Don't get me wrong. I'm not "anti-business". But I am "anti-WTF". Everything that you've said makes sense... in a normal (thriving) economy. But this time there are exceptions. We've had the Great Recession -- and thousands if not millions of people were laid off because of it -- and everyone knows that businesses aren't doing great. Small businesses, for the most part, are struggling. Large businesses and corporations seem to be doing well. There are positions that need to be filled in these companies. But are these job posts just a smokescreen so businesses can say, "hey look I'm trying to hire but no luck" or is there a real need to fill that position and no one is really qualified. Based on the article in the OP, it seems to be the former.

But are these job posts just a smokescreen so businesses can say, "hey look I'm trying to hire but no luck"
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So what do you propose is behind this 'smokescreen'? If you say that businesses are being dishonest, what exactly do you think is the truth?
Some evil shadowy cabal of cackling bankers in tuxedos and top hats trying to drive every person in the country into poverty?

Business will hire when the the additional revenue from that hire exceeds the cost of playing the salary and employment taxes of that person. Right now that equation doesn't hold true, so they aren't hiring.

Large businesses and corporations seem to be doing well. There are positions that need to be filled in these companies.
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You contradict yourself. If they are doing well without their former positions than these are not positions that need to be filled. Some business may have discovered they can still be just as productive after slicing off some percentage of their lower-performing employees, so they will continue to do so until that formula changes.

Being fired and losing your job because of cut backs are completely different. If your previous employer is happy to give a good reference then I see no reason why any employer should look at you any less. I've seen a few times where really good employees have been "let go" (cost cutting) rather than pretty bad ones just because the bad ones had been there longer. Makes no sense to me and I agree that employing only the employed is a bad idea yet lots do it.

But are these job posts just a smokescreen so businesses can say, "hey look I'm trying to hire but no luck"

So what do you propose is behind this 'smokescreen'? If you say that businesses are being dishonest, what exactly do you think is the truth?
Some evil shadowy cabal of cackling bankers in tuxedos and top hats trying to drive every person in the country into poverty?

Business will hire when the the additional revenue from that hire exceeds the cost of playing the salary and employment taxes of that person. Right now that equation doesn't hold true, so they aren't hiring. [/quote]

It's not that simple. While companies may have sound reasons for not hiring the unemployed in the immediate term and/or beyond, they could very easily be using other factors to decide their hiring strategies. Businesses may not be interested in driving people into poverty, but they might be very interested in employment numbers being poor to help propel Republicans ahead in the next election. This would give them a much better chance at seeing reduced taxes and regulations and so forth, whether they are necessary or valuable to economic recovery or not.

And if the equation were really strictly revenue compared with wage, you wouldn't see things like executive pay increasing while revenue is so poor that they can't hire.

Large businesses and corporations seem to be doing well. There are positions that need to be filled in these companies.
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You contradict yourself. If they are doing well without their former positions than these are not positions that need to be filled. Some business may have discovered they can still be just as productive after slicing off some percentage of their lower-performing employees, so they will continue to do so until that formula changes.
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They may be doing well off of lower levels of productivity brought on by low demand or for any number of other reasons, not because they've suddenly cut out a ton of dead weight that they had before. And if they truly do not need more workers right now, for whatever reason, they shouldn't be advertising for applicants at all, let alone trying to cherry pick from the already employed.

Businesses may not be interested in driving people into poverty, but they might be very interested in employment numbers being poor to help propel Republicans ahead in the next election.
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I guess I could imagine some really extremely political people trying to do this just to stick it to Obama, but I think it's foolish to assume that companies would make these decisions en masse to their own detriment. The number of people in the country is so large that even if wal-mart doubled their number of employees overnight, which I think we can agree is on the really extreme side of possibilities, it wouldn't even lower the unemployment rate by half a percent. Most companies simply don't have any power to influence the rate at all, and would go bankrupt before influencing it by 0.01% in either direction. I know many CEO's of huge companies are also Democratic donors as well, so you can't say that all business is working in concert to propel the republicans. According to Huffington in 2010 70% of people who identified themselves as CEOs were donors to Democratic party.

you wouldn't see things like executive pay increasing while revenue is so poor that they can't hire.
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For large businesses, I don't think they've ever claimed that revenue was so poor that they can't hire, rather that it was not profitable for them to hire. They are very happy to hire outside of the US where wages/taxes are lower, and therefore the employee is a profitable one.

