http://driftglass.bl...2012/11/jobs.html

Suffice it to say that, right this minute in the Chicagoland area there are around 30,000 manufacturing jobs going unfilled.

Imagine that? I mean, it's certainly not a magic bullet, but whatever cause consumes you -- antipoverty, social justice, salvaging the middle class, making sure every kid gets a great education -- the fact that there are a lot of decent, well-paying jobs going begging at the same time unemployment lingers around 8% like the party guest who never leaves should piss you off.

The good news?

All we have to do to fix this is to overhaul the entire, dysfunctional, underfunded, over-bureaucratized, patchwork "system" that gets people of all ages ready for the jobs that are really available.

He got some push-back in the comments and responded here - http://driftglass.bl...witting-tool.html

The long comment there makes the point that you have to be careful about comparing average salaries with average wages. A welder with a few years experience is much more likely to make $25k a year than $60k a year.

I have some sympathy for the argument that "we can't get the people we need". Anyone who has been involved with recruiting people knows that it can be a problem to find someone who is a good fit, even in a time of high unemployment. I have more sympathy, however, for the argument that if you believe in capitalism and the free market, then wages should be a part of the supply-and-demand equation. If you can't get the people you need, maybe you're not offering enough pay.

But we need to look one step beyond. If wages for welders suddenly increase by 30% to fill vacant spots, then others in the company are going to want higher wages as well. Most companies can't afford to have their labor costs suddenly increase 30%...

What's the solution?

Better education and training for available jobs and jobs of the near future?

No. I don't think so.

Education is vitally important for many reasons: 1) to allow a functioning self-government that is effective and progressive; 2) to improve the health and welfare of the country; 3) to reduce the risk of war; 4) to provide a foundation for new knowledge, new industry, new jobs.; 5) to get a substantial number of people out of the labor market for a few years and put less downward pressure on wages; 6) to keep young people off the street and less susceptible to the temptations of various vices that idleness provides; etc.

But it won't reduce unemployment, and it won't increase wages for jobs on its own. One can even argue that it would make unemployment worse - "you're over qualified" "labor costs are too high, we need to move production to Somalia".

What we need to reduce unemployment is greater demand in the economy.

Companies don't hire people because they want to. They hire people because they must to address business demand. Increased demand means companies need to work harder. Their employees need to work longer, and that costs more money. There comes a point when it's cheaper to hire new people than pay overtime or time-and-a-half to existing people. When there's enough demand in the economy, wages rise. That makes it more appealing for people to find out what's necessary to get those jobs. That makes it more appealing for people to go to school to get the knowledge and training for those positions. And that training makes it easier for new people to enter those positions that require specialized training.

There are lots of experienced people with decades of welding experience that can be trained to run automated welders or whatever. They would be ideal for at least some of these manufacturing positions. But they aren't willing to take entry-level positions at $15/h when they were making 3x that before. They have expenses that someone just out of high school doesn't.

It's not a shortage of qualified people, it's a distorted labor market due to lack of demand.

What's the solution? Given the depressed state of the economy, the private sector can't fix this. Government policies that encourage demand, encourage affordable high-quality education, and encourage investment in jobs-producing industries are the solution.

When I was young, I was willing to take a low paying job for a while to get experience and have some income. (I can tolerate just about anything for up to 5 years if there's light at the end of the tunnel.) But I knew that I wasn't going to be making minimum wage + $1.50 for the rest of my life. Someone with a family isn't going to take a $15/h job that requires specialized training if there's no hope of higher wages in the future. For the last 25 years or so, median household income has been flat...

My $0.02.

Cheers,
Scott.

We should have done more of the things that were traditionally done during and after recessions:

1) Extending unemployment benefits until the unemployment rate was close to normal.
2) At least maintaining (and not cutting) food stamp benefits.
3) Increased (not cutting) aid to states and cities so that they didn't have to lay off huge numbers of teachers and other public employees.
4) Substantial increases in infrastructure spending while interest rates are low.
5) Substantial increases in financial aid for education and training to keep people off the street and lay a foundation for smarter growth in the future.

Etc.

Basically, you increase demand by giving money to people who will spend it. Yes, the banks needed to be rescued, but that was not sufficient. As Atrios says almost every day - http://www.eschatonb...-happen-when.html

Too many famous economists decided to forget standard economics and buy into the stories from the no-nothings on the right who screamed about inflation. It was a willful destruction of the knowledge painfully gained after the Great Depression and the various crises after.

We know how to get out of this mess. The instructions are in the classic introductory economics textbooks. Our politics is too broken at the moment to apply them. (Though we haven't forgotten quite as many lessons as the Europeans...)

Things are different when the economy blows up after a bubble. Austerity makes things worse. You have to spend, and spend a lot, to get out of it. When the recovery is well underway, then you slowly reduce the stimulus. And yes it does work and yes it doesn't lead to Zimbabwe!!!11 - see the USA after ~ 1940 - 1972.

Will Congress do anything? Hard to say. There are too many Teabaggers still in power, but some things will probably be done on the margins. As long as Europe doesn't collapse and as long as China doesn't fall into a recession (which I don't see how they avoid forever), we'll probably be firing on all cylinders by 2015 or so. But it shouldn't have taken 8+ years to crawl out of the hole the Republicans created...

My $0.02.

Cheers,
Scott.

It's very good of you and your wife to help your neighbors like that.

We give what we can, in cash and in food drives, but don't do the actual hands-on work. Folks like you do the heavy lifting, and see the heartache first hand. It must be very hard, even with the satisfaction you get of helping those in need.

I'm convinced things will get better in the coming 4 years (as long as Europe and China don't blow up), but it will continue to be a long slog. Hang in there, and thanks again.

Cheers,
Scott.