Market Failure!

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Mo
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Re: Market Failure!

Post by Mo » 08 Jul 2017, 16:00

Employers are just as dumb as Berniecrats about "fair wages"
She is depending on guest-worker visas to fill openings for the season, which runs from the spring through November. “It’s hard work in Nebraska,” Ms. Smith said. “We have hot summers, and you’re on a black asphalt roof.”

At $17 an hour, she said, “the pay is fair.”

“We get a lot of people saying the visa program is taking jobs away from Americans,” Ms. Smith said, “but in reality, they’re not taking the jobs because there is no one even willing to do the jobs.”
Oh, the pay is "fair," but you can't get anyone to apply and do the work? Hmm, maybe that says something about how fair your pay is.
Nearby distribution centers for big companies like Amazon are sucking up most of the available labor, Mr. Thompson said. “I sometimes wish there was actually a higher unemployment rate,” he said.
Or how about you go fuck yourself and then pay people more.
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Highway
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Re: Market Failure!

Post by Highway » 08 Jul 2017, 16:21

Hmm, 15 dollars an hour to fill up boxes at the Amazon warehouse on a regular schedule, or 17 dollars an hour to work on a roof in the middle of summer, when the company can line up jobs. Can you get enough hours at that 2 dollar per hour extra to pay for the downtime of having no work for a week, or for when you have to take 3 weeks off from that fall?

ETA: I hadn't read the article, and thought the second quote was from the roofer. But no, it's from a dry cleaner who's paying 9.25 an hour. Who complains that nobody shows up for his interviews. Maybe cause you're hiring the basement, dude.
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Fin Fang Foom
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Re: Market Failure!

Post by Fin Fang Foom » 10 Jul 2017, 16:49

Corporate sales are greased with what is basically authorized embezzlement and conflict of interest. I hope CalPERs or somebody figures out a way to kill that shit someday.

Also, how much does your life suck that you would be willing to go to go to these events as the target.
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Re: Market Failure!

Post by Jennifer » 13 Jul 2017, 16:53

Mo wrote:
08 Jul 2017, 16:00
Employers are just as dumb as Berniecrats about "fair wages"
She is depending on guest-worker visas to fill openings for the season, which runs from the spring through November. “It’s hard work in Nebraska,” Ms. Smith said. “We have hot summers, and you’re on a black asphalt roof.”

At $17 an hour, she said, “the pay is fair.”

“We get a lot of people saying the visa program is taking jobs away from Americans,” Ms. Smith said, “but in reality, they’re not taking the jobs because there is no one even willing to do the jobs.”
Oh, the pay is "fair," but you can't get anyone to apply and do the work? Hmm, maybe that says something about how fair your pay is.
Nearby distribution centers for big companies like Amazon are sucking up most of the available labor, Mr. Thompson said. “I sometimes wish there was actually a higher unemployment rate,” he said.
Or how about you go fuck yourself and then pay people more.
Looks like some businesses would sooner go under than consider paying people enough to actually work for them:

Horizon Air cancelled hundreds of flights because it had no pilots to fly them:

http://www.slate.com/blogs/moneybox/201 ... rtage.html

Georgia farmers are leaving their crops to rot due to a lack of super-low-wage foreign workers; upping their wages enough to attract locals apparently never occurred to them:

http://www.myajc.com/news/state--region ... 1RO3mSh6L/

Homebuilders in Colorado can't fill orders due to lack of workers. One such man brushes against the problem, but attributes it to greedy workers rather than normal economics:

http://www.cnbc.com/2017/03/29/homebuil ... -want.html
Myers says he tries to build relationships with subcontractors. He has one-on-one meetings to build brand loyalty, but he admits, it often comes down to cold, hard cash. Some builders will spray paint a piece of plywood offering higher wages and drive it by a competitor's site.

"The crews, we would hope, would be loyal to subcontractors and to builders, but in reality, many of the crews are just going to the highest bidder," he said.
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Fin Fang Foom
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Re: Market Failure!

Post by Fin Fang Foom » 13 Jul 2017, 19:40

Well when ther is a supply shock to labor, I understand why they wouldn't be able to pay more to hire people.

For the others, it may the case that it is a better business decision not to do whatever unless they can get labor at that price.
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Eric the .5b
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Re: Market Failure!

