The Labor Shortage Is Real

Few conventional-media commentators are willing or able to discuss these factors in the labor shortage / declining participation trends.

Is there a labor shortage in the U.S.? Employers are shouting "yes." Economists keep looking for wage increases as evidence of a labor shortage, and since wage increases are still relatively modest, the argument that there are severe labor shortages in parts of the U.S. is unpersuasive to many conventional economists.

But if we look at "we're hiring" signs and billboards, it's clear employers are having trouble filling available positions. Longtime correspondent Harvey D. recently submitted this list of billboards advertising job openings in South Carolina:

"Here's a sample of billboards in upstate South Carolina, a heavily industrialized area along I-85:

Michelin - $16.50 & up to start, depending on experience.

BMW - $18.50 & up (not to mention that they're going to build the 23,000 Amazon delivery vans there.)

MAU (staffing firm) - $18.50 & up for forklift operators; they have 3,000+ students in industrial skill training courses in GA/SC/NC/AL 

DHL (staffing) - need forklift & general machinists, $20 & benefits

Greenville Tech (vo-tech school) - recruiting students for master welding classes, you can make $80K w/ 5 yrs experience.

Even Chick-Fil-A is offering $13 w/ bennies for full/part-time if you can pass a drug test and are 18+...

every trucking firm & almost every business has a banner in their front yard saying "WE'RE HIRING".

There are numerous theories about the causes of labor shortages and the lack of wage pressure. One reality Harvey described in his email is the difficulty small businesses have in raising wages as 1) the cost of benefits such as healthcare insurance skyrocket, pushing total compensation costs higher even if the wages employees see remain the same and 2) the difficulty in passing on higher labor costs.

Few small businesses are monopolies; if prices move up, customers go elsewhere or put off the purchase. Even corporations' ability to raise prices without losing sales is limited, hence the popularity of reducing quantity (the ever-shrinking serving size) or quality (appliances with inferior components that fail in a few years, etc.)

Let's look at the labor participation rates for the populace at large, women and men. The labor participation rate reflects the percentage of the population that's in the workforce, either working or actively looking for work.

That the number of people in the workforce has declined significantly is well-known. The US Census pegs the number of people 'not in the labor force' at 95 million.This includes people who are disabled, in school, etc., so the number should be taken with a grain of salt. But the decline in the relative size of the labor force is stunning:

Interestingly, the labor participation rate for women has held steady compared to the entire populace.

Now compare it to the labor participation rate for men, which has absolutely cratered:

Labor Force Statistics from the Current Population Survey (Bureau of Labor Statistics)

It's hard to find statistics for many of the dynamics behind the sharp decline of male participation in the official workforce, as few institutions track such trends such as the number of men making a living in the black market. It's hard to estimate this number and hard to get those engaged in the black market to answer honestly to questions about activities that break laws requiring the reporting of all income, regardless of source.

Despite the lack of statistics, we can assemble some anecdotal factors:

1. Failing the standard employment drug test. Should marijuana use bar all employment? Employers are beginning to question this Drug Gulag Inquisition assumption. Anecdotally, up to 70% of all applicants fail these drug tests.

2. Felony conviction for non-violent (i.e. drug-related) crime. Once again, Employers are beginning to question this Drug Gulag Inquisition assumption, as felony convictions are excluding millions of otherwise employable people from the conventional job market.

3. Pay not worth the trouble. As difficult as this might be for many to accept, a job paying X dollars per hour can be viewed as not worth the trouble if the commuting costs are high, the cost of living near the job is higher, and some other source of lower but still adequate income is available: disability, parents, girlfriend, dealing drugs, working informally for cash, the gig economy, etc.

4. Informal / black-market income. $15 per hour after deductions equals $11 per hour, while $15 in cash is still $15. Over the course of a year, that's the difference between $30,000 and $22,000. That $8,000 represents a 36% "raise."

5. Misplaced sense of pride / dignity. Many tradecraft jobs (welding, construction, etc.) have traditionally provided male workers with strong identities and sources of pride and dignity. That even these jobs are going begging suggests the possibility that at least some males no longer gain the pride / dignity they desire from work, or they've surrendered the desire for earning pride / dignity in the workplace: work is for chumps,etc.

