I Know Exactly Where the Workers Went.

I know exactly where the workers went. I could have raised the wage and stopped them. I did not. Josette is a grandmother on the pecan sheller deck I own outside Albany, Georgia. She has fed in-shell pecans into sheller 2 for 11 years and 4 months. The machine cracks 46 nuts a minute and throws the shell back at her at 98 decibels, 6 hours a shift, 5 shifts a week. The pecans in your cabinet at Thanksgiving. The praline you bought at the bakery counter in March. Her hearing has been going out at $15.60 an hour for 11 years. I keep the margin between what her ears are worth to me and what they cost her, and the gap is small enough that I have never once had to look at it. You bought the bag at the Ingles and carried it home. The wall that would have saved her ears was never going to be in your bag. It was going to be in my ledger. It isn’t in my ledger. The Lord gives the harvest; I give the shift schedule.

James Freeman wrote in the Wall Street Journal this morning that the employers surveyed for the National Federation of Independent Business’s monthly jobs report can’t find people who are, in his phrase, ready, willing, and able to work, and that Chief Economist William Dunkelberg’s reading of the survey is that the difficulty of finding potential employees remains acute. He closes by suggesting that Washington enable more legal migration. I’d like to answer the question those employers are asking, because I’m one of them. It isn’t where they went. Anybody can find where they went. The question is what you’d have to pay to keep them, and the answer is not $15.60. I’ll show you what happens when a man answers that question out loud.

You’ve been told, kindly, by people who genuinely mean you well, that a labor shortage is a sign that workers are doing better. It’s a comfortable story. You’re old enough to drop it. Let me put the numbers where you can see them instead.

The Occupational Safety and Health Administration puts the ceiling for a man’s 8-hour day at 90 decibels and wants a hearing conservation program at 85. My deck runs at 98. I’ve never had an inspector on that deck at the hour the shellers run, and I don’t intend to have one. To silence the deck I’d need acoustic enclosures around 3 machines. The quote was $41,300 installed, first in 2023, again in June. I declined it both times. The plugs Josette wears she buys herself at the Walmart on Clark Avenue: $8.99 for 200 pairs. That’s $0.04495 a pair, and she pays every one of them.

In March she took the audiogram I’m required to give her, in the trailer, at the plant’s expense. The audiologist on Dawson Road found a 34-decibel loss at 4,000 hertz, both ears. He recommended hearing aids. $2,650 a pair. She hasn’t bought them. Her granddaughter is 6, and 6-year-olds whisper everything, because whispering is what excitement sounds like to them. Josette has started asking the girl to stop whispering.

Take this slowly. The $41,300 I didn’t spend bought the 3-phase panel on the deck at $18,700, the gate at the driveway at $2,400, and the rest sits in an account paying 4.3%, which I mention only so you know where the wall went. It went where everything I decline goes. What I’m proudest of is that for 11 years I never had to have the conversation about the wall at all, because a decision that never appears on a purchase order never appears in a meeting either.

Marquis is Josette with an agency badge and 41 days on the clock. Same deck, one rung lower, and the rung is simply that nobody is obliged to count his ears. The audiometric program is mine. The audiogram costs $16. Marquis belongs to the staffing agency, so I don’t spend it. He’s 24. He’ll be 24 and 41 days old for about 3 more weeks, and then somebody else will stand at the shell.

Pull back with me for a moment, because this part isn’t about my building. I am not a peculiar man. I am a curriculum. I’ve taught the priced week for 30 years, 31 graduating classes, most of them in the building in Richmond you already know. Two of those students price labor for the distribution center 6 miles up the road that has been hiring off my deck since June. One of them told me at a banquet in April that her firm just collects what mine is finished with. She meant it as a compliment. I have thought about that sentence more often than I’ve thought about anything anyone has ever said to me, and I have never once been able to hear it the way she meant it. Another priced a wage decision last year for 400,000 employees and sent me the memo. He did it in 4 minutes on a Tuesday. I took 40 years to get where he got in 4 minutes, and that is the only thing I am proud of that has nothing to do with the margin.

