Yes; and deeper still, unsound money causing business uncertainty (can I afford to hire?), inflation (can I afford to change jobs?), and fake wealth (why work if the government is creating cash to pay me not to?).
It’s going to be difficult to reach a healthy equilibrium between labor and capital until money is fixed.
Fertility is below replacement level outside Africa. Due to demographics workers will be scarce. Covid and associated lockdowns also shrank the workforce.
For a singular job, yes this is true. Raising wages will convince workers to migrate from one job to another. The company that lost the employee can then also raise wages to lure employees back, taking them from other companies. And those companies can try to raise wages, and so on. This cycle still leaves vacancies.
At the level of the entire economy, raising wages cannot materialize more workers for every job opening.
A couple centuries back, the majority of the labor force was working agriculture jobs. Now that number is a tiny fraction of the workforce due to automation by machines. If we didn’t have automation, we would absolutely have a shortage of agriculture workers relative to all of the modern job openings. The same thing is happening today with the jobs being automated away as workers move to higher paid jobs.
This isn’t new or surprising. It’s been going on for centuries.
> There is no such thing as “scarce workers”. The problem is scarce salaries.
Well, yes, and the point is that workers are more scarce at any given salary than they used to be last year, or in the last decade, etc. At the same time, robots get more affordable. Isn't that the reason why employers want to automate as much as possible?
It's a question of how quickly the robot can pay for itself and provide a return on investment. Whichever tasks can be performed by robots will likely be automated.
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