This also suggests that some percentage of the male workforce no longer feels the same need as females do to take jobs in the formal economy regardless of the costs and indignities that go with the territory of commoditized work / employment. In other words, opting out of formal employment appears to be much less of an option for women than for men.

Few conventional-media commentators are willing or able to discuss these cultural / financial factors in the labor shortage / declining participation trends. As with so much of American life, the inconvenient realities may upset somebody, so better to stick with magical-thinking or politically-correct truisms that are completely out of touch with reality but oh-so-acceptable to the status quo.

Maybe it's time for a real discussion of work and employment in a system dominated by mobile capital and self-serving insiders.


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How Do We Change Our Lives in a System That's Broken?

Rather than fight a system designed to thwart us, we need a model for our own lives that bypasses the perverse tides and obsoletes the impediments in our path.

Everyone wants to change their lives for the better (or preserve what's positive), and this is relatively straightforward in a healthy system with positive incentives and a transparent, productive set of rules and feedbacks.

But what if the system is broken? How do we change our lives for the better in a dysfunctional system of unearned privilege and perverse incentives? Needless to say, it's difficult, and this is why we see a rise in inward-directed solutions.

If we can't change the external world we inhabit, then the "solution" is to nurture an inner tranquility. It's no wonder that Taoism--perhaps the ultimate inner-directed philosophy--arose during the Warring States era in China, when social unrest and conflict were endemic.

But what about real-world changes such as improving our health, fitness, resilience, work/career satisfaction, income security and psychological well-being? When it comes to affecting real-world changes in a broken system, it often feels like we're swimming against the tide: the system doesn't make positive improvements easy, despite an abundance of lip service to individual goals such as losing weight, improving our career options, etc.

There are number of reasons for this; here are a few:

1. The economy, society and systems of governance are all changing in fundamental ways. I've written a lot about these forces-- AI, robotics, globalization, financialization, the concentration of wealth and power at the top, etc. --and how we can respond positively, particularly in my books A Radically Beneficial World and Get a Job, Build a Real Career and Defy a Bewildering Economy.

The point here is that even if our system was fair and functional, the structural dynamics are generating uncertainty, instability and a diminishing number of winners and an expanding multitude of losers.

2. But we don't inhabit a fair and functional system; the status quo is dysfunctional, dominated by self-serving insiders, the Protected Class and various elites. Actual inflation (loss of purchasing power) is under-reported, and other metrics are gamed or distorted to improve the optics--that is, the perception.

Markets have been grossly distorted to reward the already-wealthy; stocks and housing are been transformed into signals of economic strength when in reality they are signals of excess and asset bubbles that increase wealth and income inequality.

3. Maximizing profit and convenience via marketing is the core of our economy now. Unfortunately, what's highly profitable and heavily marketed is often unhealthy or deleterious to our physical, mental and financial health: fast food, packaged food, social media, high-cost, low-utility higher education, medications with serious side-effects, and so on.

Accomplishing changes often requires declaring war on convenience, as convenience is the enemy of everything required to swim against the tide:discipline, sustained effort, sacrifice, etc.

So how can individuals and households manage positive changes in a destructive, perverse and broken system?

One place to start is to eliminate as much marketing as possible, and as many negative, deranging distractions as possible. This means limiting media and social media exposure to a bare minimum.

Another is to focus on value rather than convenience. This goes against the tide not just of marketing but of "progress," which is implicitly defined as an increase in convenience and a decline in drudgery, effort and discipline.

Ironically, most of life's most rewarding things are not convenient at all:fitness, real food prepared at home, acquiring skills with steep learning curves, etc. These are all terribly, horribly, irrevocably inconvenient.

Third, look outside the mainstream and status quo "solutions." Solutions outside the mainstream status quo tend to be inconvenient, wrenching and difficult, and there is very little institutional support for anything outside the mainstream. Rather, the entire weight and force of the status quo is put to bear in support of passive compliance with the approved "solutions."

For example, the approved "solution" to ill health is surgery or costly medications that haven't even been tested for interactions with other powerful medications.

