Much has been made of the sudden labor shortage facing the U.S. and the world. Editorials and analyses of what happened are appearing almost daily in the media, popular and barely-noticed blog posts, and other websites across the internet. How could this “suddenly” happen?
Well, it didn’t “suddenly” happen. It has been developing for some time. Not only is the labor shortage not sudden and accidental, but it is also quite the opposite. It was planned and deliberate.
For 21s months, due mainly to Fascist policies associated with China-virus-phobia and lockdowns, the U.S. has experienced various types and magnitudes of labor deficiencies. In short, the quantity of labor demanded by would-be employers has exceeded quantities supplied by would-be employees, especially in the service sector.
The reality is, joblessness has been both mandated ― through shutdowns of “nonessential” businesses ― and subsidized with lucrative and extended “jobless benefits.” Those two policies make it difficult for many businesses to attract and hire labor of sufficient quantity, quality, reliability, and affordability.
People usually complain about shortages, especially if they are persistent and prove harmful to them as buyers of necessities like food, gas, or housing. Yet few people today, except for business owners hindered by a lack of qualified labor, complain about the labor shortages. Indeed, many people, being labor suppliers who disdain the greed of profit-oriented labor hirers, like the shortage.
They prefer that their labor not be a necessity, so they aren’t beholden to “the man” (aka, the “capitalist exploiter”). They prefer more leisure ― who doesn’t? That is especially true when politicians pay them to engage in it, which is precisely why the totally unnecessary supplemental unemployment benefit was created last year.
The point of state-based unemployment insurance benefits is that they ensure unemployment. Hundreds of thousands of American businesses that have survived the year and a half of China-virus-based policy assaults are having a difficult time finding and keeping good, reliable, and affordable labor. Much of this labor pool ― especially in the service industry ― has become a stagnant swamp. In the 21 or so states still offering the supplement, millions of people prefer to stay home and take a government subsidy.
Our chart below illustrates the extent of the current labor shortage in the U.S. Notice how job vacancies far exceed the number of unemployed workers ― and the gap has widened over the past 21 months. Worse, the long-term unemployed have become a larger share of the total unemployed. Vacancies stand at nearly 200 (20.5 million, even amid high joblessness (13.7 million). The gap between vacancies and the number of people living idly in long-term joblessness (seven months or longer) is also the widest on record. The chart also shows employment costs rising, which ultimately dampens profitability.
The unemployed depicted in the chart are not those who’ve dropped out of the labor force but those who claim, while applying for and renewing their jobless benefits and supplements, that they’re looking for work but somehow can’t find it.
How can they not find it, when job vacancies are at record highs? In truth, they can’t find a job that pays more than they believe they’re worth to some employer and they won’t bother taking even a slightly lesser paying job. That is the fault of the above-normal jobless benefits they receive, from CCP virus bailout spending and federal largess. This supplements what those 21 states pay in jobless benefits. Even though a majority of states are now decreasing or terminating jobless benefits, they are still being paid in states with ports of entry and truck terminals originating imported freight for nationwide shipment.
Basic economics teaches that when markets are left free, they “clear,” which means prices help balance supply and demand. Neither surpluses nor shortages become material or chronic, for surpluses entail quantities supplied exceeding quantities demanded while shortages entail the reverse. Sellers facing surpluses and preferring sales and profits to excessive inventories will gladly reduce their stocks by lowering prices. Likewise, buyers who face shortages and prefer to obtain more products than not willingly pay higher prices.
It is not that the Biden cabal doesn’t know this to be fact. Instead, they are trying deliberately to overturn the process. Material or chronic surpluses and shortages reflect not “market failure” but the failure of governments to let markets clear. It is believed that “fairness” requires that certain prices be higher or lower than the equilibrium level.
Politicians proceed to tax, regulate, price-set, and subsidize. In democracies, where majorities dominate, electorally astute, vote-greedy politicians necessarily favor the larger population of employees versus employers ― except to the extent they peddle their influence, via rent-selling, to extort campaign contributions from the latter. Instead of being seen for what they are ― labor market manipulators ― far-Left politicians can pose as benefactors aiding that quintessential economic contradiction, the non-working worker.
As Paul Krugman put it in “Workers Don’t Want Their Old Jobs on the Old Terms,” the labor force welcomes the Fascist politicized, non-economic policies that use taxpayer funds to pay the voluntarily jobless to hold out for higher wage rates than they’d otherwise deserve or obtain from the perspective of marginal productivity.
For Krugman and his acolytes, this is better even than a minimum wage mandate ― which Krugman also supports. It doesn’t require employers to pay the above-market wage rate. They’re not as yet compelled to hire overpriced labor. Instead, they can use more capital, as occurs at banks, gas stations, toll booths, airline check-in counters, fast-food restaurants with automated tellers, toll takers, and kiosks.
Daniel Alpert, senior fellow in macroeconomics and finance at Cornell Law School, concurs with Krugman and declares that “Americans Don’t Want to Return to Low Wage Jobs.” Alpert blithely assumes that all wage rates have been, to this point, “too low” and will be until and unless the government intervenes forcibly to rectify the “market failure.” He fails to explain how low-wage jobs to less-skilled labor accomplishes the goal of increased wages.
Alpert also does not acknowledge that the problem is best rectified by introducing still more and higher-quality capital (“labor-saving devices”), not by boosting “jobless benefits” or by imposing a still-higher minimum wage rate which rational, profit-maximizing employers shouldn’t bother to pay.
