Wednesday, December 13, 2017

The Eternal Question

Dean Baker is at it again, saying that the claims of employers that there is a shortage of skilled workers is nonsense because, “there are always workers with the necessary skills — they just might work for competitors or in another city,” and that all an employer needs to do is offer higher wages in order to lure those workers away from those competitors and other cities.

He offers no evidence for his statement, of course, let alone proof, but we'll let that go and proceed with our argument based on the accuracy of his unsupported allegation, unlikely as it may be.

So if you have an shortage of gas in the form of a 20-gallon tank with only 10 gallons in it and I have a full 20-gallon gas tank, all we have to do is siphon half of the gas from my tank to yours and the gasoline shortage is over, right? Because you now have 20 gallons of gas and I have…

Oh wait, something went wrong. There’s still the same shortage of gasoline, but it’s just in a different place. I now have it instead of you.

Only an economist would come up with the utterly stupid idea that you solve a shortage by moving that which is in short supply from one user to another. Which raises the eternal question. Do only idiots become economists, or does becoming an economist cause normal people to turn into idiots?

1 comment:

bruce said...

not to mention you will lose those new highly paid employees because your business will suffer because they will make you raise your costs, internally and externally.

But thiose higher wages will trickle into the economy and a rising tide lifts all boats, etc etc. Right.

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