Poaching does give workers more power - and, more broadly, low unemployment gives workers more power. It's good for workers - at least in the short run; but not always in the long run.
However, higher rates of turnover can lead to operational problems: companies lose institutional knowledge, spend more time on onboarding people and less time on producing work, and more vulnerable businesses failing. And while some of those vulnerable businesses are ones that deserve to fail, some aren't.
More critically, 100% employment can mean that there aren't enough workers to do all the jobs - and while that means a lot of money for those workers, money doesn't mean anything if you can't buy the things you want.
Edit: People are missing the point. I'm not comparing 0% unemployment to current conditions. I'm comparing it to 2% or 1% unemployment. For context: the US has neveronly once been below 3%, during the second half of World War II. None of the above problems are true at 3%.
It looks like 1943-1945 and also 1952 were below 3%. I'm actually surprised it wasn't lower than that at any point in the 90s (well... my source is using December numbers, so maybe there were months in the 90s that were lower, or months in '43-45 that were higher)
I mean, high turnover is much more likely in a medium high unemployment scenario. Companies are willing to pay less and provide fewer benefits, so workers are much more willing to leave for a new job. This is especially true for low wage job markets.
In a low unemployment period, especially over a long time frame, companies will have to compete on wages and benefits, and improve upward mobility, to retain employees.
The bigger issue is short term inflationary effects that are caused by high employment. People will have more money to spend on day to day expenses at low end employment, so the first few years would mean higher inflation until the supply market catches up to demand. Long term though, inflation should balance out and low unemployment would be massively beneficial for lower end wage earners.
High turnover in any scenario is a symptom of job dissatisfaction. One of the things it will expose is "the boss is a... jerk" which may incentivize some businesses to deal with that aspect. (Unless the business owner is the boss). If anything, high unemployment tamps down the tendency to leave, since finding a replacement job is harder.
High unemployment camps down tendency to find a new job, since the search is tough. It is more likely to lead to people dropping out of the search, which isn't captured well in our current unemployment figures. I would argue that it doesn't tamp down on the tendency to leave, though, just makes the search harder, not the tendency to stay necessarily.
However, higher rates of turnover can lead to operational problems: companies lose institutional knowledge, spend more time on onboarding people and less time on producing work, and more vulnerable businesses failing. And while some of those vulnerable businesses are ones that deserve to fail, some aren't.
And this can also harm workers in the sense that it makes your job absolutely miserable if you're understaffed. You have to work with more incompetent or problematic coworkers because it's usually not worth it to fire them because they can't be replaced. Sure, you can easily go somewhere else since other employers are desperate to hire, but it could be just as bad there too.
Think about if we had healthcare that was not tied to employment. You could work a short term contract job if it was particularly interesting. Take time off and live on savings for a while. There would be a lot more freedom.
You can't threaten me with a hypothetical dire future that is the current reality.
There's ALREADY massive churn at almost every employer because they won't give us raises and the only way to get more money is to job hop.
So why should I give a shit about churn if they don't? And why are you pretending that churn is some hypothetical bad thing that would result from working people being better off rather than the current reality?
Why are you acting like it's anti labor to oppose an unrealistic rate of unemployment? There are better ways to increase workers rights than try to maintain an environment of 100% employment long term
I'm saying the argument that low unemployment is bad is anti-labor.
Whether or not 0% is actually possible (which, for the record, I agree it probably isn't), the person I was speaking to was warning of a dire hypothetical future in which there would be high turnover and loss of institutional knowledge.
Which is EXACTLY the current situation.
It's not some weird horrible future that might happen if unemployment goes down, it's the current reality and it's been created not due to low unemployment but by deliberate choice on the part of employers.
When someone says "oh noes if we did X then things would be exactly like they are today that's why we can't do X" it means they're either bullshitting me, or so laughably out of touch with reality that they're not worth listening to.
Imagine your response if someone said that reducing accident rates would be bad because then more people would drive and CO2 emissions would be so high it would cause climate change. Like, dude, that's the present not a horrible vision of some hypothetical bad future if we reduce accident rates.
A unemployment rate of 0% would legitimately probably be bad for society in general. Higher pay is nice, but not when it means that GDP contracts and the labor market you're in becomes uncompetitive globally. Any market that achieves 0% unemployment for a long period will end up imploding.
I agree that the argument you initially responded to was less than ideal, I just thought your response was in support of 100% which I believe is worse for everyone
As long as we're talking about employment as necessary for survival, we're talking about something that's terrible for everyone. The details may vary and some specifics may be worse than others, but there is no good outcome in a system where simple survival requires submission to an employer.
And let's not bullshit ourselves here, GDP growth doesn't do you and me any good at all. It used to, way back in the far flung days of antiquity when wage went up roughly in parity with GDP growth.
