[panarky]

It's not perplexing at all. People forget that the market for labor is just like other markets.

If you're selling a thing and the market price is lower than the thing is worth, then you don't sell it.

If the minimum wage kept up with the increase in worker productivity over the last 50 years, today's minimum wage would be about $19.50.

So workers who refuse to take dead-end jobs are simply rational economic actors refusing to sell a large fraction of their existence for a pittance.

If employers have job openings they can't fill, while workers are idle because they won't work so cheap, then shouldn't the market-clearing wage increase? If not, what's preventing it?

[ams6110]

> If employers have job openings they can't fill, while workers are idle because they won't work so cheap, then shouldn't the market-clearing wage increase? If not, what's preventing it?

Other workers will work cheap. See, it doesn't matter what you think your time is worth. The supply of people willing to work is what determines what it is worth.

Minimum wage jobs can literally be done by almost anyone who is not mentally or physically handicapped. You can "refuse to sell" your labor at that price, but when you have nothing in the way of skills or experience to offer, you really are just choosing to be unemployed.

[panarky]

The key point is that employers have job openings they can't fill [1].

If you are correct that other workers are willing to work that cheap, then the jobs would be filled.

Workers exist but are unwilling to work that cheap, so they're idle while employers have unfilled jobs.

Whenever you see a news story that says "employers having difficulties finding qualified workers," you can safely replace that phrase with "employers are unwilling to pay the market rate for labor."

[1] U.S. job openings hit record high of 7.14 million https://www.investing.com/news/economic-indicators/us-job-op...

[dleslie]

Indeed; they're either unwilling to pay the market rate for the labour _or_ they are unwilling to train.

Any time an employer states that they cannot find a _suitable_ candidate for a position it is an admission that they are unwilling to train.

[gwright]

I think you are excluding other scenarios:

A business may not be able to pay minimum wage and training costs. The solution there is more qualified people (but they take better paying jobs), lower wage (legally impossible), pass increases on to consumers (higher wages paired with higher costs). Wage increases can't magically be absorbed, especially in service industries with plenty of substitutes. Customers will just disappear.

The best example I can think of is restaurants closing in NYC because the increased wage costs due to increased minimum wage requirements made certain business models unsustainable: http://thefederalist.com/2018/07/16/15-minimum-wage-hike-wre...

[dleslie]

You gave many reasons why an employer may be unwilling, but it's the same outcome regardless: an unwillingness to train or pay more.

[gwright]

I don't think that is an accurate summary of the situation at all. In particular your characterization asserts indirectly that that the employer is doing something wrong, that if only they were "willing" the problem would be rectified. But it is nonsensical to think that a business is going to willingly make choices that go against its own self interest, that hurts its business.

It makes no sense to hire an employee for $X/hour if that won't increase revenue by at least $X/hour.

It makes no sense to raise prices to cover an employee's wages/training for $Y/month, for example if revenue goes down by more than $Y/month (higher prices => less sales)

[JoeAltmaier]

Yes all this. My mother-in-law lived through the institution of minimum wage in America. She saw many people lose their part-time jobs because of it. Initially it was a big upset.

[ams6110]

Thanks, your clarification is helpful. I think that it's more accurate to say, rather than "employers are unwilling to pay the market rate for labor," that "at the market rate for labor, employers have other options than employing workers."

Either they decide that the work is not worth doing at the higher cost, or they have some way to get it done other than directly hiring people to do it (automating, outsourcing, assigning more tasks to current employees, etc.)

[gwright]

The "other options" category also includes closing because the business is no longer viable given the legal/market constraints.

[irrational]

But, what happens where there are no workers? Everywhere I go there are signs saying help wanted. But, unemployment is practically non-existent where I live. Everyone who wants a job, has a job.

[panarky]

Everyone who wants a job at the wage employers are offering has a job.

The unemployment rate doesn't count people who aren't looking for work.

The labor force participation rate measures the percentage of the working-age population between 16 and 64 who are either working or looking for work.

That's currently about 62%.

If wages were higher, then more people would be willing to work.

[geezerjay]

I would add that sometimes having skills and experience isn't enough if they are in fields that for some reason ceased to be in demand.

[supertrope]

Cue those who want to cut minimum wage and public assistance so unemployment is even more dire.

[gwright]

From a public policy standpoint, I think it would be better to have people at even a very low rate with public assistance as appropriate than to have people not working at all and dependent 100% on public assistance.

Increasing the minimum wage results in some people getting a higher wage and other people getting $0.