In an economy screaming for labor, the data is becoming clearer, despite breathless media coverage to the contrary.
By Wolf Richter for WOLF STREET.
OK, it’s complicated, as they say, and the weekly unemployment claims data were never designed to be used as precision tracking tool. But it is important. So we’ll take a careful look to get beyond the noise.
Turns out, despite breathless media coverage to the contrary, ending the extra federal $300 a week in unemployment benefits, as over half the states have already done, is indeed encouraging more people to go back to work – in an economy that is screaming for labor.
For the US overall, “insured unemployment” or “continued claims” (number of people having claimed unemployment insurance for more than a week) dropped to 2.88 million in the current week, according to the Department of Labor this morning. It was the lowest since the employment crisis began in March 2020.
At the state-by-state level, “continued claims” can serve as a stand-in to find out if ending the extra $300 a week in federal benefits is encouraging people to go back to work.
To get beyond the noise…
Across the states there are large ups-and-downs from week to week, depending on how claims are processed and reported. But when it happens in the big states, it moves the national needle.
For example, in the reporting week ended July 24, continued claims in California jumped by 16% to 833,426. But in the following week, which was reported today, continued claims plunged by 30% to 577,056. Yet the labor market in California hasn’t changed much over those two weeks. The unevenness of processing and reporting the weekly claims causes this. It’s just noise.
To get beyond the noise, I compare the four-week moving average of “continued claims” among the 27 states that withdrew from the federal unemployment benefits (the Enders) to the “continued claims” among the states that maintained the federal benefits (the Keepers).
The first states that ended the federal unemployment benefits did so in mid-June. Texas and Florida, the biggies, withdrew on June 26. Other states followed in July. Some of the people that lost those federal benefits then got a job, at which point they stopped claiming unemployment benefits.
The typical time lag between starting to look for a job and the first day of work further delays the impact on unemployment benefits. But the first signs likely started cropping up in the “insured unemployment” data sometime after the reporting week through July 3.
The beginnings of a trend.
Since the reporting week of July 3, the 4-week moving average of “continued claims” fell by 10.1% (-107,000 continued claims) among the Enders, while it rose by a tad (+0.03% or +1,000 continued claims) among the Keepers.
In other words, 108,000 more people returned to work in states that ended the federal $300 a week (green) than in states that kept the extra $300 a week (red). Over the past two weeks, “continued claims” among the Enders dropped at a fairly sharp rate of 5.6% and 2.7% week-over-week:
Waiting for September 6.
The extra $300 a week in federal unemployment benefits along with other federal unemployment benefits will end for all states on September 6. And in the labor market, it should become visible over the latter part of September and in October.
Companies that have been clamoring to hire workers are feverishly waiting for these weeks in September to come around when they hope their search for labor to fill job openings will be met with greater interest. And today’s data indicates that many people, once the federal benefits run out, will indeed begin to rejoin the labor force.
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I guess all those pay raises will now go away come September as well.
There were pay raises in certain industries yet in others there weren’t any.
The upshot is those employers that needed someone had to pay up but those that could wait did.
No, they won’t. In the first place people are not going to look for jobs where they make less than the other employees. Second, rising inflation will, despite all the efforts of the Fed and big business, raise wages.
The losers will be those who stay in their current jobs and accept a COL wage increase based on the Fed’s inflationary rates (which are unrealistic). So what you’re going to see, and in fact are already seeing, is those who have a work ethic will move into new positions if only to keep up with inflation. This will add more force to the wage increase, as the companies will now be forced to hire less skilled people to replace them, and they may have to pay them more than the people they lost.
This will increase inflation.
The truly sad part of this is most people, to include the Fed, Congress, and most people under the age of 30 who’ve never lived thru an inflationary cycle, don’t appear to understand just how destructive this can be to the standard of living most of the USA enjoys. Retirees, who are an increasing percentage of the population, will become increasingly marginalized as their fixed income and investments are devalued. Wage earners will be forced to either move to where work is or face a decreasing quality of life as their money buys less. And those on the lower end of the scale who have been dependent on relatives for support will find that those funds are no longer forthcoming as those same relatives have fewer unallocated funds to spare.
Joe Biden reminds me every day of Jimmy Carter, and I dread having to live thru that again.
He is an FDR wantabe. FDR had some room to run as Fed government was small when he got started. Not that much left that government doesn’t already control.