Post by Eric the .5b » 13 Jul 2017, 20:03

Fin Fang Foom wrote:
13 Jul 2017, 19:40
For the others, it may the case that it is a better business decision not to do whatever unless they can get labor at that price.
Exactly. They're probably not blowing off an entire crop out of pride, not any more than any business shrugs and walks away from that much revenue and sunk costs.
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Re: Market Failure!

Post by Jennifer » 13 Jul 2017, 20:16

The Georgia berry farmer quoted in that one article said he estimates he's lost $750K worth of crop already. Though I don't think "pride" or "stubbornness" explains why he never thought to raise his offered wage a bit; I agree with the theory I've read elsewhere that businesses are so used to employees being desperate enough to work for low wages, they "lost the muscle memory of how to compete for workers."

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Re: Market Failure!

Post by Eric the .5b » 13 Jul 2017, 20:26

I'm deeply skeptical. And by that, I mean I simply don't believe and won't believe that argument without much more proof than some guy on Twitter's pithy hot take. I've heard the "Oh, raising this one cost won't make it unprofitable, because <vigorous handwaving>" argument too many times when it was completely and utterly wrong.
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Highway
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Re: Market Failure!

Post by Highway » 13 Jul 2017, 20:36

In all of these articles about wages not rising (and duh, how stupid the business owners are) there is never a mention of the fact that prices for those goods that you need to raise wages for will rise as well. And that's an iffy thing. Sure, there are some items that could not feel too much of a pinch from raising their price, but it's not just a function of "Well, put them out there, and they make enough profit on items that they can pay whatever wages they want." Labor just can't rise without prices rising, and the same people who won't take a job for 15 dollars an hour are the ones who won't pay more than 6 dollars for a cheeseburger (and they'll complain about that 6 dollars with "I remember when these were 3 dollars!").
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JasonL
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Re: Market Failure!

Post by JasonL » 13 Jul 2017, 21:00

It's weird to argue that firms are overall self destructively disinterested in profit. Yes things can be strange in individual cases.

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Re: Market Failure!

Post by lunchstealer » 13 Jul 2017, 21:02

JasonL wrote:
13 Jul 2017, 21:00
It's weird to argue that firms are overall self destructively disinterested in profit. Yes things can be strange in individual cases.
I do think that firms can be self-destructively incredulous of changes in what's necessary to make a profit, and that this can be widespread. There are a number of practices which have been shown to be destructive that are, for whatever reason, still popular among shitty managers. I see no reason to see wage inflexibility as exempt from that kind of institutional inertia.
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Re: Market Failure!

Post by JasonL » 13 Jul 2017, 21:05

It is the mirror image of the loss aversion sticky downward wages argument for labor I guess. It's a loss and they aren't neutral about it.

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Mo
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Re: Market Failure!

Post by Mo » 13 Jul 2017, 21:08

Highway wrote:In all of these articles about wages not rising (and duh, how stupid the business owners are) there is never a mention of the fact that prices for those goods that you need to raise wages for will rise as well. And that's an iffy thing. Sure, there are some items that could not feel too much of a pinch from raising their price, but it's not just a function of "Well, put them out there, and they make enough profit on items that they can pay whatever wages they want." Labor just can't rise without prices rising, and the same people who won't take a job for 15 dollars an hour are the ones who won't pay more than 6 dollars for a cheeseburger (and they'll complain about that 6 dollars with "I remember when these were 3 dollars!").
I can see that in a commodity business, like agriculture, where there's no pricing power among participants. But in something like an airline or the roofer in the story that I linked to earlier? Clearly there is unmet demand for their service and raising wages will increase prices and hit some of that demand down, but it won't crater it to zero. That is why, traditionally, low unemployment led to higher inflation. We're still in a sub-2% inflation world right now, so clearly firms aren't doing what they traditionally did in low unemployment markets. Instead, they're praying for job losses.
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Re: Market Failure!

Post by Mo » 13 Jul 2017, 21:13

JasonL wrote:It's weird to argue that firms are overall self destructively disinterested in profit. Yes things can be strange in individual cases.
Also, it's clearly not all firms. Look at how much it costs to hire a developer now compared to in 2008. But it's clear that some firms are unwilling to adjust wages accordingly. This is the employer version of, "Why will no one pay me $20/hour to stock shelves?" The answer is because stocking shelves is not worth that much to us. Same goes for, "Why will no one work on a black tar roof in the summer for $15/hr?" Because that job sucks and I can get a less shitty one for $13/hr.

This is, "There's no $100 bill on the ground," type logic.
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Re: Market Failure!

