A Shortage of Labor
The official unemployment rate in America, currently at 4.6%, is relatively low when
compared with unemployment rates of previous months.
This means that the number of people
searching for jobs in the U.S. has been declining, and employers have been faced with a shortage
There is now a smaller pool of labor, so the hiring firms have a smaller selection of
applicants, implying that there is a necessity for them to be more competitive in acquiring
The labor shortage problem also applies to the rest of the world, as reported in “Where
are All the Workers?” by Peter Coy and Jack Ewing.
In economics, a shortage of labor usually means that workers are gaining more bargaining
power, and they’ll be able to push for higher wages and more benefits, at least in the United
It doesn’t work this way for the rest of the world, though.
The thing is, there is no
shortage of bodies to do such things as manual labor.
The trouble is the inability of companies to
find workers skilled enough and willing to do that work for low wages.
Companies just aren’t
willing to pay their employees more, no matter how much they need people.
Corporate greed is manifesting itself in the massive layoffs of workers in the past months.
Despite their complaints of shortages, businesses are firing their employees.
This seems almost
By doing this, it is obvious that these businesses are only attempting to
maximize their margin of profit, and they are unwilling to pay needed employees the money they
Also, in keeping down wages and even firing workers, they keep the wages of the
working class down, and as we know, the laborers are also consumers.
If the consumers have
less disposable income, they are less inclined to buy goods and services, which means that the
firms end up withholding money from themselves.
This is based on the idea that everyone’s
income is someone else’s expenditure, and vice versa.
Less money is circulating, so the firms