Labor Supply and Demand
By Arnold Kling
About a year ago, the big story in our local suburban newspaper was the adoption of a “living wage” bill in our county. This summer, the big story was the shortage of teenage jobs here. I was tempted to write a letter to the editor suggesting that one could connect the dots.
Ed Tinsley, the CEO of a restaurant chain, has written about how the “living wage” enacted in Santa Fe affects his business decisions.
While I truly wanted to open a K-Bob’s in Santa Fe, the huge labor-cost hikes would force me to jack up prices to such unreasonable levels that I decided to stay out of town.
In another sign that the law of supply and demand is alive and well in the labor market, this article talks about the end of the teacher shortage.
The American Association for Employment in Education said preliminary results of its annual survey of hiring patterns indicate that demand for teachers has fallen for the second straight year and is at its lowest level since 1998.
The group’s executive director, B.J. Bryant, said the soft economy has meant more people willing to work for a teacher’s pay, and fewer jobs to go around. Instructors in a few subjects do remain tough to find – most notably math, bilingual education and all areas of science and special education, Bryant said.
For Discussion. If the excess supply of teachers were to persist, would it be fair to argue that teachers are overpaid?