Underoos Again

 

This Underoo Picture Has Nothing To Do With Anything

I just included the picture above because it seems to have gotten an inordinate amount of attention for some reason when I put it up on the Underoo post a month or two ago. Can't imagine why but as you all know I'm a slave to popular opinion so I've posted it again, the better to bait passing readers.

Anyhow, it seems I owe the Underoos of the world (Under-educated, Under-qualified, Under-skilled, Under-experienced, Under-motivated, Under-pretty-much-everything) an apology -- I unfairly blamed/credited them for the lack of people who are signing up for shit jobs at shit wages, resulting in system-wide labor shortages. Actually, "blamed" is certainly the wrong word -- more like "congratulated on finally figuring out how market capitalism works". 

Anyhow, it turns out that there are at least two major factors at work, one of which I included in my Underoo post (click here for that one) and the other that I completely ignored/underestimated/blew:

Part I: This is the part I got right...

As I pointed out, this is a capitalist system, which I'm TOTALLY good with, and no I don't give a rat's spare kidney how some piss-ant little Euro country with about 400 people manages to divvy up their bazillion-dollar North Sea oil income in a fair and humane manner and still manage to cover health care while they're at it. 

The fact is that employers are failing to provide the wages/benefits that are demanded by people who have the thing that they want (i.e., labor), and so are having to do without. Boo hoo, so sad. Here's the newsflash, dumbass: Pay what the market demands or do without and die on the vine. 

I'm really unclear how that's anyone else's problem, nor why bitching about it on MSNBC is going to make any headway. 

It's a perfectly straightforward supply/demand curve and, without putting too fine a point on it, the supply of labor is not meeting the demand for labor. The simple definition the word "price" is the intersection between how much someone is willing to pay for a thing AND for how much the supplier of that thing is willing to sell it. 

Note that by that definition, failure to pay the asking price is NOT a shortage. As Aaron Sojourner, a labor economist and professor at the University of Minnesota's Carlson School of Management puts it:

"I can want a 65-inch TV for $50, but it doesn't mean there's a TV shortage, it means I'm not willing to pay enough to get somebody to sell me a TV."

No intersection, no commerce. It's simple as breathing. 

But the employers (or at least some of them) have forgotten the fact that they don't actually run the system (regardless of the wild-eyed bullshit from the snot-slinging AOC-bots and their merry little band of Marxists). They deal with it, or they die, just like the other side of the equation -- the labor.

But here's where I ran off the track -- I said that the Underoos in the economy had better leverage because of the fact that the Government had essentially been funding their wage strike by paying pandemic rates on their Government benefits. This, I believed, was one of the major drivers. (Shrug). More power to 'em, was my vote. Outbid other interests (including the Government) or lose was my message to the employers. 

Now all that's true, but it turns out there's an even MORE important piece in play, which I totally missed.

Part II: The part I missed...

I don't know if I've mentioned it, but I'm retiring (again) soon. And I ain't coming back this time, either. Now how I might have not realized for even a second that I am not unique is rather a mystery. But here are the facts of the matter:

Americans really are quitting their jobs in big-time numbers — more than 4 million each month since July — but it turns out a whole lot of that quitting is happening among young people who are leaving for other jobs or better pay. In short, they're not dropping out of the workforce. They aren't leaving at all -- they're moving up. 

Now, maybe one of your anecdotal sad-sack story-time examples of generational po' fo'k continues to be dead in the water -- he's ALWAYS there, or more like him. But, statistically, MOST of them are stepping up the ladder, even if they're fashionably whining about their tough times.

This is exactly and entirely the result of the supply/demand curve that I projected in my original post and my lesson in market capitalism above.

But the question is why is there suddenly a general move up? How's this for a hint:

In November 2021, nearly 4 million more Americans left the labor force AND said they didn't want a job than there were in November 2019 but...

(Wait for it)... 

Americans age 55 and up accounted for 90% of that increase.

In fact, of the 5 million people who permanently left the labor force during the pandemic nearly 70% are older than 55, according to Goldman Sachs, and the VAST majority of them aren't looking to return.

 

The labor shortage, in other words, isn't at the pimply burger-flipper level -- it's at the top of the labor stack, and its vacuum is drawing the rest of the labor pool up behind it in near-record numbers. This PERMANENTLY reduces the number of workers at the bottom of the stack, which increases their value. See "Supply and Demand" above or in any Econ 101 class.

 

You think it's a coincidence that a low-skill workplace like Hobby Lobby is suddenly advertising their NATIONWIDE increased minimum start-wage of $18.50 per hour, guaranteed closing times not later than 9:00 PM, and guaranteed Sundays and family time off? Is it a coincidence that while a $15.00 minimum wage law is a screaming death match politically, MOST employers are offering it (or more) anyhow?

 

In short, the labor pool (which is the TRUE means of production, in Marxist terminology) is now the 65-inch TV that employers still want to buy for $50.00, but no one is selling. 

 

Voila. "Shortage."

So, where does that leave us?

Speaking as a senior member of the "Boomer" generation, which is probably the demographically largest segment in the country, my advice to y'all is make hay while the sun shines. Me and mine are leaving, and someone needs to do the work -- which means someone else is going to be willing to pay for it to be done. 

 

But it isn't going to last forever. Those of us born between 1946 and 1964 aren't called "Boomers" for nothing -- we're part of the enormous post World War II baby boom, which means there are a helluva lot of us, which is going to make for a HUGE labor vacuum over about the next 5 years. 

 

If you catch the employment wave, good on ya'. That's how it works. But if the wave collapses (which it will as certain as sunrise within the next decade or so as the economy adjusts to us old farts shuffling off into some obscure history) and you're still "waiting for your chance" when it happens -- well, you're already the next batch of near-useless Underoos, and will likely be subsisting on whatever the version of "nearly nothing" will be in those days.