Sunday, January 28, 2018

Sunday Morning Links

This and that for your Sunday reading.

- Noam Scheiber and Ben Casselman comment on the role of corporate consolidation in undermining pay and working conditions. And Meagan Day rebuts the claim that employers can be excused for ignoring not-yet-qualified pools of workers by pointing out that the same people once treated as unqualified are now being hired:
This relaxation of hiring standards is a stinging rebuke to right-wing economists, who for years assured us that the main reason for the stagnant post-recession employment rate was that workers themselves didn’t have the right stuff. Throughout the slow recovery, journalists from major papers made a cottage industry of finding CEOs complaining that their hiring searches were coming up empty. Conservative commentators chalked up high unemployment to a so-called “skills gap”: companies needed more qualified workers, they insisted, than were currently on offer.

But something wasn’t right. If companies really needed qualified workers, why weren’t they raising wages to attract them? Or why weren’t they lowering their qualification standards or offering training to less experienced new hires? If companies really did have jobs that desperately required filling, they would have been working harder to fill them. Some flagged this inconsistency early on. “The reason markets adjust,” wrote management professor Peter Cappelli in 2013, “is because the participants, in this case the employers, eventually learn that they either have to raise their pay or lower their expectations in order to get the workers they need.”

The right wing’s explanation for lagging unemployment rate was a classic supply-side argument. The trouble, the argument went, was that firms weren’t getting what they needed to flourish — in this case, an adequate supply of skilled labor. The Left countered with a demand-side perspective: The reason for high unemployment was that ordinary people, not companies, weren’t getting their needs met. If they had more money in their pockets, ordinary people would increase their spending, demand for goods and services would rise, and that would create more jobs. More jobs means lower unemployment, which means greater bargaining power for the already employed, who won’t have to worry about their position being undermined by vast reserves of cheap labor.

At the time, left economists pointed out that even as employers were supposedly yearning for acceptable candidates but unable to find them, wages weren’t rising. “If employers cannot get the workers they need,” wrote Dean Baker in 2013, “then they raise the wages they offer to pull workers away from other employers. This is how markets work.” The fact that this wasn’t happening, Baker and others argued, was evidence that there wasn’t a real labor shortage, and that the “skills gap” was just another name for corporate whining. Employers were putting up job ads, sure, but they were also being hyper-selective about who they hired — for instance, refusing people with criminal convictions — a good sign they weren’t really in need.
- Meanwhile, Hadrian Mertins-Kirkwood examines how decarbonization can and should take into account the needs of workers in regions currently reliant on fossil fuels.

- Daniel Tencer reports on Justin Trudeau's callous suggestion that workers robbed of their pensions by corporate greed should be satisfied with Employment Insurance and the Canada Pension Plan. (And it's particularly worth noting how those programs have been allowed to stagnate in order to leave room for exactly the type of private pensions then diverted to enrich executives and shareholders.)

- Finally, Tim Harford discusses the strengths and weaknesses of a focus on self-reported happiness as the basis for policy development. And Andre Picard weighs in on the need to invest in social supports as the most effective means of improving health outcomes.

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