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Given that labour supply is largely inelastic w.r.t. wages, I suspect that the reason for the lack of qualified labour is not so much underpaying as the arrogant expectation that actually training labour to become qualified is Somebody Else's Problem.

A tight labour market doesn't mean that employers pay more in order to get more labour, because more labour will not be forthcoming at non-prohibitive price increases. What it means is that the price of labour will be set by the minimum that is required for demand destruction rather than the minimum required to prevent riots, sabotage, blockades and other disruptive direct action.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Wed Jan 26th, 2011 at 12:55:27 AM EST
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