Topic: The Labor Market Is Broken (Read 201 times)

I agree to you, sadly here in my country doesn't know how to support the feeljng of their countrymen, it is very hard to have a primary work and also having a secondary work because having only 1 work is not enough to sustain the lives of your family, little by little inflation makes it harder to budget our salary so even you have multiple jobs it is hard for us to get paid right and accurately.

Many don't care about workers, even when there are demands for a salary increase which is only a few percent they are thrown out and never heard of, labor has indeed become an issue in many countries so that in some countries there are special labor parties that fight for a better life for workers.

Many don't care about workers, even when there are demands for a salary increase which is only a few percent they are thrown out and never heard of, labor has indeed become an issue in many countries so that in some countries there are special labor parties that fight for a better life for workers.

Many don't care about workers, even when there are demands for a salary increase which is only a few percent they are thrown out and never heard of, labor has indeed become an issue in many countries so that in some countries there are special labor parties that fight for a better life for workers.

If indeed labor markets are broken. What does the long term outlook resemble. What can average and ordinary people do to mitigate the dangers.

here in the UK.
the health service(nhs) has not given cost of living increases / pay rises to nurses properly over multiple years. to match inflation

some nurses end up going part time on their NHS contract and then working THE SAME ROLE but under an agency (called bank) where they get paid more for filling in gaps of shift patterns (like substitute teachers).

yep nurses paid as NHS employees, reduce their NHS hours and then work for a agency to do their normal role, for more pay because the NHS pays more to the agency than to its own staff direct

imagine it
2 nurses doing the same job. at £12 an hour(£25k/y)
then the next day. the same two nurses doing the same job but one is paid £15/h as a agency still doing the same role but netting £31k/y

if the NHS can afford to pay agencies more then £15 to ensure the agency nurse gets their £15. then the NHS should be paying the nurse under NHS contract more then £12 and actually ensuring nurses that want to be nurses dont just do the flexi-time 'come when they please' and 'leave when they please' contract that allow them to mess with schedules to then need agencies

actually paying nurses a fair wage and have enough nurses on the NHS contract to cover if one was sick is how things should work.

imagine it
2 nurses doing the same job. at £12 an hour(£25k/y)
then the next day. the same two nurses doing the same job but one is paid £15/h as a agency still doing the same role but netting £31k/y

if the NHS can afford to pay agencies more then £15 to ensure the agency nurse gets their £15. then the NHS should be paying the nurse under NHS contract more then £12 and actually ensuring nurses that want to be nurses dont just do the flexi-time 'come when they please' and 'leave when they please' contract that allow them to mess with schedules to then need agencies

actually paying nurses a fair wage and have enough nurses on the NHS contract to cover if one was sick is how things should work.

Isn't that just capitalism? Money gets more and more concentrated, and it's up to government to prevent that. The US isn't very good at preventing it, and the EU mainly acts in the interests of large corporations too, so the current result isn't really a surprise.

A market crash seems unacceptable to central banks nowadays, so the classic "reset" won't happen. What's left? War?

If the US labor market is broken beyond repair, the only way for the ordinary people to survive would be immigration, which is also expensive.
The rental costs being too high and the fact that many workers can't afford house/apartment in the USA is more like a housing/real estate problem, rather than a labor problem.
I'm not an expert, but AFAIK, the US labor market was flooded with Latin American people, which kinda deviates the supply of workforce.
Just like the rednecks in South Park keep saying "They took our jobs"... Perhaps reducing the immigration coming from Latin America might help for solving the problem. Maybe Trump was right about closing the border(I'm not a fan of Trump).

It is possible that the entirety of wage increases over the past 50 years have gone mainly to CEOs and executives. Wealth growth flatlining for other income brackets, could have reached a breaking point where having a job and working full time no longer allows many to pay their bills. In which case, the point and motive for working declines.