FDR also had the advantage in that he didn’t have a huge underclass with no pride or work ethic that would surely take advantage of social programs.
Let’s get out the old WIN buttons for those who remember the 70’s
Whip inflation now.
Rob’t-dang, and all these years i wondered who, or what, ‘NIM’ was…
may we all find a better day.
and thankfully my 10% rent increases will sTILL take EFFEcT
Why not! It is all about supply and demand plus put the finger on the scale for the finance and real estate industry through tax “loopholes” and you get left holding the bag.
You’re a social predator. And bragging about it is unbelieveable.
My comment was meant to be snarky and cynical.
It wasn’t met to taken literally.
It’s simple. Our corrupt government which is filled with self-serving career politicians, and that includes the Congress, Fed, Treasury, etc., is the PROBLEM. Either they are all incredibly stupid and shortsighted and don’t recall even the most recent history, or this is all a well calculated and deliberate scheme to inflate away the debt by stealing by means of runaway inflation the life savings of those who have worked their fingers to the bone for every single dollar they still have left. Why else would you continue to incentivize people not to work and be unproductive when there are massive shortages everywhere? Ultimately, this will lead to mass starvation and massive unrest, but then that would effectively thin the herd which is something else they probably would like to see. Vote them all out and lock them all up. They are soulless criminals drunk with unchecked power.
Anyone who argues that giving people more money to sit at home than to work DOESN’T discourage work is either stupid, dishonest, or both.
People respond to incentives. They always have, and they always will. Look at the pictures of the houses in England with covered up windows to avoid the window tax, as an example.
And where does the low cost money to give people to stay at home come from? The Federal Reserve.
If the cost of borrowing was REAL, the game of borrowing free money to dole out would be prohibitive.
The Fed…who is promoting “max employment” provides the money to promote idleness.
Exactly. And that’s the fundamental flaw with the idea that the Fed can inflate our way out of the debt. For every $1 that is inflated away, $2 more is borrowed. It’s like trying to empty the ocean with a bucket.
Also, I wish the media would stop pretending that the Fed’s low cost of money comes from nowhere. No. What it does is comes from current holders of dollars. It steals from people, domestic and foreign, who have dollars.
Better analogy: they’re trying to empty the debt-ocean by pouring in more water with a firehose.
The truth is that mainstream media have become dishonest and that is why Wolf Street exists. When are you going to learn Wolf? The real money is in serving your corporate masters.
“The truth is that mainstream media have become dishonest”.
Thanks for putting in the number crunching work, Wolf.
The *uniform* story being excreted by the MSM is the exact opposite of your take.
But decades of the MSM being lying, manipulative bags of shit has taught me to begin with the assumption that the MSM are lying, manipulative bags of shit.
Still, it is nice when someone else puts in the work to confirm that the MSM are still lying, manipulative bags of shit.
The obscenity may offend some, but it pales to insignificance when measured against the obscenities that the MSM engage in every day…having done so for decades.
2021 MSM speak:
Prudent saving = hoarding cash
House price inflation = house price GROWTH
Yes, financial incentives work. Let’s review stock buybacks as the ultimate incentive for CEOs, Chairpersons of the Board, Boards Directors, Senior VPs and to a lesser extent stockholders.
Then lets look at the Cruise Line, Airlines industry, the banking sector and every other private sector entity that has passed on the excessive wages and bonuses as well as dividends of those that manage those and are recipient leaches onto the American taxpayer.
You are chasing the wrong fraudster IMHO.
LeftWestCoaster: “Let’s review stock buybacks as the ultimate incentive for CEOs, Chairpersons of the Board, Boards Directors, Senior VPs and to a lesser extent stockholders.”
Yes, because of the current buyback laws and other events, these people have gotten a lot of the money in the economy. In fact, this is what allows the “zombie” companies, and even places like Amazon to continue in their businesses!
I think it is one of those things that will “stop when it stops”. At some point if we get a longer bear market, and/or a slower stock market recovery, this will cease to be possible. I have no idea when that happens. Maybe not in my lifetime.
But, paying for something will get you more of it, e.g. paying people not to work will get you unemployment.
And all of that is reliant to a large degree on the credit bubble and Fed monetary policy.
It’s not the wrong fraudster. They’re both symptoms of the same disease.
Don’t forget how the politicians used medical tyranny and fear mongering to obtain previously unimagined powers, then cratered the economy and filled up the hole with trillions that they then got to dole out to all their freinds. Billionaires , millionaires, and sketchy vaccine companies were the big winners, not the former Uber driver who got an extra $300 a week.
