Posted by: stiltsville | November 26, 2012

Myth of American Talent Shortage

Unlike certain political leaders, I can still remember high school economics. The Labor Market is a market just like the stock market or the grocery store, they taught me. If you want something, you better be prepared to pay market rates.

If I want to buy a share of Apple stock, I put in my offer and wait for someone to accept. If I put in an offer of $10 for one share of Apple, I will be waiting a long, long time. If I honestly want to complete the transaction, I need to put in an offer at a realistic price.

Now, if I want to hire someone, I make a price offer to the labor market; “I will pay 100 dollars for someone with YY qualifications.” If nobody in the market accepts my offer, maybe that’s because they are all currently employed at 120 dollars. So, I need to up my offer to 125 dollars and then see how many takers I get.

We don’t have a skilled labor shortage in this country. The jobs went to China, the skilled American workers are still here, but they don’t want to work for peanuts and get further and further into debt.

When you hire someone, you are not just paying them to “do a job.”

  • Do you want them to show up on time? Then you need to pay enough for them to save so they can replace the tires and battery on the car. These things wear out.
  • Do you want them to be clean? Well, you need to pay enough so the workers can keep their water turned on. Or they’re going to smell bad.
  • Do you want them to show up every day? Well, they need to earn enough to have the ability to pay for health insurance.
  • You want highly skilled? Let’s talk about paying back student loans…

We don’t have a skilled labor shortage in this country. We have a shortage of “job creators” who are willing to step up and pay market price for what they want. (except this guy.) It takes two to tango, even in the labor market.

Related:

Skills Gap in U.S. Manufacturing Is Less Pervasive Than Many Believe

Skills Don’t Pay the Bills

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