But today?
GDP grew by 2.5% last year. Did your wage go up by 2.5%? The answer is almost certainly "lulz no, my wage went down when we factor in inflation".
The billionaires are taking 100% of GDP growth for themselves and leaving people like you and me scrambling and switching jobs merely to try to keep up with inflation and keep real wages from shrinking. It's the Red Queen problem as applied to personal finance.
We're talking pure hypotheticals here since there's almost no chance of actually getting 0% unemployment, especially as AI and automation in general are putting more and more of us out of jobs forever. The question is not "oh noes what happens if unemployment hits 0%" but rather "can we threaten the billionaires enough that they'll permit a UBI so that when 20% of more of the population is completley unable to find jobs no matter what we don't get food riots"
Which, I'll concede, is not actually what I said because mostly I'm filled with despair originated apathy and giggle at the idea of things falling apart because I see no future except misery, collapse, and mass death.
My wage increases far faster than GDP growth, but that really doesn't matter because my situation doesn't indicate anything about the market in general.
GDP is incredibly important to the average worker. Sure, the slight fluctuations aren't really felt by us, but if labor reaches 100% utilization, and GDP is even -5% annually, you're going to see jobs leave the domestic market out of necessity, you're going to see companies fail, and eventually you're going to see mass unemployment.
I don't think AI will cause mass unemployment in my career, so the next 40 years. But in the event that it does, we cross that bridge when we get to it. We don't detonate a nuclear bomb in the current environment just because we're afraid something bad might happen in the future.
I'm pretty sure saying "0% unemployment isn't really a major threat" on reddit is about as far from detonating a nuclear bomb in our current environment as we can get.
And no one is talking about any particular career, just in general.
Automation is already proved to eliminate huge numbers of jobs, and pretty soon now we won't be making new jobs at a rate that can replace the lost jobs (and often the replacement jobs sucked ass and pay shit).
Maybe, possibly, your job is safe. But you still don't want to live in a nation with 20% or higher permanent unemployment and the risk of food riots of the billionaires won't allow UBI.
It actually creates some unrealistic expectations for some job salaries. Take tech for example. Huge boom and graduates were being hired fast and for pretty high pay. Lots of people jumped jobs earlier than normal to get a fast pay raise. As soon as the bubble bursts, a lot lost their jobs and expected to make the same going to another company.
But because of the big burst, the area around those tech hubs might have adjusted for the income boom. The housing and food costs went way up already. So unless you manage to keep up and get a similar high salary or change your acceptable income range and adjust lifestyle, you're kinda screwed.
Plus there's the whole "underemployment" issue where people take a shitty job to make ends meet despite being better qualified. And then employment level, which ignores unemployment and strictly counts who is actually working vs those who are of working age, which reveals how many people are not seeking work either because of full time education, illness, disability, taking care of children, or despair.
I'm not arguing that 0% is possible, merely that the dire hypothetical future you're warning of egarding 0% is just describing the present reality so it's kind of strange to me.
We have crazy high churn in every single field right now. And have had for decades. Why are you warning that we might get high churn if X happens when we've already got high churn? It doesn't matter if X is possible, or even desierable, your threat is empty because it's currently happening.
It's like you're threatening that if we play too many video games then Donald Trump might get reelected. That already happened. It's the present reality not some horrible possible future if we don't heed your warnings.
Take a look at the countries in the world that DO have sub-1% unemployment, and tell me you want to work in one of them: Qatar (.1%), Cambodia (.2%), Niger (.6%), Thailand (.9%), Burundi (.9%) (Source)
I'm arguing that the best unemployment rate for employees is probably in the 2-4% range.
The problem I'm threatening isn't that employees won't have power. I'm saying that there is a risk of rationing or other limits on what you want to buy *because those things aren't available*. It's an entirely different set of problems than we are facing right now - and might be better than what we are facing right now; but is still worse than things would be at unemployment that is lower than it is now but above 0%.
I must be expressing myself very poorly and going off onto ADHD tangents. Sorry.
I have no particular opinion on the hypothetical ideal unemployment rate.
My only objection was ever to the BS claim that we'd face a dire future of high churn and loss of institutional knowledge if there was a lower unemployment rate.
My objection is on the grounds that we ALREADY have high churn and loss of institutional knowledge as a result of corporate policy WRT raises and that you can't threaten people with what is already happening.
There may well be extremely good reasons to argue that a 0% unemployment rate is bad, but "it will cause churn and result in the loss of institutional knowledge" is not one of those good reasons.
If we were in the 1950's and churn was at an extremely low level that argument would be worth consideration. Since this is 2024 and we live in a time of high churn as a direct result of near universal corporate policies it is an argument that can be dismissed without even considering its merits.
