Thread by @jnordvig

The piece by @DanielAlpert got me thinking a bit about US exceptionalism, as it pertains to the labor market, and the role the unemployment benefits may play.

Which country stands out in this chart?

=> some observations on income distribution and labor supply...

This is simply OECD data that tell you what percentage of jobs is less than 2/3 of median earnings.

The US is 23.4%
Belgium,N.Zealand,Finland,Italy,Denmark,Portugal all <10%

The US has an awful lot of low paying jobs (in a relative sense, but also relative to cost of living)

You can argue. 'but US is a wealthy country, and if the median is high...'. But what about the food stamps then. They would not be needed if the absolute level was fine.

=> it is both a relative and absolute issue.

Clearly, the medium wage level itself matters to the interpretation. But the bottom line is that the US has a very high proportion of very low paid jobs. And the supply issue that the US may be facing at the moment, may be a much bigger issue in the US than many other countries.

Here is a link to @DanielAlpert NYT op-ed. If nothing else, it raises the question about US exceptionalism, and the power of stimulus.

US stimulus (the size of it at least) is often the envy of the world. But could it backfire?

nytimes.com/2021/06/01/opi…

The basic idea behind current economic policy is to run the economy hot, and create lots of job opportunities, and boost labor supply, and support growth (and equality) that way. But what if the nature of the stimulus & structure of the labor market, is such that supply falls!

It is something to think hard about, and if the issue is real, it would create a type of 'reverse US exceptionalism' in coming months potentially.

I will leave at that for now (probably more to come). Feedback welcome, as I want to think about this a great deal.

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