The recent article in the Wall Street Journal was concerning severe shortage of labor and how companies have tried different tactics. How can labor shortage and stable wages coexist? According to one well-known labor economist, ‘What were seeing is the legacy of last economic recession and the ongoing pressure of foreign competition. Many companies have chosen to ignore issues of labor supply and demand for fear that higher labor costs will make it more difficult to compete.’
He goes on to say that a number of companies decided to operate shorthanded or institute mandatory overtime rather than raise wages with the hope that the labor shortage would prove to be temporary. It reminded us of our ill suited former CEO
Jay H Walder who applied this tactic however it failed miserably. He had no moral fortitude to stand up and take the blame but cut jobs and ran away to Hong Kong - that revealed his moral fiber and upbringing.
The article notes however that gradually the pressure of excess demand was beginning to show up in craftsmen wages. The Laureno Lumber and Mill Company for example couldn’t get anyone to answer the moderate wage that it advertised. The article states the pressure to raise wages affects smaller companies because they typically pay less and thus in a labor shortage tend to lose their craftsmen to bigger employers with higher wages and fringe benefits.
If the shortage remains severe for a sufficiently long time these large employers also begin to experience high separation rates forcing them to consider boosting wages as well. We think now is the time TWU Local 100 membership are entitled to new contract with wage raise.
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