I notice the non-mention of the elephant in the room: state unemployment agencies, as encouraged by federal relief bills, which are putting in their own, increasingly high bids (of our money) for workers to remain idle. The marketplace does not deserve the blame for having to outbid them.
I fully agree with you (except for the reference to Krugman as a skeptic; I'd use some other adjective). I regret that you don't want to look at the other half of Economics, I mean Macroeconomics. You have written about it a lot and for a long time, but this time you prefer to look at the microeconomics of labor (meaning that you acknowledge many types of labor, and you are focusing only on each type separately). Yes, sometimes politicians are interested in one or a few types of labor, but they are always interested in "aggregate" labor because all their voters demand income, either from their own labor or from other people's labor (for this purpose just defined wealth as the accumulation of savings from past labor). Politicians will never like the "market" distribution of income because they know that people are different and therefore their behavior and outcomes are different (I appreciate you don't waste time arguing for equality), so they will always intervene to change it and the only relevant question is who benefits from political redistribution (in addition to politicians and their armies of servants). You cannot get any serious understanding of how "markets" and politicians attempt to satisfy the population's demands for income by studying Macroeconomics, and of how they adjust their behaviors over time.
Note: Years ago, John Cochrane argued that Macroeconomics was about how income was spent --either today (consumption) or tomorrow (saving)-- from which it followed that the relevant price was the interest rate. Much earlier, Alvin Hansen and other Keynesian macroeconomists focused on how labor was used or wasted. Today, however, politicians' concern about schemes to provide income to everybody reminds us how little they care about work and saving.
Is there a PSST counterargument here? That maybe, at least for some sectors, given current distribution of policy and of skills, the equilibrium wage from a labor market perspective is higher than what's viable from a competitive production perspective?
Supply: Various government inducements to refrain from work (the number and scope of which increased in the past year-plus) cause some workers, at the margin, to withhold their labor. Demand: Businesses can't earn a sustainable ROI by offering higher wages. Result: An increase in job openings at wage rates that are profitable for companies.
It's true that there is no "labor shortage" if one accepts the point of view of economists. But real people who understand and agree with the first paragraph of this comment will nevertheless refer, justifiably to a labor shortage -- a government-induce labor shortage at that.
I notice the non-mention of the elephant in the room: state unemployment agencies, as encouraged by federal relief bills, which are putting in their own, increasingly high bids (of our money) for workers to remain idle. The marketplace does not deserve the blame for having to outbid them.
I fully agree with you (except for the reference to Krugman as a skeptic; I'd use some other adjective). I regret that you don't want to look at the other half of Economics, I mean Macroeconomics. You have written about it a lot and for a long time, but this time you prefer to look at the microeconomics of labor (meaning that you acknowledge many types of labor, and you are focusing only on each type separately). Yes, sometimes politicians are interested in one or a few types of labor, but they are always interested in "aggregate" labor because all their voters demand income, either from their own labor or from other people's labor (for this purpose just defined wealth as the accumulation of savings from past labor). Politicians will never like the "market" distribution of income because they know that people are different and therefore their behavior and outcomes are different (I appreciate you don't waste time arguing for equality), so they will always intervene to change it and the only relevant question is who benefits from political redistribution (in addition to politicians and their armies of servants). You cannot get any serious understanding of how "markets" and politicians attempt to satisfy the population's demands for income by studying Macroeconomics, and of how they adjust their behaviors over time.
Note: Years ago, John Cochrane argued that Macroeconomics was about how income was spent --either today (consumption) or tomorrow (saving)-- from which it followed that the relevant price was the interest rate. Much earlier, Alvin Hansen and other Keynesian macroeconomists focused on how labor was used or wasted. Today, however, politicians' concern about schemes to provide income to everybody reminds us how little they care about work and saving.
Is there a PSST counterargument here? That maybe, at least for some sectors, given current distribution of policy and of skills, the equilibrium wage from a labor market perspective is higher than what's viable from a competitive production perspective?
Supply: Various government inducements to refrain from work (the number and scope of which increased in the past year-plus) cause some workers, at the margin, to withhold their labor. Demand: Businesses can't earn a sustainable ROI by offering higher wages. Result: An increase in job openings at wage rates that are profitable for companies.
It's true that there is no "labor shortage" if one accepts the point of view of economists. But real people who understand and agree with the first paragraph of this comment will nevertheless refer, justifiably to a labor shortage -- a government-induce labor shortage at that.