Thread by @DianeSwonk

The gap between the supply and the demand for workers is actually quite stunning. Work done by my friends at @indeed show their job postings up more than 50% in first two weeks of Nov from Feb 2020. They estimate that translates to 11.2 million job openings, another record.

The most recent official data on job openings showed a slowdown during Delta wave but still stunning 10.4M end of Sept.

Now, let’s look at labor supply issues.

We had 7.4M workers actively looking for work in Oct, plus 1M (at least on sidelines that would like to work.)

We are uncertain about the shadow supply of workers - those who will return over time as the fear of contagion abates and schools stay open (quarantines upend what little support too many parents have to work). Women r key to participation - have been for decades.

Multiple job holders had begun to move back up but still down by 1M since Feb 2020. More a testimony to how bad things still were for lowest wage workers even during best of last expansion than how good it is today. Would be good if wages ⬆️ to limit juggling multiple jobs.

Retirees have surged - some signs oldest (over 65) may be coming back with boosters and need to work in Oct. BUT, net worth has soared with more gains for more people. Unlike wake of 2008-09 recession, home values along with financial assets have soared - big shift.

Employers need to rethink how they cast net for workers - stem age discrimination among other biases. We need all hands on deck.

@KansasCityFed & @stlouisfed both estimates excess retirements - those above the precrisis baby boom trend. Results staggering…

Moved up from 2.1M in June to 3M in Aug, most recent data. A lot of burnout and pandemic fatigue in there as well. Health care workers have really suffered but not only group. We have people w/COVID & understaffing which is overwhelming those who are working.

Those out sick who were employed surged again during Delta wave - up from ~ 950k avg in 2019 to above 1.5M during Delta wave. Long haul COVID affecting ab 1.3M according to doc at @MayoClinic; @aaronsojourner says the household pulse data for labor force is ab 600k.

That is before we think about those who want to return to work but were sick due to COVID. Or those were lost. Sadly, heard anecdotes from an economist in lumber industry that COVID deaths at mills in South exacerbated labor shortages over summer. Hard.

Then there is the loss in immigration, which fell precipitously 2016-2019 and the fell further w/pandemic. This is one of the major reasons labor force growth has slowed to a virtual standstill even as demand for workers surged.

Finally, we lost educational attainment from grade school to university grads as schools went on line - dropouts and those who deferred finishing degrees rose. Hardest hit were rural and urban students in areas w/o broadband or equipment to access. This is wound need to heal.

Other issues: rising prices at pump and higher commute costs limit job search & further separate workers from making to where the jobs are. They also lack broadband and electronics to apply online, where the jobs are now listed.

How do we close the gap? Wages ⬆️, boost participation & ease return to work, boost immigration & productivity growth to absorb higher wages with out triggering wage-price spiral in inflation.

The push to automate has intensified. Will likely displace workers & end up with…

More employment concentrated at tech savvy retail behemoths. Notable major pharmacy announced plans to close 300 stores and digitize this week.

Pandemic accelerated the trend of employment being concentrated in those large firms. Makes it harder for small & midsize to compete.

We also know from various surveys that retention of workers goes beyond wages. Millennials and Gen Z want firms who walk the talk on ESG - environment, social issues & governance. They will and can walk if firms don’t deliver.

Millennials were hardest hit by blow to earnings potential and under employment - despite most educated generation - by graduating into Great Recession of 2008-09. They finally have an opportunity to make a change that better suits them.

Women out attained educational attainment of men in Millennials. Pandemic accelerated tend in Gen Z. Almost 60% of college grads are now women.

College educated women w school age children and people of color less inclined to return to offices.

BUT, we also know that managers that are more empathetic to unique challenges women and people of color face also have much more loyalty and higher retention rates.

Work done by @ChicagoBooth & @Stanford surveying 20k workers since May 2020 shows that people are uncomfortable..

when their coworker are not same gender, race, political beliefs etc.

But heard @AdamMGrant give great talk on how it is in that discomfort that decision making improves. Diverse groups have better quality decisions but don’t realize it because the process was harder.

Just showing up as a less represented group changes they dynamics of decisions for the better.

That somehow made me feel validated at how hard it was to be an outlier among my coworkers much of my career and made me feel better ab the effort it took.

I will end paraphrasing a tweet from @jasonfurman when he looked at inflation last weekend. The only precedent for what we are seeing now in the labor market is 2021.