Companies struggling to fill jobs 'should try paying more,' Fed's Kashkari says
Two thoughts:1) I've been saying this for years, but nobody wants to hear it. In particular, an oft-repeated maxim from the immigration debate is “these are jobs Americans will not do!”. This statement is plainly and obviously false. Most Americans will not do these jobs FOR THE WAGE YOU ARE WILLING TO PAY.Picking tomatoes is backbreaking soul-killing work. I won't do it for minimum wage. I will do it for $10,000/hr. Somewhere between these extremes is the optimal wage (from the employer's point of view) which will attract a field full of pickers. Perhaps that wage is $100/hr. Now, I hear the grower growling “$100/hr is not a reasonable wage for a tomato picker”. To which I reply, “define ‘reasonable’ ”. Is it not a tenet of Republican free-market orthodoxy that the fair value of a commodity is that which is determined by market forces? Why is this orthodoxy so quickly extinguished when applied to wages, and especially when its application argues for better wages for low-status people?2) I've referred to products and labor as commodities with prices set by market forces. However, I caution against viewing the employer-employee relationship as being exactly analogous with the manufacturer-customer relationship. Both business and labor make money by selling something -- the manufacturer sells his goods to a customer; the laborer sells her labor to an employer. But the two are very different in one regard: companies (mostly) have a multitude of customers, while a worker generally has ONE customer: her employer.Most companies strive to avoid overreliance on a single customer. They diversify their offerings and try to establish a large customer base. The IT company selling its software to Walmart, and only Walmart, is surely aware of the inherent peril.Laborers can't do this. An employee is selling his time; he cannot slice his day into 5-minute segments and sell each 5-minute labor period to a different buyer. He may even be contractually constrained from trying this (“no moonlighting”).A laborer selling her time is not really in the same boat as a producer selling a product. [There are exceptions, generally to the benefit of the laborer. For example, self-employed physicians and lawyers really do have many customers who purchase small segments of their time].