Post by nicole » 13 Jul 2017, 21:28

Highway wrote:
13 Jul 2017, 20:36
In all of these articles about wages not rising (and duh, how stupid the business owners are) there is never a mention of the fact that prices for those goods that you need to raise wages for will rise as well. And that's an iffy thing. Sure, there are some items that could not feel too much of a pinch from raising their price, but it's not just a function of "Well, put them out there, and they make enough profit on items that they can pay whatever wages they want." Labor just can't rise without prices rising, and the same people who won't take a job for 15 dollars an hour are the ones who won't pay more than 6 dollars for a cheeseburger (and they'll complain about that 6 dollars with "I remember when these were 3 dollars!").
The Denver homebuilding story does talk about record-high sale prices.
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Re: Market Failure!

Post by lunchstealer » 13 Jul 2017, 22:27

Oh christ, if they're in Denver building houses they can fucking print money. Every white-but-not-white-nationalist Texan is biding his or her time until they can move to Colorado. I blame myself, but the fact is that there is a massive housing shortage here and yeah, they can charge what it takes to pay actual-market not in-their-head-market wages for roofers. Not to mention the fact that about 5% of roofs in the Denver area get destroyed every year in hail events (above and beyond end-of-lifespan roofing needs), so if you can't get business roofing new houses you can be fixing existing roofs.
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Re: Market Failure!

Post by Eric the .5b » 13 Jul 2017, 23:26

Mo wrote:
13 Jul 2017, 21:13
JasonL wrote:It's weird to argue that firms are overall self destructively disinterested in profit. Yes things can be strange in individual cases.
Also, it's clearly not all firms. Look at how much it costs to hire a developer now compared to in 2008. But it's clear that some firms are unwilling to adjust wages accordingly. This is the employer version of, "Why will no one pay me $20/hour to stock shelves?" The answer is because stocking shelves is not worth that much to us. Same goes for, "Why will no one work on a black tar roof in the summer for $15/hr?" Because that job sucks and I can get a less shitty one for $13/hr.

This is, "There's no $100 bill on the ground," type logic.
When we're saying farmers are just forgetting how to offer more money to workers, I think it's "the ground is covered with $100 bills that nobody bothers to pick up" logic.
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Re: Market Failure!

Post by Jennifer » 13 Jul 2017, 23:41

Eric the .5b wrote:
13 Jul 2017, 23:26
Mo wrote:
13 Jul 2017, 21:13
JasonL wrote:It's weird to argue that firms are overall self destructively disinterested in profit. Yes things can be strange in individual cases.
Also, it's clearly not all firms. Look at how much it costs to hire a developer now compared to in 2008. But it's clear that some firms are unwilling to adjust wages accordingly. This is the employer version of, "Why will no one pay me $20/hour to stock shelves?" The answer is because stocking shelves is not worth that much to us. Same goes for, "Why will no one work on a black tar roof in the summer for $15/hr?" Because that job sucks and I can get a less shitty one for $13/hr.

This is, "There's no $100 bill on the ground," type logic.
When we're saying farmers are just forgetting how to offer more money to workers, I think it's "the ground is covered with $100 bills that nobody bothers to pick up" logic.
"Forgetfulness" might not be the exact term; could be more a matter of "Habit"-- labor (especially for shitty jobs) has been a buyer's market for so long now, the idea "nobody's taking this job at the wage I'm offering; perhaps I need to raise the wage or otherwise make the job better" just doesn't occur to him somehow. Or maybe it's more "Farmers are so used to hiring foreign migrants desperate for any paid work, the idea of making the job attractive enough to entice Americans is alien to them." That Georgia berry farmer didn't leave $100 bills on the ground; he left $750,000 worth of berries there.
By the time you read this, Kevin Eason figures he will have lost $750,000.

Eason, a blueberry farmer in the South Georgia town of Alma, in January used the U.S. Department of Labor’s migrant worker visa system to request 100 migrant workers from Mexico. None have arrived yet.

Russ Goodman in January requested 500 migrant workers from Mexico to arrive at his 600-acre Homerville farm on March 1 to pick blueberries. So far, he has 30.

“A week or two is a delay. Two months is you’ve lost your crop,” said Goodman, who estimates he has already lost several hundred thousand dollars.

Goodman and Eason are just two of an untold number of Georgia farmers facing millions of dollars in losses as crops rot on the vine due to lack of labor for harvest.

