" If you're offering a wage for months on end, and you can't fill the role, you aren't paying enough. Full stop."

I do think that's a big part. At local meetup groups, companies come pitch their job openings, and almost always say "we're having a hard time finding folks - and we're paying market rates!" I will sometimes counter with "if you're offering a rate and no one is taking you up on it, by definition, that's not the market rate". It might be in someone else's market, but not yours. The "market rate" for ipads was $499 for a long time, but that didn't mean HP could get $499 for their tablets.

If you're an employer in Canada, you just get together with your buddies, call up your local government official and "convince" him to launch a program where hundreds of thousands of minimum wage "Temporary" Foreign Workers (TFW's) are imported to fill the gap.

And if you're a jealous high employer of skilled personnel, you just do the same, and legislation has just recently been passed so skilled workers can now be imported just like TFW's.

Now, there will never be full employment across most of the job spectrum so salaries will never have to rise. Add in a top 3 in the world unaffordable housing market, and this is how you eliminate a middle class.

I did find it odd we have an entire article on wages and no mention of immigration. People, particularly on the low end, are not going to get raises if you import new workers faster than the economy can absorb them.

Well it is a fantastically controversial one so it's probably deliberately left out.

On a similar topic it irks me that in one breath people will talk of the power of future automation and in another support large scale migration.

Automation reduces demand for labour and its price falls.

In Canada the narrative is that increased population is "needed" to support social services, but inconvenient facts like certain classes of immigrants, who happen to be one of the largest demographics, pay no taxes when they arrive is not considered relevant to the discussion.

Managing future budgets is claimed to be the motivation for the immigration increase, but does not stand up to scrutiny, and the government is not open to questions on the subject as it would constitute hate speech.

Its the same in Australia

Helicopter families? Wife and kids get citizenship for free school/medical/dental/welfare and tax free capital gains on the house, husband doesn't get citizenship so doesn't have to pay Aus tax or even declare overseas income, and just wires $ for groceries and Mercedes?

Do you also have huge neighborhoods of million dollar houses and hundreds of thousands of dollars of cars in the driveway, but there's no tax base because everyone's income is below the poverty level?

>Do you also have huge neighborhoods of million dollar houses and hundreds of thousands of dollars of cars in the driveway, but there's no tax base because everyone's income is below the poverty level?

Wait, how does that work? I'm obviously doing something wrong...

It's the same issue as in the car market. The advertized numbers are wishful thinking. The final price on the deal is almost always better. But you don't see those numbers advertized, because those open positions/cars will be spotted quickly and thus the offer will be filled quickly. "Market rate" is a concept that only works when their is open outcry, meaning that offers and agreed deals are visible to other market participants.

The flip side of market rate is what employers can afford to pay while staying solvent. We are in the midst of a huge technology disruption affecting all aspects of retail and manufacturing.

What happens to the mom and pop coffee shop or the grocery store that charges more than Amazon Fresh?

Enployment has a bid and offer, both sides are reluctant to cross without desperation.

>What happens to the mom and pop coffee shop or the grocery store that charges more than Amazon Fresh?

Nothing. Amazon Fresh doesn't exist in most places.

>What happens to the mom and pop coffee shop or the grocery store that charges more than Amazon Fresh?

Coffee shops aren't known for being places to get cheap groceries; they're places where you get fancy drinks and/or snacks and hang out and talk to your friends or use the WiFi. In other words, coffee shops are selling an experience, not a fungible good.

If a coffee shop goes out of business because of an online seller, they must have been offering a really lousy experience.

>I will sometimes counter with "if you're offering a rate and no one is taking you up on it, by definition, that's not the market rate"

And what do they say to that? Blank stares? Acting like you're crazy? When I say stuff like that on boards like this, I usually have people arguing with me that no, there really is a "shortage" of workers.

> Well, there may be unemployed people, but they're not willing to do those jobs at those rates.

Yep. That is essentially the crux of it and also why there's a big trade off between unemployment vs a small basic income. With unemployment you collect while having free time and then lose that income stream as soon as you take the job, making the decision to take a job significantly less obvious. With a small (survival level) basic income, having a job means you make more money...period.

It's an aspect of the equation that nobody wants to talk about. In low cost of living areas you almost have an incentive to collect unemployment for stretches because of it.

