Socialists like Kshama Sawant like to argue that market capitalism isn’t working for the rest of us. But I’m beginning to wonder if it is actually working at all:
The American Trucking Associations has estimated that there was a shortage of 30,000 qualified drivers earlier this year, a number on track to rise to 200,000 over the next decade. Trucking companies are turning down business for want of workers.
Yet the idea that there is a huge shortage of truck drivers flies in the face of a jobless rate of more than 6 percent, not to mention Economics 101. The most basic of economic theories would suggest that when supply isn’t enough to meet demand, it’s because the price — in this case, truckers’ wages — is too low. Raise wages, and an ample supply of workers should follow.
But corporate America has become so parsimonious about paying workers outside the executive suite that meaningful wage increases may seem an unacceptable affront. In this environment, it may be easier to say “There is a shortage of skilled workers” than “We aren’t paying our workers enough,” even if, in economic terms, those come down to the same thing.
Adjusted for inflation, truckers are now earning 6 percent less, on average, than they did a decade ago. And yet trucking executives would rather leave business on the table than raise pay to attract more truckers. “It takes a peculiar form of logic to cut pay steadily and then be shocked that fewer people want to do the job,” observes the New York Times’ Neil Irwin.
So much for supply and demand.
And its not just the trucking industry. As the housing market recovers, the construction industry is facing a looming worker shortage, even against the backdrop of persistent six-plus percent unemployment. Here in Washington State, produce is left rotting in the fields for want of enough farmworkers at harvest time. Pay them and they will come, Econ 101 teaches. But in industry after industry, the masters of capital simply refuse.
Whether through collusion, or habit, or sheer ill will, a labor market that effectively suspends the rule of supply and demand isn’t really a market at all. And if there is no functional labor market, then capitalism really isn’t working for the rest of us. Really. In fact, it is fair to question whether market capitalism is working at all. For surely there must be more to the promise of capitalism than the mere accumulation of capital.
Minimum wage opponents like to argue that wage floors distort the natural efficiencies of the market. But you can’t distort something that doesn’t exist.