The principle is simple, and the deck is only where I learned it. A labor shortage is not an absence of workers. It’s a price discovery mechanism, and I have spent 30 years making sure the price gets discovered on somebody else’s floor. The wage is not a fact about workers. It is a fact about me, and about the men I have trained, and the shortage is the wage doing precisely what it was built to do: leaving the work unfilled at a price I have decided not to pay, and calling the unfilled work a mystery. Mr. Freeman has written a good column about a price he has decided to call a scarcity of people. I have the workers I am willing to pay for. None of this began at my building either. The first man to put a number on another man’s week found the number I find, and he found it before there were spreadsheets or a federation of small businesses to poll about it. He wrote down his method, and it was better than mine, because he didn’t need to explain it to anyone.

“The ox knoweth his owner, and the ass his master’s crib: but Israel doth not know, my people doth not consider.” — Isaiah 1:3, King James Version

The ox knows where the trough is. That is the entire staffing model, handed down to me and never once improved upon. A man who knows his trough doesn’t wander, and a trough doesn’t have to justify itself. The men who left my deck in June knew their trough better than the ox does. Mine ran $15.60. The one up the road runs $21.75, mows its own lot, and hands out the plugs at the door. They went. I don’t call that betrayal. I call it the first lesson in the course, taught to them for free by somebody with a payroll.

I’m told the harvest may come in 9 days late this year. 9 days is weather. Weather is not my department. I have 9 open positions and the strongest deck output in the history of this building. The workers did not go somewhere. They went past my gate, and they went past it because the number at my gate is $15.60, and I have not moved it, and I am not going to.

Slowly.

“Sell the worn-out oxen, the blemished cattle, the blemished sheep, the wool, the hides, the old wagon, the old iron tools, the old slave, the sickly slave, and whatever else is superfluous.” — Cato the Elder, De Agri Cultura, Book I, section 56

He was not writing about cruelty. He was writing about maintenance. I assign that chapter in week 6, and the room goes quiet, and then they take out their pencils. He wrote the instruction down 2,180 years ago, and it has not been improved upon, and the men who read it in my classroom go on to run operations you buy from every week, and they do not flinch when they read it, because I have cured them of flinching by October.

Now the e-waste recovery yard I own outside Camden, Arkansas, where the same arithmetic has a different face. Renata is a hand on the board-stripping line. Server boards come off the racks of the companies that hold your photographs, your mortgage statements, the tax documents your accountant filed from a machine two buildings from her bench. The boards arrive by the pound. She strips 400 pounds of them in a shift: heatsinks off, capacitors clipped, boards broken down to metal and dust. She earns $11.20 an hour to do it. I have not raised that number in 26 months. The metal she pulls off 400 pounds is worth $4.11 to me at this month’s prices. The Lord counts the years; I count the pounds.

Her respirator is a $2.15 paper dust mask she buys at the hardware store in Camden, because the cartridge program I refuse to run would cost $3.85 a shift per hand across 11 hands. That is $10,587.50 a year I have not spent on the air inside my own building. The $4.11 of gold she gives me in a shift buys a used tire for my truck. She gave me her notice on Thursday. I approved it in 4 minutes.

Marisol strips the same boards through a staffing agency at $12.60 an hour. She was gone in 6 weeks. Her going is what somebody counts when they write the word shortage. The agency fee lands on the same line as the mask, and the fee is cheaper than the benefit, and the line runs at 86% of capacity, and the capacity is mine to underwrite and hers to walk out of.

There is a photograph in the cloud of Renata and her daughter, 9, at a lake in June. Somewhere in February, the board that held that photograph crossed Renata’s bench, and she stripped it, and it was worth $4.11 of metal, and neither of us asked which board it was. The quarterly report closed at 22%. I don’t need to look any further into it.

The next hand starts Monday at $11.20. She is 22. She asked, in her second interview, what kind of mask the yard provides. I told her the yard does not prohibit one, which is true. That is the answer a man who has trained himself not to flinch gives to the only question worth asking, and it is honest, and it is the last honest thing about it.

The Lord counts the years. I count the pounds. Have a good week.

Sterling A. Varice holds the Hayek-Friedman Chair and serves as Dean of Instruction at Warden University’s College of Business and Economics in Richmond, Virginia. He is the author of three textbooks: Divine Mandates for Labor Utilization, Social Obligations for Profit Maximization, and Calibrated Deprivation: A Manager’s Guide to Employee Motivation.