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Why 3.5M Americans in their prime years aren’t working

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Re: Why 3.5M Americans in their prime years aren’t working

#31

Post by ComputerGuru »

brightball wrote: post #24
ekidd wrote: post #8

I'm deeply skeptical of any explanation that claims that we have both a "shortage of labor" and "downward pressure on wages": > If men and women from the ages 25 to 54 took part in the labor market... [t]hat would be more fuel for the U.S. economy and a bigger source of workers for businesses crying out about a shortage of labor... > Trade with China flooded the U.S. with cheap imports, forced domestic firms to shift…

Think professions where reimbursement is controlled by an outside entity like insurance or Medicaid. Even with supply and demand you can’t pay more than those will make possible. Additionally, in many cases you’ll end up with people working and providing services before finding out that they won’t be paid for it. That’s just off the cuff though.

That only applies to companies accepting only (or virtually only) government health insurance, of which there are either few or none. In reality, it’s part of the reason treatment is so expensive. They charge private entities a lot more to make up for the government mandated rates. The law is that you can’t charge the government more than anyone else.

And this is after we swore we would never let another Rwanda or another Serbia happen.

Actually, this raises a very interesting point to parallel the author’s. By the same logic, a pacifist society must be willing to go to war to protect that pacifism.

Re: Why 3.5M Americans in their prime years aren’t working

#32

Post by thaumaturgy »

ekidd wrote: post #8

I'm deeply skeptical of any explanation that claims that we have both a "shortage of labor" and "downward pressure on wages": > If men and women from the ages 25 to 54 took part in the labor market... [t]hat would be more fuel for the U.S. economy and a bigger source of workers for businesses crying out about a shortage of labor... > Trade with China flooded the U.S. with cheap imports, forced domestic firms to shift…

There was a much better article posted to HN not long ago that did a deeper dive into what's going on: https://slatestarcodex.com/2018/02/19/technological-unemploy...

The overall conclusion was that automation (and, we can assume, globalization) was essentially digging away at "middle-skilled" jobs, like manufacturing. These are jobs where employees must invest a certain amount of time and training to be paid well, and then they find that their entire industry is drying up. They are faced with a few choices, and many of those lead towards a less attractive, lower-paying job than they had before.

With a social safety net, many are simply exiting the job market and relying on disability or other means to get by rather than take a crap job at crap wages.

Although the age group here is different, a lot of the same forces are likely at play. US employers do not see labor as an investment, and haven't for a long time (if ever); they are generally unwilling to hire lower-skilled employees and invest in training them. Instead, they cry constantly that there isn't a large enough pool of skilled labor to draw from (and in the tech sector, this is why they think they need lots of H-1Bs).

Meanwhile, potential employees are faced with a market where, if they work very hard and teach themselves some skill at their own cost, they might be able to get a job working for an employer who will pay them as little as they can get away with paying them (the wage pressure), and potentially also having to pay off student loans. Alternatively, they can forego this rat race and get some middle-skill job -- something between food service and senior software developer -- and make enough to get by, and with less debt, and spend whatever extra money they've got left over on cheap entertainment.

They certainly aren't going to be able to afford a house on their wages, that hasn't been possible since the 60s.

This is a complex issue with manifold causes and effects and, as the article I linked points out, nobody seems to have a solid handle on all of it yet. There's lots of ideology but not clear enough data yet.

Re: Why 3.5M Americans in their prime years aren’t working

#33

Post by craftyguy »

galieos_ghost wrote: post #29
craftyguy wrote: post #22

Earlier quoted context omitted.

So basically, "China is doing it, so why can't we"? They also heavily repress their citizens and are notorious for human rights violations.

Yes? Why does the US have to fight in the global economy with one armed tied behind our back? And how are trade policy and China's human rights abuses in any way related?

My point is that just because one country is doing it doesn't mean that it's the right thing to do.

Isolationism, and the concept of 'us vs. them' at a global level needs to die. Humans are a global species, and the longer it takes us to realize that the worse off we will be at trying to solve global problems, like economics.

Re: Why 3.5M Americans in their prime years aren’t working

#34

Post by jlmorton »

galieos_ghost wrote: post #17
endorphone wrote: post #10

Earlier quoted context omitted.

Comments such as yours -- parroting Donald Trump like talking points -- are remarkable when you consider that the US has the second highest purchase power in the world . The US really has no incentive to allow this to happen Except that it has opened trade for US companies, and the reported numbers are often laughably misleading. Apple, for instance, nets almost all of the profits from an iPhone, yet in the trade bal…

Good for apple, good for the Chinese people working those jobs, bad for American citizens who would have been working those jobs. What is so wrong about using our leverage as the world's largest economy to protect the interests of our citizen's, just like China does?

What is so wrong with California using its leverage as America's largest state economy to protect the interests of its residents, just like China does?

It's just a thought experiment. I understand the US constitution vests the power to regulate interstate commerce with the Federal government.

Let me put it another way. If it would be advantageous for the US to erect trade barriers against Chinese exports, why would it not be advantageous for California to erect trade barriers against Mississippi, where average wages are dramatically lower, there are far fewer environmental regulations, etc.

Re: Why 3.5M Americans in their prime years aren’t working

#35

Post by Retric »

jordanb wrote: post #14
ekidd wrote: post #8

I'm deeply skeptical of any explanation that claims that we have both a "shortage of labor" and "downward pressure on wages": > If men and women from the ages 25 to 54 took part in the labor market... [t]hat would be more fuel for the U.S. economy and a bigger source of workers for businesses crying out about a shortage of labor... > Trade with China flooded the U.S. with cheap imports, forced domestic firms to shift…

One way to look at it is there is a ceiling on American wages imposed by globalization. Above that ceiling you're better off going overseas. But that ceiling is below the market-clearing price of labor in the us.

