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by on July 10, 2014 at 7:34 am in Uncategorized | Permalink

1 BC July 10, 2014 at 8:01 am

#6. Does this mean that wages are sticky in the upwards direction too?

I originally meant this question as a joke. However, the article mentions that the openings in the financial sector and large firms are staying vacant for particularly long times. Maybe, the political and regulatory environment against “outrageous” pay is making some employers reluctant to offer market-clearing compensation packages to avoid scrutiny? That would be consistent with long vacancies in high-skill occupations (upwardly sticky wages) and short vacancies and job growth in low-skill occupations (downwardly sticky wages causing unemployment during the recession; recovery following sufficient inflation to lower real wages).

2 collin July 10, 2014 at 8:20 am

Are wages sticky on the way up? Yes because employers are used to the 2009 – 2012 labor market and believed it will continue. Now that skilled employees survived those years, those positions are being vacated by retirements, more one income families, or promotions. And there is a lot less unemployment in skilled positions so now companies either have to pay more or settle for a non-prefect candidate.

In all reality, the skilled labor force is becoming a tight market.

3 Just Another MR Commentor July 10, 2014 at 9:42 am

Yep that’s why the solution there is to bring in a tonne more immigrants. But there’s too much unthinking opposition to that sensible policy – unfortunately I see a lot of opposition to more immigration in the comments of this very blog. Talk about people being willfully ignorant.

4 Just Another MR Commentor July 10, 2014 at 9:56 am

Really smart, sensible article by a smart economist on this actually

5 Axa July 10, 2014 at 10:26 am

Why immigration? Why no invest US capital where the workers are?

6 Just Another MR Commentor July 10, 2014 at 10:28 am

We need workers from the talented tenth, this has been tapped out in the US – immigration is the simplist and most logical solution. Lots of brillaint minds out there in the world to bring to America to do the work most current Americans can’t

7 BC July 10, 2014 at 1:01 pm

There may be two other factors that are interacting with sticky wages: (1) relative importance of income effect vs substitution effect and (2) increases in marginal tax rates for higher earners. Suppose everyone’s nominal, pre-tax wages have been sticky and, thus, a few years of inflation have lowered pre-tax real wages. Low-wage earners are unlikely to substitute leisure for work, so vacancies fill more quickly. High-wage earners, particularly those with accumulated wealth, may be more likely to substitute leisure for work in response to falling real wages. In addition, if pre-tax wages have been sticky, then after-tax wages of high-wage earners have fallen more. (Yes, empirically, high-wage earners’ wages might have risen faster than low-wage earners’ due to relative changes in nominal wages, but that’s a different effect than that due to sticky nominal wages.)

8 XVO July 10, 2014 at 9:10 am

The job market must be lubricated!

9 Axa July 10, 2014 at 9:43 am

The author provides a simpler explanation: big & slow RH departments. From the day a new position is created or a employee resigns/fired, it takes 60+ days of psychometric tests, interviews, health tests, even immigration paperwork . For 1-9 employees business like a roofing contractor the decision is taken during the 1st interview.

10 Just Another MR Commentor July 10, 2014 at 9:47 am

This is where removing a lot of hiring regulations could prove useful. Let’s start with significantly reducing the hurdles to hiring talented people from all over the world.

11 Urso July 10, 2014 at 10:03 am

Yes, this was the least surprising line in the article: “The employers that really seem to be dragging their feet these days are big companies: At firms with at least 5,000 employees, the average position stays open an astonishing 68.5 working days.” Of course big companies take longer to fill positions than small companies (who sometimes just make offers on the spot). Is the data skewed because most hiring these days is being done by big companies?

12 BC July 10, 2014 at 1:13 pm

That’s a good point. However, the graph shows that even for 5000+ companies, vacancies are longer now than in 2003-2010. They were similarly high in 2002-2003. Vacancy duration doesn’t seem to fluctuate as much at smaller and mid-size firms. Maybe, wages are sticky upwards primarily at large firms coming out of recession. For example, hiring managers at large firms may not have as much flexibility to offer compensation outside a bureaucratically determined compensation band?

13 Nathan W July 10, 2014 at 12:03 pm

I used to work for a company.

They told me after several months that I had to take some personality tests. But these tests were not standardized ones that I could find information about and it didn’t seem like management were able to explain why they wanted to use these tests.

That was the last “company” I worked for.

14 Komori July 11, 2014 at 1:45 pm

The tech industry has known that for a long time. It’s much easier to get a pay raise by jumping companies than it is by staying in place. One guy I worked with recently doubled his salary after a toxic manager retaliatory-fired him. And, of course, all the employers lobby for more H1B visas because there’s no qualified tech workers (with the unspoken “willing to work for what we’re willing to pay” they don’t want anyone to notice).

