They say "labor shortage" like it's a bad thing.
"America's labor shortage is approaching epidemic proportions, and it could be employers who end up paying," CNBC reported this week. That was before yet another monthly jobs report showing solid growth in jobs and wages.
I always find this framing to be backward. A "labor shortage" is good news: It means it's easier for unemployed people to find jobs, more appealing for people who quit the workforce out of frustration to get back in, and likelier that companies will decide they must pay higher wages to attract talent.
In theory, we could reach a point where upward wage pressure led to an inflationary spiral, with companies raising prices so they can afford to pay higher wages, and those higher prices eating up much of the wage increases. But we're far from that point, with corporate profits still high as a share of the economy.
For now, the "labor shortage" is very good news for workers, and we should root for it to continue.
In a "labor shortage," two key human capital problems in the economy start to fix themselves.