And if they truly do not need more workers right now, for whatever reason, they shouldn't be advertising for applicants at all, let alone trying to cherry pick from the already employed.
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Why not? Maybe you've got a small business and sales are strong enough that you can scrape together enough money for one additional hire. Your business is important to you so you think you really need somebody who is outstanding and can really turn things around. You can either choose from

1) The pool of people that are currently still employed, or
2) The pool of people that nobody else wants to hire

I won't claim that every person whose ever been laid off is a slacker and dead weight, but generally if you've got a handful of employees out of your payroll who are really the moneymakers, you're not going to lay them off. Layoffs are not throwing darts at a dartboard and saying "wow he's our best employee, but we're going to get rid of him anyway". In the general case those who have been laid off will be less desirable than those who are still employeed.


I'm not arguing that it doesn't suck for the unemployed and that the universe is perfectly fair and rational to everyone all the time, but in this case these companies' decisions are perfectly in line with their best interests. If it doesn't work out for the country as a whole, well I guess that's too bad. But you can't whine at a group of people to collectively change their behaviour when it is against their own best interest and expect results.

And if they truly do not need more workers right now, for whatever reason, they shouldn't be advertising for applicants at all, let alone trying to cherry pick from the already employed.

Why not? Maybe you've got a small business and sales are strong enough that you can scrape together enough money for one additional hire. Your business is important to you so you think you really need somebody who is outstanding and can really turn things around. You can either choose from

1) The pool of people that are currently still employed, or
2) The pool of people that nobody else wants to hire

I won't claim that every person whose ever been laid off is a slacker and dead weight, but generally if you've got a handful of employees out of your payroll who are really the moneymakers, you're not going to lay them off. Layoffs are not throwing darts at a dartboard and saying "wow he's our best employee, but we're going to get rid of him anyway". In the general case those who have been laid off will be less desirable than those who are still employeed.
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Of course if you want someone to turn things around, you'd want to get someone who's the cream of the crop. Unemployed or employed. But we're not talking about trying to save a business or revive a product. We're talking about normal employment. As in, "I need someone to fill this position. What are my options?" Or, "We need a few more phone operators. Let's get some people in here."

Businesses may not be interested in driving people into poverty, but they might be very interested in employment numbers being poor to help propel Republicans ahead in the next election.

I guess I could imagine some really extremely political people trying to do this just to stick it to Obama, but I think it's foolish to assume that companies would make these decisions en masse to their own detriment. The number of people in the country is so large that even if wal-mart doubled their number of employees overnight, which I think we can agree is on the really extreme side of possibilities, it wouldn't even lower the unemployment rate by half a percent. Most companies simply don't have any power to influence the rate at all, and would go bankrupt before influencing it by 0.01% in either direction. I know many CEO's of huge companies are also Democratic donors as well, so you can't say that all business is working in concert to propel the republicans. According to Huffington in 2010 70% of people who identified themselves as CEOs were donors to Democratic party. [/quote]

It's not extreme at all. I'm not saying that businesses are trying to run the country from some partisan perspective. The essence of business is accurately projecting future circumstances, and positioning themselves now to capitalize on the opportunities those future circumstances will present. It may not be to their detriment to be a little more sluggish on hiring now, while working their current employees harder and slashing pay and benefits, if they can get a decade's worth of preferential tax treatment or lighter regulation. They don't even have to work together for this, as they might all be projecting that the environment will favor them in a couple of years, so why make extra outlays now against that?

It's true that no one employer has the capacity to shift unemployment numbers by all that much on a national level, although at a local level they can have a huge impact. But national level numbers are also quite large. A tick of half a percent is an absolutely massive change. But my point wasn't that businesses are intentionally keeping employment numbers low for the sake of being evil, as your post suggested would have to be their rationale, but rather that other factors can be incentives behind insincere or bizarrely constricted job postings.

