Home > A1, Learning > So many jobs, so few people…

So many jobs, so few people…

Economics is the study of choices and, more importantly, people’s choices.  Every day, people make the decision to eat at one restaurant instead of another, or to buy one item from a store instead of saving for something else.  Choices are made constantly, although their impact on our lives vary.  However, the consumer market is not the only place where people make choices.  People can also make decisions about what they wear or what kind of job they want.   People decide by weighing the costs and benefits of their actions.  Costs are what a person is willing to give up for the benefits of their decision.  The factors in making a decision for many people include wages, hours spent working, and how much they like the work.  Normally, how much they will get paid is the deciding factor, and enjoyment comes last.   But for Mary Healam, the wages aren’t as important.

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Mary works as a home health care aide, one of the fastest growing jobs in America.  With almost 2 million jobs and expecting to increase to 3 million by 2020, home health care is also one of the lowest paying despite the high demand from the baby boomer generation.  The sudden influx of health care patients has caused a severe demand for workers.  Yet they still get paid below minimum wage due to a loophole in the Fair Labor Standards Act of 1974. Before she worked as an aid, Mary worked at a department store, which according to her, paid more than her current job.  So why does she do it?  Mary states that the job is rewarding enough.  To her, the benefit of caring for the elderly outweighs the forgone income.

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Most people don’t see it that way.  For them, the most important factor is money.  If the job paid more, then more people would work as an aide.  There is already a shortage as it is, but with low income, fewer people are willing to do this job.  Only a small percentage find that the emotional and spiritual benefit outweigh the need for food stamps and Medicaid.  Other aides are usually minorities or foreigners.  This is one of the few jobs they can get with minimal training.  Additionally, many workers don’t work full time at this job becuase they have other jobs.   Even then, with many of the part-time aides, money is most important.  Mary Headlam is a rare person.  She goes against what drives so many people in the economy.  Whether it is buying the cheaper shirt or getting a higher paying job, the ultimate driving force is money and wealth.  Mary left her job at a department store, even though it paid more, because she didn’t enjoy it.  But most people are willing to give up their enjoyment as a cost of a higher paying job.

If the government raised the wages in healthcare jobs, more people would want the job and the shortage might go away.  But that isn’t likely to happen; the government can’t pay the Health Care Aides a higher wage so the shortage is still present.   It isn’t because of the demand created by the baby boomers, but because the government simply isn’t willing to pay more.  There are so many jobs, and so few people willing to commit that amount of  time and effort without  ‘material’ compensation; emotional satisfaction just isn’t enough.

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  1. March 18, 2013 at 7:47 am

    I think there is an interesting cost benefit aspect to evaluation of continual employment in the industry. The potential emotional and psychological benefits are theoretically large enough to offset the cost of continuously low wages in the minds of the workers themselves. The individuals employed by the industry engage in their own independent cost benefit analysis and those that choose to stay clearly believe that the monetary costs incurred are overshadowed by the overwhelming emotional benefits.

  2. Sadie, Abby, Reeve, and Andrew
    March 18, 2013 at 7:50 am

    When you’re talking about the shortage pay for the workers, you should talk about how if you increase the pay, then there will be a shortage of workers because they will not have enough money to pay each worker the same amount. They will have to lay off workers, and doing that is not what we look for in America.

  3. Anonymous
    March 18, 2013 at 8:55 am

    The “invisible hand” of the marketplace explains why home health aid is so cheap. The author argues that the reason aids are being paid so little is because of racism and women not being paid as much as men, but Adam Smith would argue that the marketplace is regulating itself through the “invisible hand” with competition and self-interest.

    The reason people choose to have a home health aid is because people weigh the costs and benefits of having a home health aid and decide that there is ultimately a benefit in having a home health aid. This shows self-interest because people decide that it is in their best interest to hire an aid for a low price. If the price were higher, the costs could outweigh the benefits of having an aid. If people were required to pay their aid $20 an hour and also pay for health care benefits, like the author is suggesting, then people would be a lot less likely to feel they want a health aid. Adam Smith would describe this as the “invisible hand” because the economy is regulating itself by supplying the demand for home health aids and increasing the want of the aids by making the price accessible for average-income people.

    There is competition in the industry because there is a demand for the home health aids, and the industries are finding people that are willing to work for such low wages in order to meet and raise the demand. Adam Smith would say that if the government got involved, then the prices would raise and the demand for these aids, which is so high right now, will lower. Like Val Halamadaris said in the article, “It’s going to increase costs, and it’s going to make things more difficult at all levels,”. The “invisible hand” is regulating these jobs through self-interest of people wanting home health care for less and competition because people are willing to work for these wages. (posted by SheaS)

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