The Georgia Department of Agriculture and the American Farm Bureau Federation say the U.S. Department of Labor is woefully behind on processing applications for foreign migrant worker contracts and the feds’ failure is costing farmers more in lost crops than previous years.
I'm familiar with the argument "If we pay berry-pickers more, the cost of berries will rise to cover the extra wage!" But how much will the price of berries rise if the berry supply drops because crops are left rotting in the fields?
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Re: Market Failure!

Post by Eric the .5b » 14 Jul 2017, 04:52

I know you're not being literal, Jennifer.

Also, a rise in the price doesn't matter. What matters is how much the labor would cost. You keep going on about how the farmer needs to massively raise wages to get the labor he needs,, but then you ignore the question of whether the harvest is actually still worth bringing in when he has to pay 500 people much higher wages than he planned and budgeted for. But no, he's just being dumb and illogical because it's so obvious to random people on the internet.
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Re: Market Failure!

Post by Mo » 14 Jul 2017, 08:48

Eric the .5b wrote:
14 Jul 2017, 04:52
I know you're not being literal, Jennifer.

Also, a rise in the price doesn't matter. What matters is how much the labor would cost. You keep going on about how the farmer needs to massively raise wages to get the labor he needs,, but then you ignore the question of whether the harvest is actually still worth bringing in when he has to pay 500 people much higher wages than he planned and budgeted for. But no, he's just being dumb and illogical because it's so obvious to random people on the internet.
Gee, it's not like I addressed that concern earlier in the thread. I would contrast these complaints with how McDonald's dealt with a tight labor market in ND a few years ago.
Me wrote:I can see that in a commodity business, like agriculture, where there's no pricing power among participants. But in something like an airline or the roofer in the story that I linked to earlier? Clearly there is unmet demand for their service and raising wages will increase prices and hit some of that demand down, but it won't crater it to zero.
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Re: Market Failure!

Post by Sandy » 14 Jul 2017, 13:18

I don't know if there's a ton of slack in the supply of airline pilots. I could easily see that paying enough to get someone to quit a major airline to come work for you would mean you would have to raise your prices to the point that it lowers sales to the point where you lose money versus just cancelling flights.
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Re: Market Failure!

Post by JasonL » 14 Jul 2017, 13:49

A given route for an airline is most closely approximated as a commodity.

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Mo
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Re: Market Failure!

Post by Mo » 14 Jul 2017, 14:29

Sandy wrote:
14 Jul 2017, 13:18
I don't know if there's a ton of slack in the supply of airline pilots. I could easily see that paying enough to get someone to quit a major airline to come work for you would mean you would have to raise your prices to the point that it lowers sales to the point where you lose money versus just cancelling flights.
There are a lot of regional airline pilots and they don't make that much money. Typically, they make less than the median American salary.
JasonL wrote:
14 Jul 2017, 13:49
A given route for an airline is most closely approximated as a commodity.
For major routes, like LAX-JFK, this is true, but for a lot of flights, not really. Especially if it originates out of an airline's hub (e.g DTW). The Horizon Air story was about regional flights from an Alaskan Air hub, which is far from commoditized.
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Re: Market Failure!

Post by Jennifer » 14 Jul 2017, 18:03

Eric the .5b wrote:
14 Jul 2017, 04:52
I know you're not being literal, Jennifer.

Also, a rise in the price doesn't matter. What matters is how much the labor would cost. You keep going on about how the farmer needs to massively raise wages to get the labor he needs,, but then you ignore the question of whether the harvest is actually still worth bringing in when he has to pay 500 people much higher wages than he planned and budgeted for. But no, he's just being dumb and illogical because it's so obvious to random people on the internet.

This random person on the Internet does indeed think it obvious that "If you can't find people willing to work for you, you need to do something to make that job more enticing somehow." Raising the offered wage is generally the easiest way to do this. (That said: the article about Georgia farmers doesn't say if they even tried hiring locals, rather than complain about the lack of foreign migrants.) And of course, it's not just limited to farmers in south Georgia; this entire sub-discussion stared with Mo's posted article about employers from many different industries wondering why they can't hire people in a time of low unemployment -- yet instead of upping their offered wages they'd sooner wish the unemployment rate would rise again.
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Re: Market Failure!

Post by Jason » 14 Jul 2017, 18:47

Highway wrote:
13 Jul 2017, 20:36
the same people who won't take a job for 15 dollars an hour are the ones who won't pay more than 6 dollars for a cheeseburger (and they'll complain about that 6 dollars with "I remember when these were 3 dollars!").
I want 1980s prices with 2010s wages!
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