And the CEO contribution point isn't very significant. Aside from the fact that a good portion of major companies donate to both parties, and could then say "I'm a CEO and I donated to Democrats", CEOs aren't the sole dictators of hiring practices. Plus, I never said that corporations were secretly allying themselves with Republicans, just that they could well have an incentive for seeing Republican legislation passed and that such an incentive may factor into sector-wide hiring practices.

you wouldn't see things like executive pay increasing while revenue is so poor that they can't hire.
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For large businesses, I don't think they've ever claimed that revenue was so poor that they can't hire, rather that it was not profitable for them to hire. They are very happy to hire outside of the US where wages/taxes are lower, and therefore the employee is a profitable one. [/quote]

If they don't want to hire, they won't advertise for positions. Or, they will advertise for positions, but do so in a way which prevents them from hiring (like only drawing from the currently employed, who are significantly less likely to be job seeking than the unemployed). And if they have revenue to pump executive pay (which isn't directly tied to profitability), they certainly could have used some of that money to hire a new position or two, perhaps raising profits in the process.

And if they truly do not need more workers right now, for whatever reason, they shouldn't be advertising for applicants at all, let alone trying to cherry pick from the already employed.
[/quote]

Why not? Maybe you've got a small business and sales are strong enough that you can scrape together enough money for one additional hire. Your business is important to you so you think you really need somebody who is outstanding and can really turn things around.
[/quote]

My post was a direct reply to one of yours, in which you said that if a company is doing fine with fewer employees then they won't hire. You can amend that if you'd like, but you can't have it both ways, where it is clearly in their interest not to hire, but they still might hire.

1) The pool of people that are currently still employed, or
2) The pool of people that nobody else wants to hire

I won't claim that every person whose ever been laid off is a slacker and dead weight, but generally if you've got a handful of employees out of your payroll who are really the moneymakers, you're not going to lay them off. Layoffs are not throwing darts at a dartboard and saying "wow he's our best employee, but we're going to get rid of him anyway". In the general case those who have been laid off will be less desirable than those who are still employeed. [/quote]

You are broadly right that a company may work to protect someone who is particularly high revenue-generating, but a layoff is rarely a one-at-a-time firing situation. If they say to a department, "cut your employees in half", they may indeed keep the best and fire the people who generate the least money. Or, they can (and often do) fire their best, because the best tend to have higher pay or some similar reason. Plus, not all employees can be measured in a dollars-generated framework. If you're customer support, your work doesn't bring in any new revenue, and you can't measure the revenue that would have been lost without that worker.

If your boss says you need to cut net expenses by X%, what are you going to do? Raising revenue is tough right now, but cutting expenses isn't. There are absolutely situations in which a company cannot satisfy a directive like this without ditching someone really valuable.

I'm not arguing that it doesn't suck for the unemployed and that the universe is perfectly fair and rational to everyone all the time, but in this case these companies' decisions are perfectly in line with their best interests. If it doesn't work out for the country as a whole, well I guess that's too bad. But you can't whine at a group of people to collectively change their behaviour when it is against their own best interest and expect results.
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As I posted previously, this situation is an example of a market failure. Incentives have aligned to produce individual behaviors that are detrimental to the nation as a whole and to individual businesses in particular. I never said that it was in any specific business' best interest to go on a hiring spree (quite the opposite, in fact), but that a hiring practice like this one will exacerbate weak demand to everyone's detriment.

When you said that to be less than completely honest in hiring practices meant that executives must be sadistic and create poverty for the sake of doing so, I responded that employers absolutely have incentives for a "smokescreen", whether or not that incentive is large enough to majorly affect their hiring behavior. Pay increases for executives while revenues are poor and hiring is frozen suggests that it isn't a straight revenue - wage = + = hiring situation.

When you said that if a company can maintain productivity at the same level after cutting low-value employees, that company won't hire, I responded that the value of the employee is not a cut-and-dried formula (although I was definitely less than explicit on this), and that if they won't hire there's no point in posting an ad for a job. Your counterexample of a company that does indeed need to hire doesn't apply, because that's not the situation that you raised to which I responded.

Unemployment is high enough that without question there is someone who can do the job you want, the way you want it done, among the ranks of the unemployed. Only looking at the currently employed forces a company to make a better offer than that employed person already has, raising the company's expenditure for the same value they could get with someone else. Companies wouldn't behave this way without an incentive to do so, but the argument that anyone who's unemployed isn't worth hiring (which you can't claim not to make if you defend this hiring practice) is unlikely to be true given today's labor environment.

Large businesses and corporations seem to be doing well. There are positions that need to be filled in these companies. But are these job posts just a smokescreen so businesses can say, "hey look I'm trying to hire but no luck" or is there a real need to fill that position and no one is really qualified. Based on the article in the OP, it seems to be the former.