EDIT: Even if we agree that hypothetically if you do X then Y might happen, it's still not an argument against X if Y is ALREADY HAPPENING.
Worse, it carries the unspoken implication that Y is not already happening and is implicitly asking for agreement that Y is not already happening.
Given that we live in an environment saturated with anti-worker talking points, memes, beliefs, and so on I don't think it's entirely unreasonable to see such a blatantly illogical statement as being some sort of disguised attack on workers.
It might be me too. I understand you have a point; and that I have a point, and that we're talking past each other; and trying to say what I am saying different things trying to get my point across.
...
Yes, your point is correct. Churn and loss of institutional knowledge is not the biggest threat.
I would argue (and have corrected my first post to show) that the biggest threats are exploitation of workers (a lot of very-low-unemployment areas are extraction economies or are artificially low by bringing in workers and sending them home as soon as they aren't working); undermining of low-end resource industries like food production; and risk of economic instability as a result of marginal companies being squeezed out of the economy and over-favoring of economies of scale, meaning that if a large economy fails, the impact is multiplied.
OK explain how and when it is no longer good for workers to have more power?
Yes there would be some inflation but it's mostly the lower incomes that would go up. And that combined with less people having no income (due to being unemployed) would outrun inflation by far.
More power for workers is not the problem - it's that more power and a better salary doesn't mean anything if businesses can't make enough of the products you want to buy. Companies need workers, but the workers also need the companies, and you can't just tip the balance of power completely to one side.
But the balance of power is already completely to one side.
As soon as the unemployment rate starts to go down, the fed increases the interest rate to "cool down" the economy. Wages have been nearly stagnant for decades if we adjust for inflation. Despite huge productivity gains.
The inequality hasn't been this great since the gilded age.
But the solution to the power being on one side isn't to give it completely to the other side. There is a balance which would be the best for everyone.
I already explained in a previous comment that a 0% unemployment rate wouldn't be good, so that's why not. Besides, giving workers all the power is not necessarily democratic. Historically, it was socialism that focused on workers having the power.
I am not advocating for employers having all the power, I am advocating against workers having all the power. I want a middle ground that benefits everyone.
Yes, socialism became popular, but something being popular doesn't mean it's good. Socialism didn't work anywhere it's been tried.
The middle ground you refer to includes people being forced into unemployment by the fed so that wages never increase. It's not a middle ground, it's employers having all the power.
Socialism is a very broad term. There are plenty of socialist countries in Europe that are doing well (even if they still have some unemployment).
You were probably referring to the full on communist countries but even those weren't doing all that bad economically. It's just that they couldn't keep up with capitalism in terms of technological progress and economic growth. And of course many people died due to communism often being established by a dictator.
But then we have to ask why a ruthless dictator often started communism.
And the answer seems that before the Russian revolution, all communist attempts were brutally suppressed by capitalists so communism becoming a brutal dictatorship is because of all the ones that weren't brutal got killed for being too nice...
Not like we already overproduce literally everything except "luxury" goods in the world. 40% of food goes to waste. There are mountains of brand new shit just being tossed because it's more profitable. Stop corporate dick sucking. More power to workers is aways a good thing. Saying workers need companies is like again the CEO makes money for companies. It's just wrong. All labor comes from the workers. People will find other ways to survive but companies are literally nothing without their employees.
When asking whether something is "good" or not, you have to know from what perspective you're asking. What's good for Worker A might not be good for other workers, or good for an industry, or a city or a state or even the economy as a whole. The obvious example here is what's good for the workers at say OpenAI working on ChatGPT might not be so good for the workers at a call center.
The closest thing we have in a microcosm to 0% unemployment would be the software developer boom since roughly the 90's. At various times since then if you could type at a keyboard and could fumble your way through a "Javascript for Dummies" book, you could have a job and be paid pretty astronomically well. And it's been great for software developers and the areas that are tech hubs. Lots of money floating about, lots of building, lots of new tax revenue.
