Thread by @DianeSwonk

Some thoughts on the labor shortages and some gaps emerging btwn employer & workers.

Research done during the pandemic shows that subsidies & stimulus checks were a modest hurdle to searching for a job. Other factors - illness, care of others, fear were much larger.

But, hard to say this behavior is linear. Over time, loss of supplements & UI much more costly. Long-term unemployed are typically the hardest to reemploy but is encouraging that employment data reveals a drop in the long-term unemployed. We are tapping some of that pool.

Also, notable @aaronsojourner analysis of the household pulse survey, which is shows a major shift between September and peak Delta wave and October. One thing holding workers back in Sept large # of people caring for sick or ill themselves. Dissipated in early Oct.

The ranks of those caring for school-age children fell as schools reopened in Sept, even though the process was rocky with a lot of quarantines. CDC pushing to test to keep kids in school instead of quarantine. Not used testing enough to keep people safe, while reopening.

We saw ranks of those who were ill and couldn’t work swell during Delta. Many of those workers are hourly workers who would not have shown up on payrolls when sick but could return and show up in October. Long haul COVID is issue we have yet to grapple with or fully understand.

Another hurdle we have yet to really deal with is mental health of workforce. This is a real issue we have seen cause search hurdles and physical problems in research on workers who lost jobs in past. Dan Sullivan at @ChicagoFed did some great work on this.

Many workers who lost initial jobs thought this would be temporary; it was not. Now they have to find new employers. That is a much heavier lift, especially given tech and mobility hurdles. Jobs listed on line harder for someone w/o broadband or good equipment to apply for.

Surging prices at pump, for used vehicles & now insurance further mucks up mobility. The commute costs alone can wipe out the boost to wages in many low wage jobs. Saw this in early 2010s. Clients reported workers couldn’t afford promo to manager bc of surging pump prices wiped.

The surge in wages at the low end of the wage strata is being driven by tech savvy large mostly retail behemoths who have the tech to leverage and justify wage gains. Many smaller and midsize firms can’t compete.

First time seen manufacturers compete w retailers.

Yet, the labor market is showing signs of extreme shortages and tightness. Wages are accelerating & quit rates have soared. Surveys show workers (half or more) are reassessing work/life balance. Not sure how durable trend is. Could change as workers get reconnected w/employers.

Participation lagging but that is not unusual & could be shifting if @aaronsojourner analysis of household pulse data shows up in larger employment reports. Still could take a while to bring workers back into fold.

Retirees haven’t returned as they did in the past. This could reverse.

Vaccine hesitant workers say they will quit if mandated to get a vaccine but actions speak louder than words. Turns out very few do. Also, quit rates highest in jobs contagion risks highest.

Immigration loss another blow to supply side of labor force. Fell precipitously (mostly legal) 2016-19. Hit a wall during pandemic. Creeping higher, mostly students returning but still thin. Immigrants often fill jobs native born won’t.

Move to online also curbed educational attainment and limited pool of workers who were grads and could apply for jobs. Women were more resilient in college online and now make up ~ 60% college grads. What does your interview pool look like?

Wage gains for low wage workers being driven by surge in wages at tech savvy retail behemoths. This is making it much harder for existing small and midsize firms to compete. They lack the tech to absorb wage costs. Large tech savvy firms also most likely to automate.

Big gaps emerging between what employer & workers desires w to hybrid work-from-home models. All workers at all pay levels want some flex to work from home. Employers more willing to give latitude to highest paid employees. This is despite rise in productivity w WFH.

College-ed women w/school-age kids & people of color want most flexibility to WFH. Asked researchers why. “People enjoy interactions with coworkers *less* when more than 90% of them are of a different gender, different age group…or different racial/ethnic group.” Diversify.