Shorting yourself

Richard Aboulafia:

Executives who think we live in a Soviet economy draw bad conclusions. “We can’t seem to get any more $22,000 a year pilots to meet our needs! Our competitors are paying $26,000 per year, and they’re winning. There’s a pilot shortage!” Or, even stranger, “People aren’t willing to get an engineering degree to start a career in aerospace with the constant risk of being fired. There is an engineer shortage!” Or strangest of all, “We were paying $5 per pound for Material X. We’re now paying $6. There’s a shortage of Material X!”

Most of these executives aren’t idiots. Sure, by whining about a “shortage,” they’re being incredibly passive about their business, but most are just looking for a handout. They’ve done the math, and even though more experienced pilots, engineers, and machinists are more capable, it’s more profitable to employ lower paid new starts. Yet working conditions and wages often aren’t good enough to get these. That’s where government comes in. Training subsidies are a popular way for state and local politicians to support industry. Even at the national level, President Obama has proposed a government/industry scheme to train 10,000 new US engineers each year. As a 51-year old mid-career market analyst, I’m deeply grateful that nobody is thinking of a government program to train hundreds of new market analysts every year.

Remember this the next time someone whines about how hard it is to find good help.