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Comment by apeace | Hacker News Reader

Is it worth considering whether increased/extended unemployment benefits are a factor in the employee shortage?

The article mentions employees on "furlough" who are "biding their time". I'm not from the UK, but this appears to mean the government is paying much of their wage while they are not working.

Anecdotally (in the U.S.) I know several people who have remained on unemployment as long as they possibly can, despite the fact that their job would've hired them back by now. Technically this is breaking the rules of unemployment benefits, but there are several easy ways around it.

Not that the increased/extended unemployment benefits have been a bad thing. They were quite necessary, especially early on in the pandemic when there was so much uncertainty. Perhaps they're still necessary. But it seems to me that if you allow people not to work and still have money, many people simply won't work. Mystery solved.

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If labor is a market, laborers are at a fundamental disadvantage compared to employers when it comes to clearance: the employer has an asymmetric advantage in its ability to wait to hire someone; laborers are a lot less capable.

I don’t know that unemployment is a good solution, but I think it speaks volumes that people might be using it to balance the standard inequity.

Can you explain this further? It sounds like you may be assuming employers are able to simply not hire and bear the opportunity cost. How are you weighing that up against employee urgency?

Not GP, but forgoing opportunity does not carry the same urgency as forgoing food, utilities, and housing.

Both are important. One is urgent.

Employers need employees, and employees need employers. If you have orders to fill, and noone to do the work, you're just as fscked, as if you have bills to pay, and no money to do it. Employers get an added benefit of being able to wait it out a bit, since they generally have more money than workers, and workers have unemployment benefits, which means that they can wait it out (until the benefits stop).

The problems will be more apparent when the benefits stop, poorer employers will close down in the meantime, and when people have to go back to work, there will be fewer workplaces for them available, bringing the wages down.

assuming the demand is still there, other employers will take up the slack and potentially be in a position to hire the employees.

that's only partially true, as a company you have infinitely more leverage in society than an individual

you weigh more, you're worth more, it doesn't last forever but the difference is staggering

You also have product to sell/deliver, and no unemployment benefits.

Many, many businesses have failed during the current plague situation... maybe not amazon and walmart, but a lot of small and middle sized businesses.

yes but depending on the state / size of your company, you can reallocate people in emergency mode, work more yourself (if you're the boss), ask for loans at the bank, you can absorb a lot more than a single individual can

The business owner can close up and file for unemployment if that pays more than they’d make paying prevailing wages.

> Employers need employees, and employees need employers. If you have orders to fill, and noone to do the work, you're just as fscked, as if you have bills to pay, and no money to do it.

Na, not really. An employer can just raise their prices until incoming orders and delivery capacity align. That’s a sustainable situation for the employer. There may be some opportunity cost, but they’re doing okay.

An employee on the dole on the other hand is not in a sustainable situation. They have to find a job before they run out of benefits and savings, or the consequences will be dire…

https://twitter.com/DevitaDavison/status/1391415254710632448

Yeah, good luck raising prices prices.

> An employer can just raise their prices until incoming orders and delivery capacity align. That’s a sustainable situation for the employer.

In practice, this will reduce incoming orders so much that the total profits from them won't be enough to cover the company's fixed costs anymore.

Only in monopolistic situations or situations causing everyone to raise prices at the same time would the possibility of "just raise their prices" be workable.

If the price gets too high people will seek alternate suppliers or do without.

Example: We pay a private company to haul trash to the dump. There's many such companies, so if my company raises it's prices, I'll switch to another. We had one company raise its prices recently and everyone switched to another. I'm not sure this company is still around.

Example: Comcast kept raising my cable TV bill. I eventually just ditched it and went Internet only. $200/month for TV isn't worth it.

> If the price gets too high people will seek alternate suppliers or do without.

That’s exactly the desired effect. I didn’t say raise prices to make more money. I said raise prices until incoming orders and delivery capacity align. The purpose is to get less orders.

This is a common refrain, but I doubt many who say have actually actual experience as an employer. In many businesses the inability to staff leads to existential threat to the entire business.

If you're a restaurant and can't seat customers or a SaaS startup and can't keep your service uptime, you'll go out of business very quickly. That represents millions in enterprise value. In contrast an employer who gets fired, but is otherwise competent, might be looking at a few weeks of unemployment and a couple thousand in lost income.

If the business is run sensibly and isn't hemorrhaging a large percentage of its workers, not hiring just means delayed growth, not an existential threat.

Governmental meddling since last March has caused a lot of businesses to hemorrhage a large percentage of their workers even though they were run sensibly.

A business has no right to exist.

If you want staff, pay the rate or close.

Or automate/improve your processes.

We need businesses in an economy, not any particular business.

I have seen many employers who look for unicorns rather than using optimal stopping (https://en.m.wikipedia.org/wiki/Optimal_stopping) for positions that are more flywheel multiplier positions rather than existential positions.

In the long term, it rarely leads to the death of their business, but it substantially lowers the quality of life of most/all of those working in the business.

People who are furloughed are still employed. They are not contributing to these statistics.

Pretty much.

I was sceptical of that they did in Aus but it sort of worked.

Instead of just giving everyone unemployment they,

Doubled unemployment for those that needed it

Created a new system that injected money into businesses, but only if they kept you employed, i.e. subsidized wages.

This let things snap back really quickly. Though there is still a lot of damage and the new lock down in Sydney is hurting without the same measures again.

The thing were finding is those that left jobs are just hard to get back into jobs, it takes time to hire negotiate and train people

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