough of the "management has no technical skills" to believe that was the reason.

Re: Unemployment in the U.S. Is Falling, So Why Isn’t Pay Rising?

#145

Post by marvin »

usmeteora wrote: post #103
haskellandchill wrote: post #92

Earlier quoted context omitted.

Hm, I'm a software engineer with nearly 10 years of experience but to get a job not in web development I estimate it would take at least 6 months of nights and weekends on a skill area such as machine learning, data science, distributed systems, data engineering, etc to be qualified in the eyes of employers. It's quite difficult to demonstrate qualifications to employers, I specialize in type theory and devote my nig…

I'm not arguing with you on any of these points. I'm not saying its fair. I'm saying I think the biggest tech companies now never had the intention of opressing poor people and we have as a society found ourselves, as we always seem to do in quite a complex situation where its not easy to find one person or company we can point the finger to and say "its all your fault" In regards to you conflation that not screwing…

Fascinating read, thanks. Nice to see you perspective after deliberately, and probably at significant cost, choosing a different lifestyle than everyone around you.

(The whole concept of growing up in the ghetto and having a harder time to achieve what society finds valuable is less familiar from my perspective, living in Scandinavia where welfare makes this less pronounced).

Re: Unemployment in the U.S. Is Falling, So Why Isn’t Pay Rising?

#146

Post by 18RDThNx »

abritinthebay wrote: post #16
18RDThNx wrote: post #2

Does this factor in total compensation? Labor has been getting more expensive over time due to mandates and regulations. Additional benefits must be paid regardless of the employee's wishes, and some would probably prefer extra cash to that additional mandated perk.

Of course, what people prefer in the short term and what is actually good for society as a whole are sometimes different things.

Perhaps. But who is better equipped to decide: the individual or "society?"

Re: Unemployment in the U.S. Is Falling, So Why Isn’t Pay Rising?

#147

Post by eli_gottlieb »

marvin wrote: post #144
eli_gottlieb wrote: post #112

Earlier quoted context omitted.

A second anecdata point. I got laid-off from a job in embedded firmware in January. I just started a new gig this week as a web developer. Prior to that, almost every single position I interviewed for turned me down. I asked for feedback. They invariably said, "Not enough experience with our area." When this was web-dev, where I have little to no experience, this was understandable -- it was also 90% of the available…

I'd guess the classical problem of leadership with no technological skills. They're unable to see how embedded firmware skills transfer between specialties. Either that or the "not enough experience" was a lie and there was something else, but I've seen enough of the "management has no technical skills" to believe that was the reason.

I mean, I am inexperienced for my age due to taking time for an advanced degree. This ought to be balanced by applying for junior to intermediate positions, though.

I received similar feedback from recruiters, saying that once you've been in industry a couple of years, employers view you as specialized to exactly what you've done before. Apparently it got hard to even sell my resume for non-embedded roles.

Re: Unemployment in the U.S. Is Falling, So Why Isn’t Pay Rising?

#149

Post by losteric »

tarboreus wrote: post #142
losteric wrote: post #141

Earlier quoted context omitted.

I'm not sure how your second example works, but the first definitely reflects a cotton shortage. This discussion and the original article is focused on analyzing why wages are falling with unemployment. "Businesses are failing because they are uncompetitive" describes most businesses. The question is: Why are the failing? How does that impact down-stream systems? What up-stream systems could have had an impact? Follo…

Sorry, but you're not using a correct technical definition of shortage, and also (I would argue) not a useful colloquial definition. If cotton is in high demand and therefore the price rises, that does not represent a shortage of cotton. In neoclassical economics, in a free market where price is fully representative of supply and demand, there is no such thing as a shortage. If there is more demand, the price goes up…

You are saying shortages do not exist in a perfect market. I agree with that, no persuasion required.

However, I am saying that shortages exist because our market is imperfect. Given the axioms of a perfect market, ours is absurdly inefficient:

* Homogeneous supply of products: No. there are huge disparities in skill and personalities. Evaluating quality is very challenging.

* Perfect Information: No(ish). glassdoor/blind are improving transparency but pricing / performance information is still suppressed.

* Low barriers of entry: No. People cannot enter this market without large personal investments (which many lack).

* Minimal externalities: No, all of my posts here were focused on externalities... especially ones that raise the barrier of entry.

* Zero transaction costs: No, it's expensive to change jobs and businesses expend lots of money searching for quality candidates.

* Rational profit-motivated sellers: No, candidates do not seek to maximize profit. Less profitable offers are accepted based on location, ethics, social status, peer network, business domain, tools, or even just not caring to negotiate.

* Rational buyers: ehhh ... employers have rational intent, but do make unprofitable decisions due to low and inconsistent quality (less of a concern for those that pay the highest rates).

As I described earlier, these imperfections harm related systems and markets. My suggested path back to an ideal market was public education and infrastructure investments.

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