“Anyone who argues that giving people more money to sit at home than to work DOESN’T discourage work is either stupid, dishonest, or both.”
Are you saying that basic human nature alone proves how incredibly stupid the idea of Universal Basic Income is and, for that matter, all collectivist utopia schemes? I’m shocked, shocked I tell you!
What happens when half a dozen men can run a car factory?
Automation is not the issue, you are focusing on a problem that doesn’t exist. We currently have an artificial labor shortage.
People want to work. They may gripe and complain about it, and talk about how great Friday is and what a dread thing Monday is, but look at people in retirement: often times the lack of work is what kills them. They just can’t fill the hours of the day.
That’s the crux of it. The artist and the thinker can occupy himself endlessly with diverting topics and fascinating arcs off his projects and his thinking. But the average IQ 100 man needs work in order to function. His life is his livelihood, in other words.
There are constant predictions that robots and Artificial Intelligence will usher in a work-less age. I predict great crime and high suicide rates and social disturbances if this ever happens. Even Bill Clinton agreed that work was a necessity, and he was a Centrist Left-Winger.
Taking people off welfare is not a crime. It invigorates their life and provides purpose and meaning to existence. You don’t have to be a French existentialist to be a nihilist; but to be an optimist you pretty much have to work.
“…but look at people in retirement: often times the lack of work is what kills them.”
How do you know that? You should provide some data from lifespan research on the elderly. From what I remember in teaching the subject, blue collar workers tend to want to retire earlier because their type of work has worn out their physical bodies more than professionals.
Also, according to research general happiness peaks after retirement age. People are most unhappy around age 45 – when they are working.
Personally, at 70, I have a lot to do around the property I live on. Currently I’m clearing and draining the swamp (literally, it’s a tropical environment) in the adjoining property that the owner has left untended, so my wife can do some vegetable and fruit farming. If I wasn’t kept so busy, I would do more cooking and increase my exercise routines. Just reading Wolfstreet takes some time out of my daily task routines.
I thought I might do some part-time work after retirement. But now that I’m retired – NO WAY. Work environments are too toxic, especially in America. I think a lot of people would agree with me.
and I’m in (1st time) 50+ community were I’m youngin
I say 4 letter word = W O R K and they pull out their little pitty patters
besides the smirk/laugh at me = ‘sucker’
will continue to due what I have to – tic toc goes exponential debt clock
What you’re describing is “work”. Draining a swamp, cooking, farming. Those take effort with a purpose, and produce a positive reward.
Just because it’s not being paid by an employer doesn’t make it not-work.
So I think you’re actually more in agreement with catxman than you think. People need to be doing something productive and useful to have a purposeful, meaningful life.
Agree with you cat:
At 77, many of my former coworkers who ”retired” planning only to golf or fish, and with plenty of money to do so, died soon/quickly with no clear medical reason according to their surviving family(s); all of them had been go-getters and were bored.
I ” retired early ” twice previous to finally deciding just to stay home to tend my garden per Voltaire/Burroughs in Candide/Candy at 75, and to do my best to give what support I am able to spouse caring for 90+ mom as long as my support is a net benefit…
Being part of the commentariat on here and other sites with international commenters is a ton of fun too, that’s far shore.
Bottom line is that most folks work because they want to work,,, and even though many have taken advantage of the recent freebies, just as I did when young, most folks will continue to work.
“They just can’t fill the hours of the day.”
That’s where highly educational hobbies and an autodidactic tendency come in.
Winston, very true, but in my lifetime have been very curious about what appears to be a seemingly-low level of daily curiosity about the world we live in in the general population (Wolf’s site and commenters always a refreshing oasis in this semidesert)…
may we all find a better day.
“Taking people off welfare is not a crime. It invigorates their life and provides purpose and meaning to existence.”
Correct. Making a permanent welfare state expectation destroys a part of the society/humanity in people. The trick is finding the line between help in an emergency and “help” forever/permanent welfare.
Very important point IMHO wkin!
Been there and done that when blinded by accident and follow up dis ease, the latter directly after first born arrived:::
I hated the entire welfare ”deal” at that time, and took the hardest manual labor work in my 60+ years career asap when the dis ease was cured, because that was the work available at that time and place and was enough to get us off the welfare…
Turned out to be the best Physical Therapy I could have gotten, working on slopes to 60 degrees, using a chain saw while also carrying lunch, fire extinguisher and shovel and spare chains and gas and oil and tools for saw, etc…
Probably set me up for the next 50 years or so in spite of my missing personal parts, etc.