It is possible that the entirety of wage increases over the past 50 years have gone mainly to CEOs and executives. Wealth growth flatlining for other income brackets, could have reached a breaking point where having a job and working full time no longer allows many to pay their bills. In which case, the point and motive for working declines.

Of course there are other explanations.

It is possible that the entirety of wage increases over the past 50 years have gone mainly to CEOs and executives. Wealth growth flatlining for other income brackets, could have reached a breaking point where having a job and working full time no longer allows many to pay their bills. In which case, the point and motive for working declines.

It is known that many homeless living on the streets have full time jobs which do not allow them to afford the cost of rent. Not having to pay monthly rental fees greatly reduces the cost of living to only food and basic necessities. Basic living costs being more affordable, and it is possible that some beggars in the streets even manage to earn greater income than they would with a full time job.

If indeed labor markets are broken. What does the long term outlook resemble. What can average and ordinary people do to mitigate the dangers.

If indeed labor markets are broken. What does the long term outlook resemble. What can average and ordinary people do to mitigate the dangers.

and it is possible that some beggars in the streets even manage to earn greater income than they would with a full time job.

If indeed labor markets are broken. What does the long term outlook resemble. What can average and ordinary people do to mitigate the dangers.

It is possible that the entirety of wage increases over the past 50 years have gone mainly to CEOs and executives. Wealth growth flatlining for other income brackets, could have reached a breaking point where having a job and working full time no longer allows many to pay their bills. In which case, the point and motive for working declines.

It is known that many homeless living on the streets have full time jobs which do not allow them to afford the cost of rent. Not having to pay monthly rental fees greatly reduces the cost of living to only food and basic necessities. Basic living costs being more affordable, and it is possible that some beggars in the streets even manage to earn greater income than they would with a full time job.

If that is the current outlook of the labor force in the U.S. then I am no longer surprised why outsourcing companies are thriving today. The future is remote as some would say. A local employee would feel a $30 per hour is the fair amount for a particular task but employers who hires someone outside of the country or online may be able to pay for $10 per hour for the same job.

That "unfairness" they feel may turn out for the worse if more and more businesses choose to outsource.

Of course there are other explanations.

Employment is an ultimatum game, where playing along might get workers less than employers, but refusing to play gets everyone zero.

Inflation is up. The stock market is down. Unemployment is just 3.5 percent. Yet labor force participation remains stubbornly low, with only 62.3 percent of the civilian population working or actively looking for work—well below pre-pandemic levels. And even before the pandemic, that figure had been steadily declining for years.

There are plenty of uncharitable theories about why the American work force is shrinking as a percentage of the population, resulting in 10 million unfilled jobs and a lot of well-wrung hands. The most common is simply that Kids These Days don't want to work and it'll be Gen Z's fault when the U.S. is no longer a global economic superpower.

A substantial number of younger people are not, in fact, keen to get hitched with an employer. In 2022, "for every [25- to 54-year-old] guy who is out of work and looking for a job," American Enterprise Institute economist Nicholas Eberstadt told the Fifth Column podcast, "there are four guys who are neither working nor looking for work."

But the Kids These Days hypothesis is complicated by the fact that while the labor force participation rate includes people 16 and older, the largest component of the most recent reduction appears to be older people who took retirement early and/or previous retirees who have not rejoined the work force at the rates they once did. This trend may well reverse itself if the stock market continues to decline and retirement accounts evaporate, but for now it looks like baby boomers turning on, tuning in, and dropping out—however belatedly—are at least as much of a labor force problem as wayward youths.

What these two groups have in common can be found in an old chestnut of game theory: the ultimatum game. Even if you don't know the 1982 paper that popularized the experiment, you've certainly encountered the phenomenon. Imagine two people, one of whom is given $10 and told to propose a way to split the money with another person—a stranger, let's say. The catch is that if the stranger doesn't agree to the deal, they both get nothing.

