THREAD: There's No "Great Resignation"
There's this idea that a post-pandemic "labor shortage," yielding wage inflation, is caused by disinterest in work.
A good example of the "paralysis of aggregates" I spoke of in this @Bloomberg podcast this week:
That's an easy snap judgment to arrive at when you correlate the malaise related to these 19 months of plague with the fact that, in the aggregate, millions of workers have, in fact, not yet returned to their jobs:
But if that is where you stop in your analysis you miss the underlying realities. First of all, we know where the unfilled jobs are - they are disproportionately in the low-wage/low-hours (read "low income") sectors. See the income levels below for guidance and bear with me:
Not all sectors have lost jobs since January 2020, and not all job losses, of course, are due to a lack of workers. In some sectors that have seen the highest levels of income growth (see professional and technical services), and a tight jobs market, there are more jobs now.
In fact by far the biggest winners of the $359 billion annualized bounty in increased household incomes to date have been in the two of the highest paid sectors (with a relatively lower propensity to spend what they earn - and therefore less of an impact on price inflation).
By contrast, there has been a pearl-clutching gasp about the PERCENTAGE increases in wages and incomes to workers in leisure and hospitality, retail, social assistance, admins etc. (orange dots - R axis) But expressed in dollars (blue bars - L axis) - um - not so much, eh?
And all that talk about elevated quits rates (JOLTS data)? Surprise, its mostly in the low income sectors that saw the high percentage changes as workers move from onw employer to another for better pay - just as you would expect them to do - not to go home and "lay flat."
So what about workers who haven't gone back yet? Have they thrown in the towel? Nope.
They simply don't have to go back to the lousy jobs on offer to them - YET.
They have the option to stay off their feet a little longer, a reasonable choice, but only for a few more weeks:
As with the prices of goods, distortions in the price of labor resulting from the post-pandemic reopening and the pandemic-era actions taken to rescue and preserve our households and enterprises, are unique and cannot be understood from data aggregates (or headlines).>>
And here's another riddle that comes from the @AtlantaFed wage tracker.
Who benefitted most from high percentage growth in wages?
16 to 24 year-olds disproportionately so!
As well as the unskilled and low income as discussed above.


More workers coming back.


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More from @DanielAlpert

2 Jul
Good Jobs Day everyone. Today we see if the slow pace of reduction in continuing (not initial) extended and supplemented unemployment claims is again reflected in the #BLS data for June. Estimates for job growth of ~600K private and ~700K total sound reasonable, but its dicey.
If we get a big jump in jobs, we should see a slump in wages as most of the jobs seeking worker are low-wage/low-hours jobs. And they are not likely the type to draw in people off the bench from either the unemployed OR those who have left the labor force:
#BLS Non-farm payrolls rise by 850,000
The U-3 unemployment rate remains at 5.9%
Read 15 tweets
4 Jun
Good Jobs Day morning! Hopefully we will see a renewed acceleration in the restoration of jobs during May. But after we dissect the data at 8:30am EDT. the remaining question will be which sectors still have not returned to prepandemic employment levels?
Answer: Mostly low income
We know that the re-employment gap is mostly in the low income sectors (below) because there are many workers receiving unemployment benefits exceeding incomes from their old jobs.
What we don't know is whether all their old jobs are really still there!
With the above as prologue, stay tuned for the data in 5 minutes....
Read 15 tweets
3 Jun
On @NPR @MorningEdition this morning with @NPRinskeep chatting about unemployment and my @nytopinion essay from yesterday...
...and here is a link to the @nytimes piece:
Americans Don’t Want to Return to Low Wage Jobs nyti.ms/2S1Jzbx
Continuing on the U.S. Employment front this morning, we just had a really good number out of #ADP of 978,000 jobs added in May. We'll see tomorrow if that squares with the #BLS numbers and offers a "catch-up" from the disappointing April data. But now, Unemployment Claims...
Read 8 tweets
19 Oct 20
Back in March, near the beginning of the US lockdown, I warned those predicting a US economic "supply shock," stemming the fall in exports by China not to count China out. That China would battle back with a vengeance,...
...using every tool at its disposal, including currency devaluation, industrial subsidies and household support - in addition to its overwhelming attack on #COVID19. I said then that China would be playing an aggressive game of economic "catch-up. >>
And China has done exactly that, with astounding success in terms of restoring growth to its economy:

"With Covid-19 Under Control, China’s Economy Surges Ahead" reported by @KeithBradsher
Read 14 tweets
13 Sep 20
Thank you, @andrewrsorkin, for compiling these - largely, appropriately critical - essays on Milton Friedman's work of a half century ago. But one critical argument is absent: The change in composition of share ownership over the past 50 years.>> nyti.ms/2GRaXTK
As Hyman Minsky wrote sometime after Friedman's disturbing exegesis on corporate capitalism, even by the 1970s - larger by magnitudes since - the shareholders for whom profits are being generated have become isolated from corporate governance/oversight by "money managers.">>
This "money manager capitalism" is not really focused on profits, but on values reflected in stock prices. Regardless of profitability, manager-intermediaries seek, at all costs, price gains that place them in a competitive, or at least equal, position with other managers.>>
Read 5 tweets
3 Apr 20
MARCH 12th - keep that date in mind this morning. We will have lots to talk about regarding the #BLS employment situation report at 8:30am EDT. But remember that the test date for "jobs day" data is the 12th of the month being reported. And March 12 was before the lock downs.>>
>>Consequently, today's Non-farm Payroll data won't come anywhere near reflecting the reality of the #COVID19 pandemic impact.
Nevertheless, will be back at 8:30 and expect to see a material, if early, loss of front line low-wage/low-hours - see why, here: jobqualityindex.com
#BLS #NFP Payrolls decline by 701,000 with the unemployment rate at 4.4. This is just the tip of the iceberg as the reference date for the data is the week ending March 13th, before the social and economic lock downs. But really bad.>>
Read 14 tweets

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