Had a retired neighbor growing up that used to rake our hay every summer. One summer he could no longer drive a tractor that long… died the next winter because he had nothing left to look forward to doing.
It’s a guilt trip, Inculcated by centuries of religious belief where reward had to be earned to be legitimate. Oligarchs love the way it applies to everybody other than them.
The only reason they don’t automate 100% is because they can get Govt directed peons cheaper. If you don’t demand a fair share of the spoils you fall off the edge eventually.
Let’s also not miss the fact that small “business” owners were “granted” tons of money over the past yr or so.
Also, they allowed small business owners to claim unemployment benefits.
How does this factor in? If I had a landscaping business, and all of a sudden I can make 30k a yr by claiming enhanced unemployment benefits instead, even though I never paid into this system before, where do I land in these numbers?
What they are now measuring has changed, I’m guessing.
and yet me – never took day off in over 5 years
do my 15-30 hours per week
hire/pay FAMILY living wage and have NO PROBLEM WITH employees
kind of like hey day
B B B B U U U U T T T T T T T T T T – 30% annual ‘ D E V A L U A T I O N’ of fiat $dollar is killer
Right, but now you are showing up as “unemployed,” since you are claiming these benefits.
So, the numbers have changed.
Small business owners will/can claim this money while working right? There’s no insensitive for them not to.
Therefore, we can’t deduce what the labor market is doing based off this data currently.
Wolf, I like the Enders and Keepers call. You have an entertaining way to send the true facts, it’s merely one reasons I follow and support you.
Correlation may not be causation here.
Instead of the “ending benefits makes people go back to work” logic, I’d argue that both the “end” vs. “keep” (government) decisions and the “I’m going back to work” (personal) decisions could reflect a deeper underlying cause. Perhaps some states have a stronger “Can-Do” spirit?
Basically, if the economy in the “ender” states is stronger than in the “keeper” states, that shifts the political calculus towards “end the benefits” (“we don’t need them here”), and ALSO means there are better-quality opportunities for people to go back to work.
The economic strength could relate to different balances of urban vs. rural, service/tourism vs. production economy, etc. I’ve consistently observed since COVID hit that big-city economies were more impacted than suburban / rural. Less-crowded places didn’t have to shut down, and people still needed the output of the production economy, so those areas have been booming.
I don’t think so. Look at the trend of continuing claims. Both keeper and ender states had the exact same trend until exactly when the extra benefits ended.
If your thesis was correct then the keeper states would have had a shallower trend compared to the ender states prior to the time the trend diverged.
I don’t think that’s enough data to draw that conclusion. Many states have seasonally strong summer economies and the drop in claims could just be differences in seasonality.
I’d want to see the claims stats on a per-capita basis, comparison with prior years, and also the unemployment data for Keeper vs. Ender states, and also (ideally) data on jobs available (quantity and starting pay) before drawing a conclusion.
Wow Philip im speechless,
Might part of the reduction of unemployment claims be due to the fact that some people are no longer counted in the unemployment numbers even though they remain unemployed, simply because they are no longer eligible for pandemic-related unemployment benefits? Would data on the number of employed/payrolls (vs unemployed) shed more light on this?
“be due to the fact that some people are no longer counted in the unemployment numbers even though they remain unemployed”
With this phrase, you brought in a different data set, namely the monthly jobs report data from the BLS that is based on surveys of households and businesses, which will be released tomorrow. for July.
This data here is based actual applications for unemployment insurance.
So, your data is based solely on the numbers of unemployment claims, but it does not factor in the number of people who have not bothered looking for work in the last 4 weeks. If that is the case, how can you conclude ending the benefits incentivized them to go back to work? What percentage of them just gave up entirely? I also saw something on the news about a shift where older people are taking more low level service jobs that were being given to teenagers. So now there are less teenagers working, but the net number of jobs filled has not actually increased.
Think about what unemployment insurance means and who gets it.
About 14 million people get some kind of unemployment insurance. That’s over twice as many people as are considered “unemployed” in the separate BLS data that you’re referring to.
“At the state-by-state level, “continued claims” can serve as a stand-in to find out if ending the extra $300 a week in federal benefits is encouraging people to go back to work.”