15 Ray Lopez July 10, 2014 at 8:24 am

@ # 5: Fable of the bees–

–nice rehash of the bees fable and the free market response, but what does the author Timothy Taylor say about pandemics? Do you just let the market adjust for the Black Death? What if today’s bee collapse is due to a pandemic caused by spreading infected hives? Do you just let bee keepers contract this externality away? I think government boffins doing bee research is useful here, to prevent pandemics. But it could also be a waste of money, agreed.

Trivia: a bee theme fast food restaurant popular in the Philippines is called “Jollibee”, similar to McDonalds, and features a bee.

16 Ed Snible July 10, 2014 at 10:11 am

The article points out that the price of a 1 pound jar of honey has gone from $1 to $2. According to the Bee Research Association, to make that jar bees must [cite: ] make 10,000,000 trips to make that jar, and the trips are up to 6.5 km long! Considering the labor input for a jar $2 seems incredibly cheap. The average bee makes only 1/12th of a teaspoon of honey in it’s lifetime [cite: ]. Your slice of toast this morning represents the total lifetime work product of two dozen bees. Bees deserve more compensation for their efforts, but there is no way to pay them, and their wages are literally sticky.

17 Urso July 10, 2014 at 10:34 am

Can’t wait for the Anthropods Rights Activists to become a thing.

18 Urso July 10, 2014 at 10:34 am

Arthropods obviously, Anthropods would be interesting though.

19 Mark Thorson July 10, 2014 at 11:31 am

A Google search on “anthropod” is somewhat amusing, especially the hits on people who should know better (biologists). Even funnier is a verbatim search on “incompetant”.

20 NPW July 10, 2014 at 10:35 am
21 Just Another MR Commentor July 10, 2014 at 10:40 am

This is what I mean these anti-immigration screeds on this site have gotten out of control. Economically literare people know immigration is vital to this country, the solution to the problem that we have so many job openings should be obvious to anyone with half a brain: we need massive numbers of talented immigrants.

22 rob42 July 10, 2014 at 10:55 am

Talented immigrants aren’t the ones swimming across the rio grande, and given the unemployment rate of black males, it seems to me that we have way too many unskilled immigrants. Do you really think the immigration debate is about whether we allow more high IQ, highly-educated professionals from Asia come to the United States?

23 Just Another MR Commentor July 10, 2014 at 11:07 am

NPW posted two articles criticising the H1B system which defineitly should be massively expanded. Even lowskill immigrants help however. The unemployment rate of black males must be high due to them demanding too high wages, increasing competition would bring down wages and increase employment.

24 NPW July 10, 2014 at 11:13 am

Anti or pro immigration is a different issue unrelalted to filling job vacancies.

The political point of increasing the visas isn’t because we have a skills mismatch; it is to lower the wages of the middle class for big business to increase profit.

Others can explain their position on if that is a good thing or not.

I find it savagely ironic that the people I met who are most vocal in their support to the U.N., the concept of a “One World Government”, the idea that it is competeing governments that cause the world’s conflicts, that the human race could achieve world peace if we’d all just sing and hold hands, are also supporters of protectionism. If one thinks physical borders shouldn’t be protected, then why do they think economic borders need to be?


1) We need to spend more money on world aid.
2) All of the world, other than the US, is good.
2a) If they do something bad, it was the US’s fault.
3) Capitialism is the root of all evil, because they don’t take care of the little guy, in particular, the starving kid in the third world.
4) Then capitalism goes and creates a senerio where the little guy gets a massive pay bump.

5) Therefore, we need to be anti-immigration.

For the record, I don’t care where someone comes from, but I do care about protecting a successful culture. So yeah, learn to speak the local language before say, getting a job teaching at a state school.

Of course, if you are Chinese, and you somehow manage to make sure that most of your students you are teaching are also Chinese, no need to teach the course taught in Univeristy of Maryland College Park, in English.

Perhaps I’m letting my priors show.

25 Hei Lun Chan July 10, 2014 at 11:03 am

#4 About ten years ago some guy named Greg Packer was in the news because Ann Coulter discovered that the media had quoted this guy as a “man on the street” dozens of times. Maybe there are a lot of people like him in Japan?

26 Mark Thorson July 10, 2014 at 11:41 am

I suppose it’s the dilemma of wanting to show American-style man-in-the-street interviews, but being in Japan where almost nobody is willing to do that. So, the gap has to be filled with these ringers.

