Thread: The Great Labor Shortage Lie

The Great Labor Shortage Lie
David Sirota
April 11, 2007


David Sirota is the co-chair of the Progressive States Network, a research and advocacy organization that supports state lawmakers. He is also the author of Hostile Takeover: How Big Money and Corruption Conquered Our Government—And How We Take It Back.

I've said many times before that the best place for information is the business press. The material is written for people who need cold, hard information in order to make money, rather than for the professional political pontificators who are aroused by Beltway spin. The only challenge when reading the business press is to get through the corporate PR. But if you have the patience, you will find out what's really going on and who is lying to you. This week's piece in Business Week on the job market is a good example.

The article begins with a sensationalist headline that only Bill Gates and Tom Friedman could love: "Where Are All The Workers? Companies worldwide are suddenly scrambling to manage a labor crunch." This is the public rationale from corporate executives (especially in the high-tech industries) for massive job outsourcing and exploitation of the H-1B program: We can't find the workers we need.

We are expected, for instance, to ignore academic studies published recently by the National Academy of Sciences showing that, in fact, there is no shortage of high-tech engineers here in America. We are expected to ignore the data showing that companies are using the H-1B program to drive down domestic workers' wages by forcing them into competition with imported workers from impoverished countries. We are expected, in short, to believe that layoffs, wage stagnation and pension/health care cutbacks have absolutely nothing to do with corporate executives trying to line their own pockets, and everything to do with workers themselves—and we are expected to believe all this at the very same time new government data shows that the share of national income going to wages is at a record low, and the share going to corporate profits is at a record high.

Yet, a few paragraphs into the Business Week article, the real story starts to trickle out:

A global labor crunch, already being felt by some employers, appears to have intensified in recent months. That's in spite of widely publicized layoffs, including Citigroup's plans to shed as many as 15,000 staffers ... Corporations are determined to keep labor costs under control, so they're reaching deeper into their bag of tricks ... Some are lowering their standards for new hires or moving operations to virgin territories other outsourcers haven't discovered ... Economists, of course, will tell you there's no such thing as a labor shortage. From a worker's viewpoint, many so-called shortages could quickly be solved if employers were to offer more money. And worldwide, millions of people still can't find jobs. The strongest evidence that there's no general shortage today is that overall worker pay has barely outpaced inflation.

There, finally, is the real story—the story that corporate executives and staid political pundits don't want anyone to talk about: The Great Labor Shortage Lie (related, of course, to the Great Education Myth—the one I've debunked before that claims all of working America's problems are due to a bad education system, and that if we just fixed our education system, everything would be great for workers). There's no labor shortage—there's a cheap labor shortage, because, as the free market fundamentalists all love to say, supply and demand rules everything. And if that's the case—then there's no way you can have a real labor supply shortage at the very same time wages (the monetized manifestation of employer demand for labor) continue to stagnate.

Not surprisingly, politicians will do anything to distract attention from these basic facts. You can best see this in in the immigration debate. You may recall that many of the most corrupt politicians in Washington, like John McCain, continue to say that illegal immigrant laborers are taking jobs that Americans "don't want to do." Regardless of how you feel about the very complex issues surrounding the immigration debate, this specific mantra is dishonest at best. When McCain was confronted by workers who said those jobs would be filled by legal domestic workers if employers decided to "pay a decent wage," he made the laughable claim that legal domestic workers wouldn't do farm labor for $50 an hour—prompting an eruption of boos.

The reason Big Business groups like the Chamber of Commerce support illegal immigration is because large employers want a pool of desperate workers to either employ at slave wages or to use as a threat to leverage wage concessions out of domestic workers. Put another way, the Big Money interests want to preserve a tool to rig the labor market so as to make sure its natural supply-and-demand dynamics are never allowed to work to raise wages here at home. And politicians like McCain—whose campaigns are funded by these same Big Money interests—will do anything to help them.

These politicians, of course, couch their bought-off immigration positions in humane terms—pretending that they care about the plight of impoverished Mexicans. Yet, most of these same politicians aggressively supported NAFTA, which deliberately drove 19 million Mexicans into poverty . Even more to the point: Advocating for so-called "guest worker" programs that provide a legal framework for American employers to exploit Mexican workers without giving those Mexican workers basic labor/human rights afforded to domestic workers is simply not a humane position either for Mexicans or Americans—it's a position that creates a 21st Century brand of inhumane economic slavery for Mexicans, and embraces the ongoing efforts to drive American wages into the ground.

So the next time you flip on cable TV and see a pinstriped executive bemoaning labor shortages or a craven right-wing politician portraying bought-off positions on economic issues as the channeling of Cesar Chavez's agenda, just remember: The real facts about the Great Labor Shortage Lie are right there for everyone to see, buried in the business press.



http://www.tompaine.com/articles/2007/0 ... ge_lie.php

When McCain was confronted by workers who said those jobs would be filled by legal domestic workers if employers decided to "pay a decent wage," he made the laughable claim that legal domestic workers wouldn't do farm labor for $50 an hour—prompting an eruption of boos

When I was in high school those jobs (in CT) were done by teenagers, not illegals and they did NOT go unfilled and paid decent. If illegals would march and tell fellow Mexicans not to cross the border for one year, and employers were forced to pay better to get and keep workers (what is the average sign on bonus to get and keep RNs, LPNs and CNAs since there is a shortage?) our economy wouldn't fall apart. We just can't do those jobs for minimum wage and be able to afford a place to live. Most Americans just don't live in a 2 bedroom place with 10 other people to be able to afford to work for so little and shouldn't have to.

Welcome Steph!

You are correct. Contrary to the MSM and pro illegal claims, the economy will not fall. It will adjust just as it has always done. The crap they spew is pure bogus as we all know.
I have three teenagers who have continually applied to fast food jobs, landscaping, and other jobs supposidly "Americans won't do." and all three of my teens have had a hell of a time getting jobs at all because of the illegal competition.
We have the joke in our house that if you simply put down 'illegal alien' in the box which asks for your race, (seeing as how the MSM, liberals, and pro illegal groups now consider illegals a race) you're guaranteed to get the job.

Originally Posted by Shadow

The strongest evidence that there's no general shortage today is that overall worker pay has barely outpaced inflation.

Dobbs adressed this in his book, War on the Middle Class. He said if there were a labor shortage, we would see employer provided health care stable, and middle-class wages increasing, not remaining stagnent. I love how they try to tell us that their is a labor shortage in IT.....Is that why computer programmers have a 9% unemployment rate?

We have no labor shortage. We have a shortage of CEOs who care about their stakeholders--the American people. and CEOs who have ridiculous compensation and retirement packages. And too many tax-payer funded contracts, bail-outs, and subsidies while they simultaniously move their operations over-seas to get out of paying taxes themselves and paying descent wages to Americans. And a federal government that does nothing but support this, because they are bought by lobbies representing said CEOs.