To clarify: in states that ended the Federal extensions, those people no longer qualify for continued claims. It was not only the extra $300 that ended. It was the federal extension of regular unemployment and the benefits offered to gig workers (PUA). Once they ended the programs, those people were CUT OFF completely. They did not voluntarily withdraw their claims and go back to work. lol
The regular state UI didn’t get canceled by states that withdrew from the $300 a week federal program. That state UI continues. The effect was that these people still receive their state UI, but no longer receive their federal $300 a week. And so they went out and got a job and got out of the state UI program after they started working.
The people that receive PUA benefits aren’t in this data because they never (legally) received state UI, and are therefore are not included in the continuing claims data. They have no impact on this data, coming or going. You’re mixing everything up.
Ok gotcha. There are also the longterm unemployed who were on state UI though, which was extended through the federal program, which also ended early in most of those states. They do not qualify for continued claims either. That’s why I was confused about how the data is presented since there are multiple cohorts who were cut off.
Why bother going back to work? I mean you knew Covid was going to happen from years ago, so you probably made a killing shorting the stock market last year, as well as from going long afterwards.
Employment went off the rails, Wolf.
One person showed up two years ago and proceeded to do the work of half the planet. Sending a torrent to the proverbial “showers” … with all the crazy flow created from the enterprise.
We’re in the dry off phase now.
I’m curious what is the current unemployment rate for the Keepers vs the Enders?
The unemployment rate, as figured by the BLS, is not part of this data. The unemployment rate is survey based. This data here is based on claims of unemployment insurance.
It’s obvious that people go back to work when they have to go back, whether they want to or not, if they can find a job. If they are being paid almost as much or even more not to work, given that their jobs typically “suck”, most will choose not to work since the marginal benefit from working is minimal or negative.
Claiming otherwise as media accounts repeatedly report is a rationalization to pay some people more not to work than they make working.
My assumption is that any data purporting to demonstrate that it doesn’t make much if any difference is actually mostly due to them still having unspent stimulus. Given spending and borrowing behavior in this country, many will choose to wait until they have little or no money left.
> Given spending and borrowing behavior in this country, many will choose to wait until they have little or no money left.
When/whether schools, after-school programs, childcare centers remain open during peak Delta variant is a key consideration for parents.
Ask a simple question. Why do we work? Because you want to buy goods and services. Why do you save and invest. Because you want to buy goods and services in the future. Could Congress be any more stupid about carrots and sticks.
And in other news — the letter B comes after the letter A in the alphabet.
Stand up for your rights: free assembly, free speech, free breath.
I list these in reverse order of criticality.
These rights were understood to unalienable. At least until 1862 when Lincoln started closing newspapers etc.
I wore a mask occasionally when requested until the Federal & state & municipal offices of authority presumed to make it mandatory.
The recent extensions of viral theory into obvious fiction are certainly interesting.
It all has effectively forced many of us to concentrate our minds on the matter of discriminating science from science fiction.
You were lucky / smart enough to have advance warning of what was imminent.
I have taken the opportunity to travel while the planes are mostly empty.
> despite breathless media coverage to the contrary.
Why is mainstream media trying to sell us by doing this?
The start of UBI?
I don’t understand the motivation by the media to push this point of view without data. I don’t know where it comes from. The WAPO did this big time a month ago, when there was still zero data on it. I have no idea why this happens.
Simply, pro state action bias, Wolf…especially when the Dems are in control of the State.
To the extent that state action can be shown to weaken the economy (extended unempl benefits limiting employment growth), that is info that must be ignored or discredited by the State-allied media (85%+ of non-internet media).
Today, to my surprise, I got an email from ACA telling me that my premium for the HSA-enabled bronze plan I have is suddenly $0 for me due to the ” American Rescue Plan Act of 2021″. Another version of stimulus that’s not easy to remove, I didn’t ask for, I don’t know the motivation of…
Ironically, I might be the only American saying that to compete in a globalized economy healthcare/GDP has to go from 18% down to 9% to match the other developed countries. Guess I’m helping somehow now that I’m spending $0 on it.
The reason for UBI by some elitists in the Democratic Party and the GOP is that since the 70s most of the productivity renumeration has gone to capitalists, and very little to the laboring middle and working classes as well as the poor. UBI is an attempt to balance out some of that inequality and undue rewards to the capitalist class. Some of the “enlightened” plutocrats in the top 1% that advocate for UBI are doing so because they don’t want the pitchforks scaling their gated communities in the not-too-distant future. In other words, it is an attempt to provide bread and the circus to the plebians. It didn’t work in Rome and I seriously doubt it will work in the US or anywhere in the world that has witnessed the greatest transfer of wealth and income to the top in 50 years.