27 Gordon Mohr (@gojomo) July 10, 2014 at 4:06 pm

With Packer, it’s just that he seeks the media – so an opportunist, not a ringer:

Perhaps most Japanese-on-the-street are reticent to give interviews. Then a few insistent exhibitionist types, always going where they know the news ‘stand-ups’ will be done, always willing to shade their identity/commentary for the story-of-the-day, could really monopolize things… as is observed.

28 mkt July 11, 2014 at 8:59 pm

There is (or at least used to be) a Japanese TV show which was shown on public TV in Los Angeles, called “Cool Japan”. Each show covered a couple of topics, one time the topic was the reluctance of Japanese people in the street to be interviewed.

And they demonstrated this by showing video clips of their crews trying to interview people in the street, and being rebuffed. Of course, those interactions could’ve been as easily staged as the allegedly staged interviews.

But given the existence of publicity-hounds such as Greg Packer and Shiho Akimoto, your pair of hypotheses looks plausible. Lacks of supply of interviews from average Japanese in the street. Made up for by an abundant supply of Packer-Akimoto types eager to be interviewed.

29 Z July 10, 2014 at 11:50 am

#6: The underlying assumption is that jobs are posted with the intent to fill them. Large companies often harvest applications with no intention of filling the posted job. Home Depot does this routinely. Then there’s the assumption the posting is to be filled immediately. The zombie economy has slowed all of these internal processes down. Projects are moving slower as business is far more cautious.

If this is your proof for flooding the country with peasants, you should probably pick another cause to champion.

30 Joe July 10, 2014 at 12:08 pm

#6 I looked over the abstract (paywalled) and the conclusion seemed to be that recruiting intensity has decreased. The conclusion seems underreported. Recent posts at chemjobber indicated noncompete clauses could also be gumming up labor mobility. I wonder if Tyler will mention Katz et al. recently released by NBER.

31 Nathan W July 10, 2014 at 12:10 pm

Maybe it’s because business have this silly idea that employees come shrink wrapped with precisely all the skills they hope to find in the individual.

Also, consider this modus operandi from the HR perspective: “ABC are not negotiable, DEFG would be nice, but it is easy to train for that and we don’t require it strictly on day 1”. But you never see that these days. It’s always “ABCDEFG are not negotiable”. Everyone knows (?) it’s a wishlist, but employers seem unwilling to invest in new talent.

With the result that important product and process tasks and development remain undone because they are unwilling to train someone in a handful of peripheral tasks.

The best is becoming the enemy of the good. Because businesses wait for a perfect match instead of training someone.

Solution – Worried someone will leave too soon? Backload pay to the end of a contract, or if fungibility is in doubt, buy them a $5000 GIC which pays out only if they complete the 2-year contract, for example. Get hiring.

32 Dan July 10, 2014 at 4:29 pm

#3 I wonder if Kaplan is going to break any new philosophical ground that wasn’t already covered in Ellis Weiner’s “Santa Lives!: Five Conclusive Arguments for the Existence of Santa Claus.”

33 Ryan Cousineau July 10, 2014 at 6:00 pm

#2: the “first robotic parking valet” claim is off by about 50 years, depending on how you define it. See this Wikipedia article:

And if that doesn’t fulfill your robotic parking valet needs, this gloriously detailed 12-minute period film (circa 1970 I think) shows an in-service Rotopark installation, plus tons of detailed scale models demonstrating the operation:

The benefit of these systems is always the high parking density, the problem is a multi-level conventional garage is usually cheaper and doable. Also, they can get backed up if too many people want their cars in or out at once.

The German system, though, doesn’t look like it requires you to build an automated parkade, you can presumably use these robots in an existing structure.

34 Tom July 10, 2014 at 6:09 pm

#6 – It seems very unlikely that the lengthening average age of job postings has anything to do with increased fakery. Likewise the WP author’s guess about uncertainty seems off the wall – why would uncertainty be rising, and why would it lead employers to take longer to fill? It seems far more plausible that the data reflects labor market tightening.

There is after all a much simpler explanation for the lack of pay acceleration. The job market is tightening, but not yet by enough to create wage pressure demand. Look at the average lifespan of postings, not some anecdotal extremes. It has lengthened by a week or so. Whoopee doo. Having to wait is an extra week to fill a job is not that big a deal.

35 Tom July 10, 2014 at 6:25 pm

PS it also sounds like the data compilers could improve their results by treating differently different kinds of postings. For example big firm hires – these always stay up for months, often for a predetermined period that has nothing to do with how easy they are to fill. With these you’d better track reopenings, or just numbers of openings.

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