Market forces got the Mall of America’s workers Thanksgiving off and O/T on Black Friday
If you plan on going to the Mall of America today, you’re out of luck. As the Star Tribune reported recently,
The Mall of America’s gamble to stay closed on Thanksgiving Day last year seems to have paid off.
The nation’s biggest mall is doing it again this year, taking a prominent stand and giving the 15,000 employees who work at the mall the holiday off even while some other big-box stores and shopping centers will be open.
The Bloomington megamall also is going a step further this year by offering holiday pay on Black Friday to the 1,200 workers it directly employs. The gesture is another tool in the mall’s arsenal to improve employee retention in a tight labor market.
The upside of Minnesota’s ‘labor shortage’
In recent months, there has been much discussion in Minnesota over what to do about the state’s looming labor shortage, that ‘tight labor market’ the Strib talks about. We are told that this shortage of workers relative to the jobs available will stunt our state’s economic growth. A more liberal immigration policy is usually touted as the solution to this problem.
But, as I’ve written before,
In economics, if there is an excess of demand for labor over the supply of labor what that really means is an excess of demand over supply at the current wage. At a higher wage the two will be brought back into equilibrium. More bluntly, one of the later speakers quoted Minneapolis Fed head Neel Kashkari, who recently said “If you’re not raising wages, then it just sounds like whining”
As I’ve also written before,
We have heard a lot recently about how costs of living are rising, wages aren’t keeping up, and people are increasingly struggling to get by. Well, here are the economic processes in action which will work to alleviate such problems. As crises go, this one is pretty un-crisis-y.
Contrary to much myth, free markets do have mechanisms to raise earnings. When wage rises are decreed by government, some workers lose out to pay for it. But when those higher wages come from market forces and the competition between firms for labor, we can all get better off.
John Phelan is an economist at Center of the American Experiment.