Economists and psychologists alike love this experiment because it captures an interesting facet of human behavior that appears irrational at first glance. Surely the second man should accept any deal offered by the first. So what if he's offered just a penny? Free money is free money! Who cares if the other guy gets to keep $9.99? Instead, across all cultures and contexts, people reject offers they perceive to be unfair: The details vary, but human beings turn down money with astonishing consistency if they think they're being done dirty.

This allegory* to economic unfairness may well be what unites the "quiet quitters" of Gen Z and the early boomer retirees: They increasingly perceive the terms of employment to be so off-kilter that they would rather not work at all, even if that decision screws them over in the end.

"The process of contracting a worker is often close to ultimatum bargaining," explained Elwyn Davies (then with the University of Oxford) and Stanford University's Marcel Fafchamps in a 2016 paper exploring the effects of competition on behavior within the ultimatum game. "The employer specifies a job description and proposes a wage and the worker accepts or rejects."

So if employment is an ultimatum game—where playing along might get workers less than employers, but refusing to play gets everyone zero—what is causing the perception that the terms of employment are no longer worth accepting, even when both parties would benefit?

Positive views of capitalism more generally have slipped since 2019, with 39 percent expressing negative views in an August Gallup poll. Another Gallup poll found an uptick of 3 percentage points in people who say they are "completely dissatisfied" with their jobs, while the number of people who were "completely satisfied" fell 8 points.

The perception that conventional jobs are essentially offering workers a pittance while greedily holding back the bulk of the wealth is common in places like the r/antiwork subreddit, which has 2.3 million members. In fact, there's at least one discussion of the ultimatum game itself on that subreddit, which pulls some figures on companies' revenue vs. worker compensation and concludes: "If working for Apple was the ultimatum game, the proposer just got $100. They're offering you 23 [cents], and they keep $99.77. Deal or no deal?" The relative sizes of these numbers might also explain why simply raising wages hasn't brought people into the workforce, especially when paired with increased awareness of and dissatisfaction with the gap between CEO pay and worker pay in large corporations.

Early retirement also makes some sense on this accounting. Older people may have expectations about what their compensation or responsibilities should be, with reference to either the generation who retired before them or to their younger colleagues. When they are not offered what they perceive to be their due, they would rather zero out their income than continue to work.

Paul J. Zak, a neuroeconomist who has done experimental work on the role of empathy and perspective-taking in the ultimatum game, cautions against an approach that is "too econo-centric." Large and unpredictable government subsidies to individuals and corporations erode the broader sense that hard work will be rewarded and is worth pursuing, even if the wages offered previously seemed fair. There is almost certainly more at play than wage and price levels alone.

The pandemic threw a wrench into this and every sociological and economic question and will continue to annoy academics looking for patterns for at least another century. Many jobs did get appreciably worse during the height of COVID, when death suddenly became a possible side effect of working in the grocery store, a factor that shouldn't be underestimated. But decreases in labor force participation predate the pandemic.

In many ways, work is better than it has ever been. It is less dangerous, requires fewer hours, is less physically taxing, and affords the purchase of better stuff than for most of human history. But the supply chain interruptions of recent years paired with rapid changes in the terms of employment during the pandemic may well have disrupted the sense that the deal workers were being offered was fair.

The temptation of the ultimatum game is to dismiss the results as irrational and therefore bad. It's easy to dismiss workers as lazy or employers as short-sightedly selfish. But the consistency with which individuals in nearly all situations perform in the ultimatum game actually highlights something good about people: They care about what is fair and they will devote significant effort to making deals where everyone wins. The authors of that 2016 paper found, for instance, that in an environment with multiple employers and multiple employees, the offers tended to start higher and employees tended to do better overall. Competition causes employers to think harder about what workers want and to offer it as seamlessly as possible.

Right now there's something broken in our economy that is preventing employers and employees from cooperating with each other. The result is that too few deals are being struck and everyone is suffering. The challenge ahead is how to rebuild a sense that the game is fair and everyone is playing in good faith.

https://reason.com/2022/12/01/the-labor-market-is-broken/