🎙️ Podcast Episode Summary: “Why 'Labour Shortages' Don’t Really Exist”

Ah, the timeless complaint of business owners: “We just can’t find the right people!” Whether you're tuning in from bustling New York or scenic Naples, you’ve probably heard—or said—something similar. But according to a sharp take from The Economist, the phrase "labour shortage" is mostly economic fiction. Businesses love to toss it around when they’re unwilling to raise wages, train workers, or adjust their hiring expectations. As the article points out, "Use the term, and you are almost always a bad economist or a special pleader." What’s really happening? Market dynamics are doing their thing—when talent’s scarce, the price (wages) should rise. But if employers resist that, they’re not facing a shortage; they’re facing reality. Let's break it down.

📌 Key Points:

• “Labour shortages” are often misdiagnosed problems. They usually reflect employers’ unwillingness to offer better pay, training, or conditions—not a literal absence of workers.
• Both low-unemployment and high-unemployment countries report similar complaints: 33% of firms in the U.S. and 25% in Italy say they struggle to find candidates with the “right skills.”
• Globally, the talent shortage narrative persists despite diverse labor market conditions—cited by employers in countries from India to Guatemala, according to ManpowerGroup’s survey.
• One economist quoted in the article argues that if firms truly can’t fill roles, they should raise wages or relax their job requirements.
• Immobility of labor, outdated education systems, and employer rigidity often worsen the issue—but none of these mean labor doesn’t exist, just that the system isn’t adapting fast enough.
• Training incentives and wage increases lead to better hiring outcomes than waiting for ready-made talent—which might never come.
• Think of it like this: if there were suddenly a “steak shortage” at $3 per pound, no one would label it a crisis—they’d just pay more or order chicken.

💬 Notable Quote: “Use the term, and you are almost always a bad economist or a special pleader.”

✅ Bottom Line: The so-called “labour shortage” is more about wages, incentives, and flexibility than a missing workforce—it’s not that the talent isn’t out there, it’s that employers might need to change how they’re looking.

📚 Bonus Context:
This viewpoint aligns with long-standing labor market theories from economists like Joan Robinson and Milton Friedman, who emphasized flexibility in wages and job conditions over rigid assumptions about shortages.

🎧 Stay tuned for more myth-busting takes on what’s really driving the global economy!
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