The question whether there is a real need to fill that position is an interesting one. How does one measure that? I could imagine that a lot of job posts really are "smokescreens", though not in an evil sense. As a manager, I might want to keep some job postings open, just in case some Einstein-level genius applies for it, who I could then hire to keep him around for better times. But of course I wouldn't be interested in some applicant who is merely average, or even slightly above average. When answering some careless multiple choice survey about the current hiring situation, I would naturally say that I have a hard time finding somebody for my job postings, which would then aggregate into some think tank's press release about how companies are not finding qualified workers. But the underlying truth would be that finding qualified workers isn't really a problem - it's just that managers like me are inflating their expectations - more or less behaving like undergrads in university: undergrads invariably complain that problems are too difficult, no matter how difficult they are on an objective scale, and managers invariably complain that they want more qualified applicants, no matter how qualified their applicants are on an objective scale. This normal human whining causes a lot of noise, and it can be hard to filter out an objective signal from this, particularly because politics are interfering as well.

So how can we find out if a real need for workers is not being satisfied? Well, assume that this (call it A) was the case. This would mean that companies are finding it difficult to keep producing enough to meet demand, or that they have to turn down contracts because they don't have enough manpower - call this (B ). So let's agree for a moment that if A was the case, then B must be the case. Do you see any evidence for B happening in the US? Are shelves in Walmart suddenly as empty as the markets in former East Germany? Are building contractors turning you down one by one because their books are full? If yes, then it is reasonable to at least suspect that A is also true, though one must be careful: We established that A => B, but this is not the same as B => A. There might be other causes for B. If B is not happening, then A logically cannot be true.

(Of course, it is also possible that some of these things are happening in one part of the economy, while another part of the economy remains unaffected.)

I'm not arguing that it doesn't suck for the unemployed and that the universe is perfectly fair and rational to everyone all the time, but in this case these companies' decisions are perfectly in line with their best interests. If it doesn't work out for the country as a whole, well I guess that's too bad. But you can't whine at a group of people to collectively change their behaviour when it is against their own best interest and expect results.

That's pretty much the crux of the issue. Individual optimizing behavior of those with enough effective economic freedom to change the situation causes suffering for the society as a whole, while the unemployed themselves are unable to improve their situation. This is a phenomenon that is well understood at least in the context of game theory. In my opinion, this justifies the most important function of government as far as economic policy is concerned. The government has both the power and the responsibility to bring individual behavior in line with what benefits the society as a whole. Depending on the circumstances, this might mean either intervening directly, or changing the rules of the game in such a way that individual behavior automatically works towards not just an individual, but also a social optimum - i.e. mechanism design.

Being fired and losing your job because of cut backs are completely different. If your previous employer is happy to give a good reference then I see no reason why any employer should look at you any less. I've seen a few times where really good employees have been "let go" (cost cutting) rather than pretty bad ones just because the bad ones had been there longer. Makes no sense to me and I agree that employing only the employed is a bad idea yet lots do it.

There are three possibilities:
1. Person got fired with a cause
2. Company had to downsize due to economy. 200 out of 500 employees were let go
3. Company closed, everyone was fired.

Another company is hiring. They receive 1000 applications for a single position. Look at their thought process during screening:
1) loser, don't want to have anything to do with them
2) person did get fired, but 300 at same company did not. Why was that person let go, when 300 others were not?
3) why did that person stay at a sinking company till the end? Any ambitious or proactive employee would have noticed something was wrong and started looking for a new job before they were out of work.

In a way it makes sense. Increasingly, employers want employees with a sense of business. Especially for "knowledge workers".

But it also has downsides. Employees will be much more sensitive to corporate climate. The "good" ones will smell the very first moment company slips or loses some traction and will bail en masse.

Ironically, employers are self-selecting disloyal people who will only ever take care of themselves. They are effectively eliminating any notion of loyalty. Even worse, they need to increasingly close internal communication to prevent true health of company to be known to employees, even further destroying the climate.

But the biggest issue is that "no job unless employed" rule has spread via monkey-see-monkey-do principle. The above views work for a handful of true cutting edge tech sector jobs and perhaps a random other company or two.

But your Cogs&Sprockets Inc. is not one of them. Not only that, but the top notch people that are acutely aware of all issues involved will not even give you a second look, because they know taking such a job brings nothing to resume. So not only do most companies eliminate potentially good workers who hit some misfortune, they also eliminate all the good people who want something more than paycheck the next day and no guarantees of anything more.