Wednesday , October 18 2017
Home / Zerohedge / One Boston Employer Gave Potential Workers A Math And Drug Test; The Result Was Disturbing

One Boston Employer Gave Potential Workers A Math And Drug Test; The Result Was Disturbing

Summary:
While the Fed's traditionally drab Beige Book described the US economy in conventional terms, growing "at a modest to moderate" pace, one relatively new development was the recurring complaint by employers that they are having an increasingly more difficult time in finding qualified and skilled workers to fill empty positions. Labor markets remained tight, and employers in most Districts had more difficulty filling low-skilled positions, although labor demand was stronger for higher skilled workers. Modest wage increases broadened, and reports noted bigger increases for workers with skills that are in short supply. A couple of Districts reported that worker shortages and increased labor costs were restraining growth in some sectors, including manufacturing, transportation, and construction. That said, we have difficulty finding where in the labor market data one can validate the Fed's finding that wages are growing due to rising labor pressures. If anything, the latest jobs report was a big disappointment not only in terms of overall payrolls, but also wages, with real wages continuing their slump... ... prompting Morgan Stanley to caution that "wage growth is leveling off and may be slowing" and leading the suddenly reflationary Albert Edwards to ask "where is the wage growth", we want to bring attention to one amusing anecdote, which we find quite believable.

Topics:
Tyler Durden considers the following as important: , , , , , , , , , , , , , , , , ,

This could be interesting, too:

financedude85 writes Could the Next Fed Appointment Crush the Housing Market?

Tyler Durden writes Chicago Politician Pushes Ban On Businesses Banning Cash

Tyler Durden writes “One Of The Biggest Fears I Have Is I Miss It”: There Is A Sudden Rush To Open Long-Vol Funds

Tyler Durden writes What Goldbugs Have Been Waiting For: Goldman’s New Primer On Gold

While the Fed's traditionally drab Beige Book described the US economy in conventional terms, growing "at a modest to moderate" pace, one relatively new development was the recurring complaint by employers that they are having an increasingly more difficult time in finding qualified and skilled workers to fill empty positions.

Labor markets remained tight, and employers in most Districts had more difficulty filling low-skilled positions, although labor demand was stronger for higher skilled workers. Modest wage increases broadened, and reports noted bigger increases for workers with skills that are in short supply. A couple of Districts reported that worker shortages and increased labor costs were restraining growth in some sectors, including manufacturing, transportation, and construction.

That said, we have difficulty finding where in the labor market data one can validate the Fed's finding that wages are growing due to rising labor pressures. If anything, the latest jobs report was a big disappointment not only in terms of overall payrolls, but also wages, with real wages continuing their slump...

One Boston Employer Gave Potential Workers A Math And Drug Test; The Result Was Disturbing

... prompting Morgan Stanley to caution that "wage growth is leveling off and may be slowing" and leading the suddenly reflationary Albert Edwards to ask "where is the wage growth", we want to bring attention to one amusing anecdote, which we find quite believable. 

According to the Boston Fed the qualified labor shortage is so bad, that the hit rate on hiring after a simple math and drug test, collapses below 50%. To wit:

Labor markets in the First District continued to tighten somewhat. Many employers sought to add modestly to head counts (although one manufacturer laid off about 4 percent of staff over the last year), while wage increases were modest. Some smaller retailers noted increasing labor costs, in part driven by increases in state minimum wages being implemented over a multi-year period. Restaurant contacts, particularly in heavy tourism regions, expressed concern about possible labor shortages this summer, exacerbated by an expected slowdown in granting H-2B visas. Half of contacted manufacturers were hiring, though none in large numbers; several firms said it was hard to find workers.

One respondent said that during a recent six-month attempt to add to staff for a new product, two-thirds of applicants for assembly line jobs were screened out before hiring via math tests and drug tests; of 400 workers hired, only 180 worked out.

In retrospect, the US may indeed have a qualified worker crisis on its hands.

Tyler Durden
Tyler Durden (a pseudonym) represents the idea that a return to truly efficient markets is a possibility and a necessity. After having experienced the inner workings of capitalism at various asset managers and advisors, Tyler believes that the current model is flawed and a deleveraging at every level of modern society is needed to reinspire the fundamental entrepreneurial spirit.

Leave a Reply

Your email address will not be published. Required fields are marked *