Why Don't We Pay People Enough? 8 Facts About America's Struggling Working People

[tclambert]

7. High unemployment means workers compete for jobs. We need businesses to compete for workers.

That happens at about 5% unemployment. Right now, we have multiple applicants for every job opening. Employers are duty bound to pick the applicant who will work for the least compensation. When unemployment falls below a certain threshold, each available worker has multiple job offers to choose from. THAT'S when workers get the upper hand, and can force a bidding war amongst prospective employers. If they want the job opening filled, they have to sweeten the offer with higher wages and better benefits.

Capitalism works better when businesses have to compete with each other, both for customers and for workers.