Thread by @SeanCasten

Good data confirming what everyone who wasn't trying to politicize economic data already knew. Brief thread:

https://twitter.com/GregDaco/status/1441227659183214592

1/ First to state the obvious. If $300/week with no benefits that expires in September is a better deal that your current job... your employer is taking advantage of you.

2/ But beyond that there are two numbers to watch: unemployment rate and workforce participation. The 1st measures the # out of work divided by those looking for work. The 2nd is those in or looking for work divided by working age population.

3/ The unemployment rate went from 3.5% pre covid to nearly 10% and is now back around 6. Workforce participation went from 63% to 61% and hasn't budged since. Eg, the demoninator in UR is still way too low, depressing the apparent rate.

4/ A big driver of the initial drop in workforce participation was retiring boomers. They were at retirement age but still working. COVID convinced them to fully retire. Think about your office and you probably know a few.

5/ The 2nd cohort was women with kids. The childcare industry collapsed during COVID for health reasons and because the pay for childcare is abysmal. Caretakers prioritized their families over other people's kids. Many have now moved to other jobs with better pay

6/ That means lots of former dual-income households now have one parent who has to stay home because they have no other way to look after kids. More often than not, that falls to moms.

7/ So boomer retirement + women without childcare options explains most of the drop in workforce participation and the drop in workforce participation explains most of the slow growth in labor markets.

8/ There's little we can do about boomer retirement. But we can change the policy environment to address the childcare issues. The Build Back Better plan we are trying to get thru the Senate includes 2 years of government funded pre-K.

9/ It also makes the child tax credits we passed earlier this year (that check you've been receiving from the IRS each month if you have kids) permanent, to provide more financial options for parents

10/ None of this is news to apolitical economists. Hopefully we can now stop getting distracted by those who sought to lie and mislead by making this about unemployment insurance. /fin