"Others say it’s a 'skills mismatch.' Personally I think both explanations are right. People whose best option is an $11 or $12/hour semi-skilled job, or a job that pays in tips, are going to hold out for the $15/hr job. That leaves businesses dependent on stable labor with massive shortages, or the unattractive option of paying more for the same unskilled labor pool."
"But even with higher pay, workers are quitting, because they know the government will pay them while they hunt for a better job."
What will be interesting to keep an eye on is to what extent this strategy (stay home and have the gov't pay for you to look for a job) ends up paying off for folks. All things being equal from a taxpayer perspective, we would rather have more $15/hour workers than $12/hour workers, so if workers can use the current situation to "level up" before the benefits expire, that may be a good thing overall. It's true that it'll hurt the lower-wage businesses, but there's been an open question for some time now to what extent some of those businesses are financially viable on their own, or whether their business model works because they can off-load things to the social safety that are part of other employers' compensation packages (insurance and other benefits, which you can get working at Amazon, but not likely as a line cook at Dennys).
If we find that "leveling up" on the government's dime (more precisely - your dime and mine) is working out for workers, we'll be left with a choice of either paying higher prices to entice "leveled-up" workers back into formerly-low wage industries OR we may have to revisit our immigration policies to bring in more workers looking to put their foot on the bottom rung on the ladder of American achievement. It should be an interesting transition period to watch, *especially* when the tax bill comes due for those benefits.
Bringing in more immigrants to work will eventually lead to a lot of leftovers - former workers. That may be your point. Insisting that able people work should be a national policy and be coupled with other national policies that create jobs. Adjust as necessary, probably frequently.
Scarcity will determine the outcome. There are only so many of the “better” jobs available and for every person who keeps one, there’s more who don’t. If all jobs end up paying more to attract labor, then all jobs suffer scarcity and there are more people unemployed. Which is what I think will happen in 2022.
I'm not quite sure I follow the logic on the idea that there's an upper limit on the "better" jobs (which I'm equating to Amazon warehouse workers with a higher than minimum wage and some benefits). I would have though that were true a couple of years ago, but then Amazon surprised me the other day when I heard that it was the second-largest employer in the US (1.3 million jobs vs. Walmart's 2.2 million jobs).
I bring this up because Amazon appears to have figured out how to provide reasonable employment with benefits at scale, where Walmart has not. It seems that in the competition for workers, Walmart (and other employers) will have to find a way to compete for the employable workers (shows up reliably, gets the job done, etc.) lest Amazon filter out the better workers on the lower end of the job scale, leaving Walmart and others with the "leftovers" who increase the cost of the business due to less value that they bring as employees.
Now, you may say that Amazon isn't capable of employing the entirety of America's lower class, and that's likely true. However, as we've seen repeatedly over the past two decades, Amazon doesn't appear to have hit that limit yet, despite effectively assimilating much of America's traditional retail economy. (They're also effective at extracting more value from workers using digital surveillance and a pretty Taylorist[1] corporate culture.)
When you take companies like Amazon, and the emergence of new forms of food service, such as ghost kitchens[2] and gig-workers, it's possible that places like Dennys cease to be as viable as they were pre-pandemic, given COVID-induced changes in consumer behavior and expectations, coupled with factory-kitchens turning out similar quality meals using many fewer workers (making more money at the ghost kitchens than the traditional restaurants).
I don't know if this supports or refutes your point. (There's also a question of to what extent Amazon and ghost kitchens can scale in smaller communities.) All I know is that if I were someone in that part of the economy, I'd be doing the rational thing and using the pandemic as an opportunity to re-skill and get out of what are likely dying industries.
"Others say it’s a 'skills mismatch.' Personally I think both explanations are right. People whose best option is an $11 or $12/hour semi-skilled job, or a job that pays in tips, are going to hold out for the $15/hr job. That leaves businesses dependent on stable labor with massive shortages, or the unattractive option of paying more for the same unskilled labor pool."
"But even with higher pay, workers are quitting, because they know the government will pay them while they hunt for a better job."
What will be interesting to keep an eye on is to what extent this strategy (stay home and have the gov't pay for you to look for a job) ends up paying off for folks. All things being equal from a taxpayer perspective, we would rather have more $15/hour workers than $12/hour workers, so if workers can use the current situation to "level up" before the benefits expire, that may be a good thing overall. It's true that it'll hurt the lower-wage businesses, but there's been an open question for some time now to what extent some of those businesses are financially viable on their own, or whether their business model works because they can off-load things to the social safety that are part of other employers' compensation packages (insurance and other benefits, which you can get working at Amazon, but not likely as a line cook at Dennys).
If we find that "leveling up" on the government's dime (more precisely - your dime and mine) is working out for workers, we'll be left with a choice of either paying higher prices to entice "leveled-up" workers back into formerly-low wage industries OR we may have to revisit our immigration policies to bring in more workers looking to put their foot on the bottom rung on the ladder of American achievement. It should be an interesting transition period to watch, *especially* when the tax bill comes due for those benefits.
Bringing in more immigrants to work will eventually lead to a lot of leftovers - former workers. That may be your point. Insisting that able people work should be a national policy and be coupled with other national policies that create jobs. Adjust as necessary, probably frequently.
Scarcity will determine the outcome. There are only so many of the “better” jobs available and for every person who keeps one, there’s more who don’t. If all jobs end up paying more to attract labor, then all jobs suffer scarcity and there are more people unemployed. Which is what I think will happen in 2022.
I'm not quite sure I follow the logic on the idea that there's an upper limit on the "better" jobs (which I'm equating to Amazon warehouse workers with a higher than minimum wage and some benefits). I would have though that were true a couple of years ago, but then Amazon surprised me the other day when I heard that it was the second-largest employer in the US (1.3 million jobs vs. Walmart's 2.2 million jobs).
I bring this up because Amazon appears to have figured out how to provide reasonable employment with benefits at scale, where Walmart has not. It seems that in the competition for workers, Walmart (and other employers) will have to find a way to compete for the employable workers (shows up reliably, gets the job done, etc.) lest Amazon filter out the better workers on the lower end of the job scale, leaving Walmart and others with the "leftovers" who increase the cost of the business due to less value that they bring as employees.
Now, you may say that Amazon isn't capable of employing the entirety of America's lower class, and that's likely true. However, as we've seen repeatedly over the past two decades, Amazon doesn't appear to have hit that limit yet, despite effectively assimilating much of America's traditional retail economy. (They're also effective at extracting more value from workers using digital surveillance and a pretty Taylorist[1] corporate culture.)
When you take companies like Amazon, and the emergence of new forms of food service, such as ghost kitchens[2] and gig-workers, it's possible that places like Dennys cease to be as viable as they were pre-pandemic, given COVID-induced changes in consumer behavior and expectations, coupled with factory-kitchens turning out similar quality meals using many fewer workers (making more money at the ghost kitchens than the traditional restaurants).
I don't know if this supports or refutes your point. (There's also a question of to what extent Amazon and ghost kitchens can scale in smaller communities.) All I know is that if I were someone in that part of the economy, I'd be doing the rational thing and using the pandemic as an opportunity to re-skill and get out of what are likely dying industries.
[1] https://en.wikipedia.org/wiki/Scientific_management
[2] https://www.eater.com/21540765/ghost-kitchens-virtual-restaurants-covid-19-industry-impact
"... can off-load things to the social safety that..." should be "...can off-load things to the social safety NET that..."