That does not work.

If you can substitute foreign labor then there is no shortage. If you can't substitute foreign labor then it's irrelevant.

You can't have a shortage of workers and falling wages. You can have uncompetitive US companies, but they are very profitable so the only thing left is irrational behavior.

Re: Why 3.5M Americans in their prime years aren’t working

#36

Post by icelancer »

kmonsen wrote: post #12
ekidd wrote: post #8

I'm deeply skeptical of any explanation that claims that we have both a "shortage of labor" and "downward pressure on wages": > If men and women from the ages 25 to 54 took part in the labor market... [t]hat would be more fuel for the U.S. economy and a bigger source of workers for businesses crying out about a shortage of labor... > Trade with China flooded the U.S. with cheap imports, forced domestic firms to shift…

We see this all the time in tech, cannot find people is usually cannot find people with the skills and experience we want for the price we are willing to pay. This will always be true if you offer less than the current market rate which startups seems to think they are entitled to.

>> current market rate

Many of the new positions being created in startups have no defined market rate, which causes more malinvestment (overpaying workers who don't produce well enough) or shortage of labor due to insufficient perceived compensation.

Businesses will almost always err on the side of shortage of labor and keeping costs down when they can (though you could argue otherwise in the current ridiculous VC-backed industry), so this will always be a "problem" in the market.

Re: Why 3.5M Americans in their prime years aren’t working

#37

Post by anarazel »

galieos_ghost wrote: post #11
baxtr wrote: post #7

Earlier quoted context omitted.

What’s your hypothesis that this is not happening elsewhere then? Let’s say in Germany. Free trade there as well...

Germany has been called out many times for boosting trade by manipulating the Euro. They also have stronger unions which plays a roll. They also don't have millions of illegal immigrants with no federal labor protection driving wages down internally. https://www.politico.com/agenda/story/2017/05/26/trump-right...

> They also don't have millions of illegal immigrants with no federal labor protection driving wages down internally.

Oh, bs. There's plenty plenty access to cheap labor (intra EU migration, external immigration, asylees with work permits). The minimum wage is low enough to not matter much in most cases.

Re: Why 3.5M Americans in their prime years aren’t working

#38

Post by LMYahooTFY »

jacquesm wrote: post #9
galieos_ghost wrote: post #6

Not sure why people are shocked by this, it's just the basic principle of diffusion. As long as america continue to allow free trade our wealth and jobs will flow out of the country as countries seek cheaper labor and sell it right back to America with no restrictions. The standard of living is raising in other countries while lowering in the US. Labor is already getting too expensive in China for cheap goods so comp…

> As long as america continue to allow free trade our wealth and jobs will flow out of the country as countries seek cheaper labor and sell it right back to America with no restrictions. What an incredible nonsense. America has been pushing free trade all over the globe to be able to sell American products into other markets. They're not 'allowing' free trade, they have been pushing it for all it's worth and then som…

How is it nonsense that an American manufacturer fails to compete with a foreign manufacturer?

This is fundamental economics, and why tariffs exist.

Re: Why 3.5M Americans in their prime years aren’t working

#39

Post by [deleted] »

galieos_ghost wrote: post #21
jlmorton wrote: post #16

Earlier quoted context omitted.

> As long as america continue to allow free trade our wealth and jobs will flow out of the country as countries seek cheaper labor and sell it right back to America with no restrictions. Settings aside the fact that the US currently enjoys very low unemployment, with a steady rate of job creation that is now the longest jobs expansion in recorded US history, why do you believe other countries are willing to manufactu…

Workforce participation remains low, wages are stagnant, buying power accounting for inflation is much lower than it was in decades past, all while corporate profits are at record highs. The promise that outsourcing didn't matter because goods would be cheaper was a lie, Corporations are instead enjoying record profits on the difference in labor costs. You can keep spouting the same talking points that economists and…

[deleted]

Re: Why 3.5M Americans in their prime years aren’t working

#40

Post by ddebernardy »

jacquesm wrote: post #9
galieos_ghost wrote: post #6

Not sure why people are shocked by this, it's just the basic principle of diffusion. As long as america continue to allow free trade our wealth and jobs will flow out of the country as countries seek cheaper labor and sell it right back to America with no restrictions. The standard of living is raising in other countries while lowering in the US. Labor is already getting too expensive in China for cheap goods so comp…

> As long as america continue to allow free trade our wealth and jobs will flow out of the country as countries seek cheaper labor and sell it right back to America with no restrictions. What an incredible nonsense. America has been pushing free trade all over the globe to be able to sell American products into other markets. They're not 'allowing' free trade, they have been pushing it for all it's worth and then som…

In what world? I'm too young to remember earlier times, but in the past 25 years the US has only ever been pushing for borderline if not outright protectionist pro-US policies.

Exhibit A: copyright law. Exhibit B: patent law. Exhibit C: privacy/data protection law.

Anywhere they have an edge, the US aggressively arm-wrestles third parties into submitting themselves to trade deals that makes them keep subservient to whatever, and present their accomplishments to voters as "free trade" deals. It's not.

It's a bit like "peace process". It's code word for whatever American interests align to. Try to find any reference of the US being against a peace process. You won't.

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