the myth of the "skills gap"

Yes, but in the past when employers actually trained their workers they seemed to manage well. What has changed since that time?

One factor may have been the destruction of unions. Part of all those union dues went towards subsidising on the job training. The employers had to pay more, but these costs were going towards providing real training to new workers in that industry. Another factor may be that the notion of company loyalty has all but dissappeared. It used to be common for an employee to stay with the same company all his life, and this was reinforced by seniority in handing out pay raises and promotions. Naturally this would make some sense. If the employer has already invested resources in training a worker (who has been accumulating experience), that worker becomes worth more to the company.

 

Why do you think the labour demand is upward sloping?

 

Think you've repeated it too many times, labor demand curves slope downward, where MRP falls as the quantity of workers rise.

 

ROTFL - you keep just repeating a question and refuse to answer mine.

 

What a pathetic dodge. All of your questions have been answered. You just haven't understood the answers because you don't understand supply and demand. Now we know that MPPL is behind the downward sloping labour demand curve. Given that, what stupidity do you think is behind the slope of the curve? Note that any valid answer will necessarily advertise the ignorance of your original comment (and why I will assume you will continue to dodge)

 

No, I am asking the mechanism behind the downward sloping curve. That will determine magnitude.

A 10% increase in company profits is significant, but based on a 30% net profit, that is only 3% of total sales (about 2% of wages, based on wages being 70% of cost). Do you think those out of work are stopped by a 2% shortfall?

 

Are you telling me you don't understand why the labour demand curve is downward sloping? Don't dodge any more as its tedious

An exercise in futility. The decision, if you buy the supply and demand approach, is simply MRPL=MCL. Profit maximisation achieved!

 

More vague school book crap. How much can wages be raised? I'll even settle for an order of magnitude - 1%, 10%, 100%?

 

I've already told you how they can be raised: because labour demand curves are downward sloping, given the nature of MPPL. Now answer the question: Why do you think labour demand is downward sloping? I'm not going to let you off the hook

 

You have answered nothing because you can't.

You provide crap dodges and then demand I answer your question. Silly boy.

 

Why is the labour demand downward sloping?

 

In all cases? Enough to resolve the wage arguement the OP states?

 

But why is the fellow so insistent on ignoring that reality? Why hasn't he accepted he made a pathetic error? Even a school kid knows the difference between a movement and a shift in the labour demand

 

Yes, generally, because of the law of diminishing returns.

SparkNotes actually has a decent resource on the topic: http://www.sparknotes.com/economics/micro/labormarkets/labordemand/section1.html

Dissonance and really no attempt to make it easier to understand. Not to mention when you sling around words like pathetic it makes it even less likely someone will admit to have erred.

 

I'm but honest. It was a pathetic error. You may want to sugar-coat it but that doesn't interest me. You're still only a gnat's (*)(*)(*)(*) away from the fake libertarians after all

 

People in glass houses...

 

A typing error? Crikey, you're more dull than usual today. Put on a Hawaii shirt and see if it helps

 

The OP says employers are holding unemployment high because they won't pay the going rate. Reiver says wages can be increased, but refuses to justify that statement with anything but acronyms. The downward sloping labor demand curve pushes wages lower, at best to remain the same, not higher.

As far as "generally". I see business situations where adding people can increase profits, reduce profits, or keep them the same.

 

Yup, that's why I said generally. The labor market is far more complex than something you'll be able to plot on a graph.

The OP was absurd, as I said much earlier in the thread the largest gap in employment has to do with education not some mythical "skill gap".

 

You again show you don't understand supply and demand. The supply shock shifts the supply curve leftwards and that ensures a movement up the labour demand curve. End result? The supply change has led to a higher wage and lower equilibrium employment.

The only complexity is whether firms adopt the supply and deamnd approach to profit maximisation. The existence of internal labour markets and efficiency wages suggest its only of marginal concern. This reflects the unique nature of labour, where firm organisation isn't structured according to profit maximisation (I.e. MC=MC) but according to economic rent creation criteria. Go ahead and support that approach!

 

I think that's what the OP and maybe the writer of the article want to read into their information. However that position is based on an underlying assumption that college degrees are fungible, which is ridiculous.

As shown in the sources I linked earlier, majors in high demand have very low unemployment rates, even for new grads and generally their wages are indeed high. However there was an idea for a while that kids should just study what they want in college and parents and/or loan offices should support that. And I guess that's OK if you know what you're getting into, but that sort of planning is coming home to roost...specifically in the student's parent's basement.

I think we actually agree, except that the "skill gap" is largely a question of education. But that might be semantics.

I agree that part of the issue is a lack of any concept of company loyalty (and a lack of stability such that even the company is confident of it's existing long enough to see a return on training investments).

But in part I think that nature of jobs has changed. What you're talking about works well for the trades. However our politicians (Democrat and Republican) and unions themselves have been indirectly working to make it very hard to run a manufacturing business in the US, and so they make up a relatively small slice of employment.

On the job training from a HS diploma to the equivalent of a four year degree is much less straightforward than working and training your way up the roughneck ranks.

 

Eh, education has more to do with certification than education.

 

Given the strong screening hypothesis is rejected, you're going for tabloidism again?

 

Is it? Evidence?

My reply was based on my anecdotal experience and the fact that many skills are specific to the job, something school couldn't and shouldn't be teaching.

 

Yep, tabloidism! The evidence cannot reject the weak screening hypothesis (e.g. randomly chosen: Brown and Sessions, 1999, Economics of Education Review, 18, pp. 397-404), but that cannot be used to justify your remark