Labor market “experts” have recently confirmed and fueled such anti-employer biases. A recent New York Times Op-Ed by MIT economics professor David Autor was titled: “Good News: There’s a Labor Shortage.” That was the online title. The print edition was titled “The Labor Shortage Has Empowered Workers.” This assumes workers lack bargaining power under normal conditions, as when markets “clear,” supply equals demand.
How can professional economists believe such nonsense? Why applaud market disequilibrium? Autor, a co-director of “the MIT Task Force on the Work of the Future,” has spent years reprising the undue fears of early 18th-century British economist David Ricardo (1772-1823) ― a devotee of the socialist “labor theory of value” (LTV) that decries machines displacing physical labor. Fear of all fears!
Barack Obama, in his last major address as president in January 2017, echoed Autor’s and Ricardo’s themes. He claimed that automation was harmful and divisive because skilled workers who can operate technology are better paid.
Well, of course they’re better paid! They have a skill not everyone has. Echoing the fears of many, President Obama suggested that this may justify slowing and impeding capital formation and deployment. But that favors the cronies no one dares mention: Unskilled laborers perpetually on the public dole. Autor, Obama, Biden, and countless others are more concerned with achieving “equity” ― the same level of wealth for everyone― rather than individual prosperity achieved through personal ambition.
By now it should be obvious, especially to experts and politicians alike, that more and better capital increases labor productivity, real wages, and living standards. It also should be clear by now that capital isn’t the alienating or impoverishing force the Fascists make it out to be.
It is a frozen form of human labor – labor embodied by brainiacs, inventors, engineers, and entrepreneurs. Capital isn’t “dead labor,” but vital, perpetual-motion labor, powered by energy and kept vibrant by maintenance and upgrades. Capital and profit aren’t “blood-sucking” parasitism, but the lifeblood of a dynamic and flourishing capitalist economy.
Why is so much of this unclear even to people who should know better? In reality, it’s not. It is not that they don’t know basic economics, the meaning of equilibrium, or the problem of shortages. They are clearly, unambiguously, and ideologically anti-capitalist. That makes them derivatively anti-employer, because they can’t deny that most employers are capitalists at least financially, if not always ideologically.
Channeling Marx and Hitler, those suspicious of employers today believe capitalists profit by underpaying workers what they’re “really worth” and by charging customers more than what’s proper per the unicorn model in academic economics known as “pure and perfect competition.”
The many economists who emulate Marx today ― which amounts to a frightening number of them ― remain convinced that wage rates in a capitalist system are determined not by someone’s net contribution to the total market value of goods and services created by commercially viable enterprise ― i.e., by their marginal productivity.
Instead, they see it arbitrarily, that employers pay whatever they wish ― including bare-bones “subsistence wages” ― and by policies that sustain a vast “reserve army of the unemployed” that’s easily exploited. They claim the evil corporations, from mom and pop businesses to Apple and Google, do that because starving workers are eager to accept any job on any terms. The “army” metaphor reflects the Marxist premise and Fascist practice that workers are conscripted and regimented in a hierarchy under the thumb of capitalists.
Short of revolution ― an overthrow of capitalism itself ― “democratic socialists” seek first not to prevent widespread joblessness, but to ensure that joblessness exists ― especially among the less skilled, where it didn’t previously exist at all ― namely, in a freer, non-emergency setting (see 2019).
Next, they seek to make taxpayers ― which, in their “progressive” tax code of graduated rates, means mostly the rich and corporations ― pay the jobless not to work. They believe capitalists will be induced or compelled to “do the right thing” and finally raise wage rates. A “reserve army of the unemployed” still exists in this model, but is kept “off the market” by the equivalent of a public bribe ― currently through the supplemental unemployment benefit. Thus, the jobless are “liberated” from “greedy capitalists” but come to depend on idealistic Fascists in the government.
Socialists of any stripe believe that laborers are exploited by capitalists, so they fight to make economies enslaving. Their goal is to “turn the tables” and “expropriate the expropriators,” to ensure that capitalists (employers) are exploited by laborers (employees). Fascist socialists accuse capitalists of paying labor next to nothing for doing something great, but their “solution” is to force taxpayers to pay greatly for labor that does nothing at all.
These themes illuminate the aims of the Biden administration and its allied Fascists in the U.S. Congress and government bureaucracy. All seek to spend an additional $3 trillion to $5 trillion over the coming decade on so-called “human infrastructure.” — on top of their already reckless and wasteful spending over the past 18 months. This entails spending on labor that doesn’t work (jobless benefits, family leave, etc.), on public schooling that doesn’t educate (except to corrupt and erode human capital), and on energy that doesn’t produce (more costly, less reliable “renewables”).
The goal is to have as many American citizens and non-citizens alike dependent on government handouts for as long as possible, dependent on politicians directly and taxpayers indirectly. It’s a deliberate policy of subsidized parasitism. CCP virus “lockdowns” are the ideal policy for promoting this non-labor, anti-employer agenda. Lockdowns weren’t necessary to curb the spread of the virus, they caused more harm than good. Yet millions of people today are still compelled or induced by irrational policies to stay home, shutter businesses, and take jobless subsidies.
Today’s U.S. labor shortage is both uneconomic and unnecessary, yet nonetheless what appears to be a deliberate policy aim of Biden Fascists. Sadly, the same can be said about a wide range of other anti-capitalist policies being advanced by the secretive Biden cabal attempting to overthrow the Constitution, destroy capitalism, and bring down the U.S. democratic republic.
Mike Nichols is an advocate of the counterrevolution with a four-step plan to defeat Fascism: We organize, we stand, we resist, we fight. He has a regular blog at America’s Conservative Voice on Substack and a Facebook presence at Americas Conservative Voice-Facebook.