While Friedman favorably quotes Emanual describing this as, "staring right into the whites of the eyes of the skills shortage," the most obvious shortage of skills in this story is with the CEOs. Competent CEOs know that in a market economy you attract good workers by offering higher wages.
This is known as the principle of "supply and demand." If the demand exceeds the supply, then the price of the item in question is supposed to rise. In this case the item in question is labor. If these companies were run by competent CEOs then they would be offering higher wages in order to attract the workers that they say they need. If they offered high enough wages people would leave competitors to work for their companies. They would also move from other parts of the country or even other countries to accept their job offers. In the long-run more people would train to get the skills needed to fill the positions these employers are offering.
Monday, October 17, 2011
FLG agrees with Dean Baker:
Posted by FLG at 1:20 PM