The "solution" to the high cost of housing in desirable cities is to surrender the household income for the next 30 years and buy a decaying bungalow for $800,000 or more (or $1.8 million in bubble-mania neighborhoods).

These are simulacrum solutions; they only worsen the initial problem, not solve it.

As Bucky Fuller noted in his famous dictum, "You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete."

This is as true of our individual lives as it is of systems. Rather than fight a system designed to thwart us, we need a model for our own lives that bypasses the perverse tides and obsoletes the impediments in our path.

This essay was drawn from Musings Report 25. The Musings Reports are emailed to subscribers and patrons weekly.

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Fixing Infrastructure Isn't as Simple as Spending Another Trillion Dollars

It isn't easy to add new subway lines or new highways, and so "solutions" don't really exist.

If there's one thing Americans can still agree on, it's that America needs to spend more on infrastructure which is visibly falling apart in many places. This capital investment creates jobs and satisfies everyone's ideological requirements: investment in public infrastructure helps enterprises, local governments and residents.

Unfortunately, it isn't a simple as spending another trillion dollars. Spending money is the easy part; actually fixing what's broken isn't just a matter of spending more money.

The poster child for spending trillions on infrastructure and getting very little value is Japan, which has funneled much of its fiscal stimulus over the past 30 years into vast and largely needless infrastructure projects: bridges and roadways that are lightly used being just one example.

The reason for the this low-value-creation policy is the political power of the construction industry and the convoluted political structure which gives rural areas inordinate political power over public spending. As a result, enormously expensive and utterly needless highways and bridges litter lightly populated rural communities which have become dependent on construction jobs for what little remains of the local economy.

In other words, what's broken in Japan remains broken. Spending more on infrastructure hasn't fixed what's dragging the nation into permanent stagnation.

If you live in any of America's major urban centers (or happen to visit), you know that traffic congestion is now off the scale. From Portland to Las Vegas to Atlanta, traffic jams and crushing commutes are now the norm.

Soaring housing costs have pushed workers farther into the exurbs, lengthening commutes and choking highways constructed for a much smaller populace. The population of the U.S. is now a third of a billion people, and the vast majority of the nation's infrastructure was designed for a much smaller populace, a significant percentage of whom were expected to reside in rural counties.

Globalization has depopulated much of rural America: as the rural economy withered, people moved to urban / suburban centers, adding to the millions of new immigrant residents who typically live and work in urban cores.

If you look at charts of infrastructure needs and spending, you get a mixed bag. The heavily publicized chart of underfunded infrastructure based on data from civil engineers (hmm, no self-interest here?) suggests the U.S. has been under-investing, yet other charts show a rather steady level of spending over the decades (as a percentage of GDP) -- see charts below.

While many claim public infrastructure spending has declined sharply, this chart reflects remarkably stable spending.

And let's not forget that state and local government spending has soared far above GDP growth: local governments are spending huge sums on something, and if it isn't infrastructure, then maybe budget priorities need to be revisited.

The problem few are willing to discuss is the impossibility of changing the big picture of congestion. While bulldozing swaths of cities to lay down a new 6-lane freeway was the go-to "solution" to congestion in the 1960s, that has fallen out of favor for a variety of reasons, including the destruction of urban neighborhoods, the inordinately high costs, the legal challenges and the terribly inconvenient reality that the new freeway quickly filled with vehicles, leaving older roadways just as choked.

"Solutions" such as new underground roadways and new subway lines end up costing tens of billions of dollars and take decades to build. It took 24 years after the 1989 Loma Prieta earthquake to complete a new bridge span across part of the San Francisco Bay. Nobody dares speak about it, but a very good argument can be made that America has forgotten how to build large-scale projects in a timely manner, on budget and with a level of quality that doesn't demand immediate repairs.

The congestion isn't just on freeways and highways. Local streets are taking a pounding as everyone seeks alternative routes, and subway systems are overloaded. The S.F. Bay Area's BART regional (heavy-rail) transit system is spending billions of dollars repairing aging tracks and other infrastructure, and buying new cars with more room for standing commuters, reflecting the reality that riding BART is now a cattle-car experience of jostling through crowds most hours of the day and evening.

