A torturous summer for the oft-tormented fans of British soccer power Arsenal came to a head on Saturday. Several players went down with injuries, one was sent off with a red card and the team lost, at home, 3-1, to a club that finished well below it in the standings last year. The fans responded with an entirely appropriate chant, directed straight at team management: "Spend some f---ing money."
Metaphor alert! Arsenal is the American job market, in a nutshell.
Arsenal is one of the handful of clubs that competes year-in and year-out for the Premier League title. Last year it finished fourth in the league, but fans looked toward this season with big hopes: The club had a lot of money to spend to hire new star players, and its managers promised to spend it.
Except, they didn't. Arsenal targeted several players but couldn't land any of them. Other teams acquired new stars, but in each case, Arsenal wasn't willing to pay the demanded price for big talent.
U.S. companies are acting a lot like Arsenal right now. They've got major cash on hand, and they're advertising a lot of job openings. But they're very slow to fill them. Many executives have argued, particularly to crowds in Washington, that this disconnect reflects a lack of skills in the American workforce: There's simply no one around who could possibly do the work they need done. Simple theories of supply and demand don't support that interpretation, however. If there really were a shortage of specific-skilled workers, and companies really needed to hire those workers to capture new revenues, then wages for those workers should skyrocket. That's true for a handful of American workers, but for most people -- even those with specific, in-demand skills -- wages have struggled to keep pace with inflation. Which means companies aren't having bidding wars for their services.
It's possible that U.S. companies, like Arsenal manager Arsene Wenger, just don't want to pay market-driven prices for talent because it seems like too much money. This tidbit about Wegner, from Sam Wallace in The Independent, is telling:
Well-placed sources have said that in private, when the possibility of Arsenal bidding for Robert Lewandowski has been raised this summer, Wenger tends to mention the time – unspecified – when he could have bought the Borussia Dortmund striker for £300,000. Like a man who regrets not buying an Islington townhouse in those long-distant days when you could pick one up for a song, it sounds like a pointless lament.
The difference between Arsenal and corporate America is pressure. The team's fans are howling at Wenger to spend his cash before soccer's window for acquiring players closes next month; they fear that if the team doesn't spend, it will lose out to other teams that did spend and thus fall in the standings.
U.S. companies aren't showing that sort of concern. Either that's a huge market failure -- every company is passing up the chance for more profits simply because it won't adjust wages to match the market -- or it's a sign that companies still don't see a lot of new demand in the economy, and thus no pressing need to add workers.