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Policy: Labor

When they say ‘labor shortage,’ do they just mean ‘we wish wages were lower’?

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Politics,Beltway Confidential,Timothy P. Carney,Labor

Most of the muscle for the push to liberalize our immigration laws comes from businesses seeking more skilled technology workers. They say there’s a shortage of workers trained in science, technology, engineering and math (STEM as they call it).

This argument has currency among politicians and businessmen: Here’s congressman Richard Hanna making that same point.

But tell an economist there’s a “shortage” of something, and she might ask just what you mean. In most cases, “shortage” doesn’t mean anything more than “this thing is scarcer, and thus more expensive, than the speaker wishes it was.”

As evidence of a “farm labor shortage,” for instance, one farm lobbyist cried: “We’ve got neighbors literally competing against each other just to have enough of a workforce to harvest their crops.”

My brother John responded aptly: “Heaven forefend! Neighbors ‘literally competing against each other.’ It’s practically a civil war.”

“Farm labor shortage” really means the farmers have to pay more for labor than they expected or wanted to. It may even mean that some crops become uneconomical to pick. But making uneconomical production become economical doesn’t seem like a valid aim of government policy.

Of course, in highly skilled areas, you could imagine an actual shortage. If I want a baseball pitcher who can throw 98 miles an hour on the corner of the strike zone, who also has a good second and third pitch — well, I might just be out of luck. Maybe there’s one such guy in the world.

But what if I want someone with an engineering degree? Well, one study by a liberal group suggests they exist, and they’re still looking for job. The Washington Post reports the highlight:

According to the study, they have a surprisingly hard time finding work. Only half of the students graduating from college with a STEM degree are hired into a STEM job, the study said.

“Even in engineering,” the authors said, “U.S. colleges have historically produced about 50 percent more graduates than are hired into engineering jobs each year.”

So, sure high-tech employers would like there to be more high-tech workers. I would like there to be more computers as good as the MacBook Air — because greater supply would mean lower price. I just haven’t hired a lobbyist to push federal policy to boost the supply of high-end laptops.

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