Taking a low paying job can hurt future earnings, but generally I agree with you. I was once reviving enough unemployment that many full time jobs would have been a payout, at the same time unemployment was not even enough money to pay rent. However, taking a job to slow the bleeding would have been more appealing.

Ya, I agree that there is some stubbornness among employers to raise wages and that more jobs than typical are remaining unfilled as they hope to find someone at their $12 price point rather than just ponying up $14 (or whatever). Probably this is due to the unusually large recession we had. The fact is that employers could get away without raising wages for a really long time. No big surprise if it takes them a while to catch on that the end of that line is neigh.

But ya, mostly slack. Another 2 years or so. Maybe a bit more. The 2020 census could put the nail in the coffin. A shit ton of people get hired for those things.

> they hope to find someone at their $12 price point rather than just ponying up $14 (or whatever)

One of the issues is that it isn't just ponying up an extra $2/hr.

If a company already has, say, 10 employees at the $12/hr price point, they won't be too thrilled about a peer coming in at $14/hr. Most likely, in the short to medium term, they will have to be bumped to $14/hr, too.

So rather than being an extra $2/hr, it's actually an extra $2/hr + (10 * $2/hr) = $22/hr.

> $12 price point rather than just ponying up $14

that's interesting, but has anyone asked the question of whether the business can actually remain profitable if the rate was $14 rather than $12?

If the business can't earn a profit at the market rate for the labour required to run the business, then maybe they shouldn't be in business any more?

I mean lots businesses become viable if you only have to pay $1/hr.

In some cases maybe that's the trigger point where it makes it worthwhile to buy the products overseas (free shipping!) and deal with the uncertainty of when you'll receive it.

The current system sometimes seems designed to fail.

There's a lot of options other than simply offshoring.

Consider externalizing costs, almost no one has a servant pump gasoline for them, I would imagine you have to be very old for "self service gas station" vs "full service gas station" to mean anything to most Americans.

Another option is political corruption, I'll donate $ to your re-election campaign if you create a property tax free zone for my business.

Full service gas pumps are still mandatory in some states in the US.

The point is still valid in the states that aren't New Jersey or Oregon. In Nebraska, Washington, California, Iowa, Ohio and Kansas, all the places I have lived in or worked in my memory I have seen no gas station attendants.

This is largely because the cost and labor of operating the pump has been externalized by pushing onto the car operator.

Retail business do this with cash registers. How many of these jobs will simply disappear? What else can be fully automated?

The counter-point to this is that if people remain unemployed due to unwillingness to accept available jobs at the available pay...at what point do they have to re-examine their own market value?

If a significant portion of the population has a market value lower than the cost for them to have a reasonable quality of life isn't that some kind of fundamental failure condition for society/humanity?

Or is it a function of supply and demand simply changing the rate because we've been perfectly comfortable sending millions of jobs overseas?

As soon as the supply of people needing jobs is low enough that businesses have to pay more to hire...they will do so barring alternative options.

If you have to raise your wages it generally means your competitor also has to raise theirs, so yes, businesses can usually remain profitable.

And if your competition is foreign you're usually even better off -- wages in China have been rising a lot faster than wages in the States.

Corporate profits are up a bit as a % of revenue. Similar labor's share of national income is down a bit. A lot of businesses could afford to pay a bit more.

Just a bit though. There hasn't been some sort of sea change like a lot of people seem to think.

That could easily happen due to consolidation and averaging over sectors. In some sectors with high barriers to entry giants earn a lot, in other sectors, it's trench warfare with competition and <1% profit margins.

If not, then you don't have a business that's viable for the current market.

Or you need to invest in robot cashiers to replace the unemployed people who don't want the wage you're offering.

If that were possible, and in the business plan, you would have a viable business.

It's underway. And maybe it's a good plan, but you don't want to take that step, so you go out of business and your competitors fill in your place. (Consolidation is good for business, not so good for workers.)

> If you're offering a wage for months on end, and you can't fill the role, you aren't paying enough. Full stop.

Right. But don't forget that it's possible for a wage to simulatenously too low and too high.

It can be too low to higher anyone, but too high to be profitable to the employer. And in that case, the job is defunct.

I wonder if the discussion of wages captures everything. Particularly for those we expect to "draw back in" to the labor force. Will a few more dollars an hour change things, or is there something about the nature of the positions that makes them unappealing to people out of the labor force?

Also, companies do have a ceiling on how much they can pay without raising prices, and to the extent you want to pay people fairly, you would have to raise wages for all your employees.