Strange Days Inside the Job Lines (w/Update)

(Update: Many thanks to M. Bouffant at Crooks&Liars to include this blog article in Mike's Blog Round-Up! Please visit the site and check out the vacation pics from Virginia!)

What with the ongoing COVID pandemic happening, and the power struggles between Blue America and Red America over masking and vaccines and everything else, the American economy seems to be chugging along at a normal pace... except that it's doing things that are freaking out the economists and setting off red flags that make no sense to them. This article from Derek Thompson in The Atlantic is one of the latest OMFG essays from the punditry trying to make sense out of nonsense:

Americans are buying more stuff than ever before. That’s good. But because of supply constraints, it can feel like there’s a painful shortage of just about everything. That’s bad. Economic growth is booming, but the president’s approval rating on the economy is falling, which is a historically odd juxtaposition. Businesses everywhere are struggling to fill jobs, which sounds bad, but employer pain is workers’ gain, and wages are rising, which is wonderful. But because prices are rising too, inflation-adjusted hourly-wage growth actually declined in September, which is not wonderful...

The great mystery of this moment is the labor shortage. America’s GDP is larger than it was in February 2020. But the total economy is down about 7 million workers. That’s akin to the entire labor force of Pennsylvania sitting on the sidelines. In September, the number of people working or actively looking for work mysteriously declined, which is not what you would expect to see in a rapidly growing economy with simmering inflation. Wages are rising. Job openings are everywhere. But we’re running out of people who seem to want a job right now...

This seems to be the thing at the crux.

Thompson tries to go through the usual list of suspects: The reality we're still in a pandemic where a majority of Americans don't WANT to go into a workforce that would expose them to COVID, and the ghoulish realization that the 700,000 (and going) deaths in the United States put a dent in that workforce is another likelihood. That's not even counting the hundreds of thousands of Americans suffering from the long-term effects of COVID that could well keep them out of employment. 

But Thompson thinks that's not enough of a reason: The numbers of vacancies (7 million) don't match up to the COVID numbers (a tenth of that). So he goes pointing to a potential solution with the financial aid packages passed in 2020 and early 2021 that eased money woes for much of the working class:

The most complete explanation is that the massive fiscal-policy response to the pandemic reduced the urgency of looking for work. The United States has spent trillions of dollars to help families get through the economic deep freeze, via stimulus checks, expanded unemployment benefits, and the moratorium on student-loan interest payments. National eviction bans have taken pressure off renters. Then there’s the record-high surge in savings among families who haven’t gone on vacation or splurged on experiences in more than a year. Add to that the fact that job openings have hit record highs—which means people know that if they wait a month or three, there will still be jobs aplenty to apply to. Seeing this whole picture, more Americans clearly feel like they can take a more leisurely approach to going back to work...

Except that might not be it. The stimulus checks were nice but they barely took care of two-three months' worth of rent, and the most recent checks were back in March/April of this year. The moratorium of student-loan payments doesn't cover the entire population that's still avoiding the open job market. The eviction bans ended during this summer, and the rental aid meant for those families are backlogged by state bureaucracies. Those expanded unemployment benefits might still be helping out in Blue states, but many Red states had cut back on those benefits in a mad attempt to force people back into the workplaces (guess what, didn't work).

What might really be at work (for lack of workers) here is the shift in workplace realities. The ability to work from home for half our households seemed to have convinced two-income families they didn't have to sacrifice to the demands of businesses to commute, waste nine hours in a cubicle, and then struggle to race home to deal with latch-key children stressing over schoolwork (from Thompson's earlier article about the fall of office space):

If the past year and a half has taught us anything, it’s that white-collar workers can do hard work from home just about as well as they can do it in the office—and maybe even better, precisely because their colleagues aren’t interrupting them...

For a decade or more, productivity experts have been telling us that cross-group collaboration and weak ties are the skeleton key to unlocking radical creativity... This sounds like a loud endorsement of the office. But the internet does all of this at a much larger scale than any office floor... What’s more, if today’s corporate conventional wisdom were true, the pandemic would have created a hellscape for productivity. Instead, corporate earnings are rising, wages are rising, and official measures of productivity are rising too, in practically every state...

This points to the possibility that a lot of workers - many of them part-timers who held two jobs at the same time - want to stick with the at-home jobs that may have well paid better with fewer expenses that would have necessitated those second jobs. I'd love to see if anyone's done surveys on how many part-time employees before 2020 - those who juggled multiple jobs - decided to just stick to one job during/after the pandemic and found they did well enough financially to not seek a second.

There is also the possibility that the pandemic forced a number of workers to find alternatives to the established job markets by going into self-employment. Monetization of performing arts, creative arts, crafts - all things you can do from home and upload to the Internet, hello TikTok! - seemed to increase during the pandemic, and a lot of that from the younger populations that would otherwise fill those job vacancies.

There is one other thing that would explain the jobs gap, and Thompson points it out a little later in his article: The United States is seeing a gap in the workforce numbers due to the decrease in immigration that would have filled those jobs under normal circumstances. As he notes:

Whether or not today’s worker revolt becomes tomorrow’s worker revolution, what’s abundantly clear is that America needs more workers. America’s prime-age population stopped growing more than a decade ago, and because of declining fertility rates, it’s unlikely to recover through natural growth alone. If the U.S. needs more workers, the arithmetic is straightforward: We need more immigrants.

Welcoming immigrants is more complicated than putting up a help wanted sign at the border. Democrats are looking for ways to expand legal immigration—a matter of moral and long-term economic urgency—while avoiding a xenophobic backlash from the right. One great way to do this would be to “recapture” surplus permanent-residency visas, or green cards, that went unclaimed in previous years. Since 1992, hundreds of thousands of green cards authorized by Congress have not been issued because of administrative hiccups; last year, unused green cards reached a record high...

I wouldn't call it a hiccup: The pile-up of unused green cards was due to an overall lack of travel due to COVID restrictions, but before that the unused green cards was a policy decision by trump's anti-immigrant agenda. That's been 4 years already of the Trumpian Far Right putting the screws to a jobs market seeing dwindling population numbers before the pandemic hit. We're just now seeing the results of that.

Whether or not this screwy jobs market gets straightened out, there ought to be honest benefits out of this long-term: desperate corporations and businesses realizing that their decades-long refusal to pay workers better is going to have to end, and they're going to have to start paying Americans - and any immigrants still wishing to move here - better if they want those jobs to get done.