It isn't easy to add new subway lines or new highways, and so "solutions" don't really exist. This isn't what people want to hear, but when you add millions of residents and vehicles to urban areas, you get congestion that can't be solved by adding a another lane or another subway line in a decade or two.

Meanwhile, in rural America, roads are crumbling, but does it make sense to repave lightly used roads at enormous expense?

These are the discussions we need to have, but instead we're opting for the magical-thinking and oh-so-easy "fix" of everything will be fine if we just spend another trillion or two.

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Droit du Seigneur and the Neofeudal Privileges of Class in America

Want to understand the full scope of neofeudalism in America? Follow the money and the power and privilege it buys.

The repugnant reality of class privilege in America is captured by the phrase date rape: the violence of forced, non-consensual sex is abhorrent rape when committed by commoner criminals, but implicitly excusable date rape when committed by a member of America's privileged elite.

Compare the effectiveness of excuses offered by privileged elites (we were both drinking, I didn't hear her say no, etc.) when offered in court by less privileged males on trial for rape. The privileged elite is acquitted or given a wrist-slap while the commoner gets 20 years in prison.

This implicit privilege to non-consensual sex was known as Droit du Seigneur(right of the lord) in feudal Europe. While scholars debate whether the right of lords to have their way with female subjects was institutionalized, it doesn't take much imagination to see the lack of recourse unmarried female serfs had if summoned to the lord's lair.

The "right" to non-consensual sex is simply one facet of class privilege in America. One need only examine the histories of Harvey Weinstein and Bill Clinton to see how Droit du Seigneur works in America: from the perverse perspective of the privileged, the female "owes" the "lord" sex as "payment" for his interest in her, or (even more offensively, if that's possible) the female is "fortunate" to have attracted the violent sexual gratification of the "lord."

While the standard presumption of sexual assault / date-rape is that it's all about sex, the much more disturbing reality is that it's a crime of violence.Force and violence are also privileges of the New Aristocracy, both the direct violence of sexual assault and indirect violence threatened or manifested by the innumerable thugs that surround the New Aristocracy.

This right to violence and force manifests in all sorts of ways: the New Aristocracy constantly threatens and abuses underlings (the neofeudal equivalent of serfs), opponents with less power and other nations; violence and force are rights across the entire spectrum.

Another implicit right of the Privileged Few is a free pass / way out: caught shoplifting? Pressure is applied and charges are dropped. Drunk driving? Ditto, unless the incident is recorded and posted publicly.

The financial crimes of fraud and embezzlement never come back to cost the instigators. Their shell corporations pay a pro forma fine and the criminal New Aristocrats walk away, free to indulge their "right" to insider scams.

The New Aristocrats are also entitled to can't-lose "opportunities" to reap millions from crony-capitalist / insider skims unavailable to commoners. These "opportunities" come from a multitude of sources: from elite-university classmates, well-connected fathers-in-law, senior partners in the firm, political fixers, Hollywood / entertainment execs, etc. that are exclusive to upper-caste insiders.

The existence of a New Aristocracy is now undeniable, and this is upsetting the commoners' faith that America is a meritocracy. The sobering reality is some are more equal than others in America.

Who's in the New Aristocracy? Start with this chart: the top .1%, and everyone they can buy, for example politicos.

The New Aristocrats feel entitled to remain untouchable, regardless of the enormity of their crimes. People are starting to wake up to neofeudal realities of life in America, but the sexual privileges of this class are only the tip of the iceberg. Want to understand the full scope of neofeudalism in America? Follow the money and the power and privilege it buys.

Travesty of a Mockery of a Sham Book Sale: (September only) Why Our Status Quo Failed and Is Beyond Reform is now $2.99 for the Kindle ebook, a 25% savings, and $6.95 for the print edition, a 22% savings.

Why Things Are Falling Apart and What We Can Do About It is now $2.99 for the Kindle ebook, a ridiculous 70% discount, and $10 for the print edition, a 50% savings. 


My new mystery The Adventures of the Consulting Philosopher: The Disappearance of Drake is a ridiculously affordable $1.29 (Kindle) or $8.95 (print); read the first chapters for free in PDF format.

My new book Money and Work Unchained is now $6.95 for the Kindle ebook and $15 for the print edition.

Read the first section for free in PDF format.


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