It’s an all-too common refrain among US corporations: we have jobs available, but simply can’t find qualified workers to fill them.
Economists, including top Federal Reserve officials, lend credibility to this dubious claim by arguing there is a “skills gap” among US workers that is preventing firms from finding employees with the right backgrounds.
However, ample research and basic common sense suggests that wage stagnation, which has dominated the US job landscape in recent decades, is a symptom of an anemic labour market, not a fully recovered one.
Credit to Minneapolis Fed President Neel Kashkari for pointing that out during a speech to business leaders on Monday.
“If you’re not raising wages, then it just sounds like whining,” he told a group of business people at a Rotary Club meeting in Sioux Falls, S.D., according to the Washington Examiner.
The July jobs report released on Friday confirmed wage growth is meek at best. A
verage hourly earnings rose by 0.3% from a month earlier and 2.5% from the year before, a level that barely keeps up with even the subdued rises in consumer prices.
“Are any of you planning to raise wages in the next year or two? Or are you just complaining about you can’t find workers?” Kashkari asked the group. “If you look at North Dakota in the oil boom — if you raise wages, people respond and you can find workers.”
Consistent with this perspective, Kashkari, a voting member on this year’s policy-setting Federal Open Market Committee, has dissented against both of the Fed’s interest rate increases this year. Among other factors, he would like to wait see US inflation, which has been slipping below the central bank’s 2% target, heading solidly toward the Fed’s official price stability goal.
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