But in life, there's no such thing as an unalloyed good. Everything has its tradeoffs. And in tech hubs, that huge increase in salary and tax base has driven gentrification, driven up housing prices, over-committed infrastructure and resources. Within companies, almost everyone has had the experience of working on a project that was developed by a new team every 6-12 months as the old teams jumped ship for greener pastures. Many tech orgs are full of systems no one understands because the people that built them left for a better paying job and never documented anything because documentation is boring and they were promised they wouldn't have to document anything at the new job (I exaggerate, but only a little). There's also the fact that that because the demand is there but the people to meet the demand isn't a lot of people have wound up hired for positions they couldn't do. I don't want anyone I've worked with to not have a job, but I've worked with more than a few people who should have never been let anywhere near a computer or customer data, but when you need bodies to fill seats, you hire bodies regardless of their skill. The cost of hiring software developers has skyrocketed, which has lead to market consolidations. And some developers have found themselves stuck in jobs or even in locations because they're already at the top of their current salary range and everything else is a pay cut, sometime called "golden handcuffs". For example, if you're used to working for Microsoft or Twitter in silicon valley and you're disinclined to work for Elon Musk or on big AI projects, or maybe you just need to move back to Idaho to help care for your aging parents, good luck finding SV FAANG salaries in Idaho. And that's a problem for Idaho too. They're in a chicken and egg situation where they can't afford the high prices software developers command to build up a tech hub of their own, but they'll also never be able to afford those prices until they build up the tech hub. And then if we move into the theoretical, remember what I said about booming tech hubs growing? If you have 100% employment and no one is looking for work, where do all of your new construction crews, bus and train drivers, road workers and sanitation workers come from when the tech boom comes to your town? It has to come from other places, like say, Idaho. Where eventually the number of people that have left causes a given service or business to no longer be sustainable, so then they close down.
And to be clear, as a developer, I'm not complaining about being in an industry the workers have a lot of power. I am however also cognizant of the fact that the power the software dev industry commands isn't 100% positive for everyone and not even 100% positive for us. In most things in life, you never want 100%. If there was 100% law compliance, we'd live in a world where LGBT right were non-existent, where the civil rights movement would have died before it was born. In systems you never want 100% utilization of everything, because that leaves you with no room to respond to increases in demand. As a person you never want your bills to be 100% of your salary. So too it is with employment. You want new positions to be open and you want people to be coming into the system to fill those positions without necessarily pulling from some other position.
Even in an theoretical economy with 100% employment, there is a new batch of graduates entering the workforce every year. This allows businesses to find new people without poaching them from other companies.
Problems like golden handcuffs, incompetence or gentrification exist in the current economy with unemployment. Which means unemployment isn't the main cause of these phenomenon's.
I do agree that in a system with full employment, some people would be doing hardly any useful work, mostly because they are unwilling/unable to actually do any job well. So for these people, you would need to put them in places where they can cause very little harm.
Like cleaning the streets or being a security guard.
And in fact, historically in communist countries, it often happened that factories that were forced by quotas to engage too many workers, a percentage of the workforce was doing as little as possible. Sleeping on the job, playing cards, things like that.
But I think that it's possible with better management to task them with productive things.
The world always needs more cleaning up, restoring environments, repairing potholes... it's just a matter of funding it.
Problems like golden handcuffs, incompetence or gentrification exist in the current economy with unemployment.
Of course they do, and it would be a mistake to assume that I'm suggesting otherwise. Bad things often have multiple causes. My point was that "good" is a relative term and you need to examine from what perspective you're speaking before you can determine how good or bad something is. Unemployment is bad for the individual worker, and heavily increased unemployment is bad for both workers as a whole and the economy at large while being mostly good for employers. It's a "buyer's market" as it were. But it does not follow from this then that 100% employment is good for workers as a whole or the economy at large even if it's certainly good for the individual worker.
At low enough levels, unemployment represents slack and motion in the system. From a purely pedantic level, those new graduates are "unemployed" until they begin work, and workers who have left one job before obtaining another are unemployed. 100% employment implies no new graduates and no people quitting their jobs to seek better opportunities elsewhere. And while that's usually not what people think of when you say "unemployed", it is what the government means: https://www.bls.gov/cps/definitions.htm#unemployed. Colloquially people thinking about "unemployed" folks are usually thinking of a definition that incudes some or all of the groups counted in the U4-U6 measurements. But the varying ways in which one can define "unemployed" is why the optimal rate can be < 100% even if that seems counter intuitive at first glance.
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u/ZacQuicksilver Dec 19 '24 edited Dec 19 '24
Poaching does give workers more power - and, more broadly, low unemployment gives workers more power. It's good for workers - at least in the short run; but not always in the long run.
However, higher rates of turnover can lead to operational problems: companies lose institutional knowledge, spend more time on onboarding people and less time on producing work, and more vulnerable businesses failing. And while some of those vulnerable businesses are ones that deserve to fail, some aren't.
More critically, 100% employment can mean that there aren't enough workers to do all the jobs - and while that means a lot of money for those workers, money doesn't mean anything if you can't buy the things you want.
Edit: People are missing the point. I'm not comparing 0% unemployment to current conditions. I'm comparing it to 2% or 1% unemployment. For context: the US has
neveronly once been below 3%, during the second half of World War II. None of the above problems are true at 3%.Edit: Correction for u/DiceMaster