The Boy Who Cried Talent Shortage

Talent shortage is the new brain drain. Both cries justify an all out effort to retain graduates. Like brain drain, what if there isn't a talent shortage? In Pittsburgh, talent glut has long seemed more appropriate. Via Brian Kelsey, a similar situation exists in Austin:

Employers like Austin because every year our universities turn out tens of thousands of bright minds. Many graduating students don’t want to move away from the Austin area. This is the biggest reason employers are moving here. We also have a disproportionate number of residents with advanced degrees, many of whom accept lower paying jobs rather than move away.

Employers like Pittsburgh for the very same reason. I have first hand experience of the same thing going on in Boulder. This depresses wages. Worse for workers in Austin, the talent keeps coming. That's bad news for a tech firm in Chicago. Talent shortage!

How much does a company have to offer to get a graduate to leave Austin or convince someone not to move to Cool City Austin? Too dear and that company is better off relocating to Austin. Aaron Renn (The Urbanophile) tries to broaden the conversation:

Perhaps today’s models work in a certain sense, but if there isn’t the labor force to staff them, then maybe that model needs to be rethought. Perhaps we do need to raise more capital and be open to hiring from a broader pool of people, for example.

We have a labor market obsessed with low-hanging fruit. Talent supply gets a bit tight and companies start shouting, "Talent shortage!" Meanwhile, some PhD is bagging groceries at the Boulder King Soopers. But what good is a doctorate in Medieval Chinese Literature? What about all those MLS graduates whom Borders just laid off? Nope, none of them are software engineers.

It's an embarrassment of riches that lends itself to blaming a lack of experienced startup executive talent for a retarded entrepreneurial ecosystem. We could do a lot more with the people already living there. That hasn't been necessary. I doubt we are on the cusp of a crisis.

We aren't very good at labor mobility. We haven't had to try. I see an opportunity to pull displaced talent into the 1099 economy. Rust Belt and rural communities, places off of the Creative Class map, should be ahead of this curve. To some extent, Pittsburgh is ahead the curve: Prosperity growth without population growth. Quality over quantity. Before you go that route, make sure you have figured out what to do with all those unemployed MLS graduates.