A word to those that still believe in equality of opportunity and the American Dream: if our political system doesn’t change and quite soon, eventually labor will get squeezed to the point that instead of watching the Hunger Games or Elysium in the theatre or at home you are experiencing it in real life. In some segments of society, they are already experiencing it, for example those with only $400 in their savings account.
I can recall as a child and teenager the cartoon the Jetsons and Star Trek (Jim Kirk and Spock versions). Both entertainment shows had an overall upbeat version of a futuristic Homo sapiens society. Those versions of optimism in America and Homo sapiens are long gone.
I am glad I am on my way out. I am fed up with living in a country than only the top 1% reap the financial rewards of society, some in the top 20% “think” that they are part of the capitalist team of the 1% when in fact they are on the menu but don’t know it and the bottom 80% for the most part struggle to make ends meet.
I am also fed up with a capitalistic system that destroys life on planet Earth through its myopic economic system that doesn’t respect the other lives on planet Earth one iota otherwise we wouldn’t do what we do to them and by proxy the Earth’s air, water and land.
Mother Earth will not long endure the wanton taking of life of other species, the clogging of her arteries (rivers, streams, lakes, oceans and seas), the emphysema to her lungs, (polluting her sky) and the cancer in her body ( chemicals onto the land).
“UBI is an attempt to balance out some of that inequality and undue rewards to the capitalist class.”
Sure, an attempt to put a collectivist Band-Aid on that result instead of fixing the financial system and crony capitalism that led to the problem in the first place, that Band-Aid being presented and to be administered by the same people intimately involved in the systems and their bought governments which are causing the inequality.
Uh, yeah, that’ll work…
Yes…the so-called evils of capitalism have nothing to do with capitalism, but government caused cronyism. Chief crony for the financiers is Jay Powell. Periodic DEflation is necessary to keep the plutocrats grounded. Otherwise you get the historic levels of inequality others are complaining about. Let the markets work. They will solve inequality.
What country are you moving to?
I plan on dying in the US unless Trump or a Fascist surrogate returns in my lifetime.
The capitalist system isn’t nearly as hard on the environment as communist and authoritarian states. Ever been to Russia or China?
Capitalist countries within the environs of Europe, the Americas, Asia, & Middle East continent have compromised Earth more than any so-called communist bloc, which are in fact state capitalism.
Tree-i hear you but might suggest another way to look at the Earth. Our always-improving examination/interpretation of the past demonstrates not a ‘Mother Earth’, but a planet that can’t, and doesn’t, care. It will continue on, as it always has, moving through space and time whether we walk its surface or not. More than any other species, we can choose to take care and reinvest in the systems that brought us to, and keep us in, the dance-or not. This race is being closely run, and looking at and administrating our planetary survival systems as an honestly-run business (i wonder if that’s even possible, anymore) with no ‘bailout’ agencies existing, won’t yield a view of an easy human future. Ignoring the necessity, however, likely guarantees NO human future. (is fatalism a $0.50 word for short-term,, self-serving thinking?).
may we all find a better day.
may we all find a better day.
In the ender states the continued claims may be falling because workers used up their regular unemployment and can no longer get extended benefits. They may still be unemployed and are not being counted anymore.
I read a story out of New Orleans, which just ended their programs, about a woman who got called back to work, but not full time. I think she was offered less than 20 hours. I think there’s a lot of that going on and it’s why people are not going back to their old jobs, not enough hours being offered to make the jobs worth it.
Some employers used the COVID shutdown/layoffs as an opportunity to rid themselves of poorly performing employees. A once in a lifetime opportunity. No HR interventions, extraordinary severance arrangements etc…
Likely, the recall lists are selective and underemployment offers used to ensure they are not accepted.
A silent performance review!
You give management way too much credit. Chances are they treat every single employee as disposable with ridiculous hours on short notice regardless of performance.
American managers aren’t known for taking into account the real cost of turnover.
Turnover expense isn’t in the expense budget so it doesn’t factor into the P&L.
I argued over and over in my 20 years of senior management that the turnover expense is reflected in loss of productivity, loss of output, loss of sales, increase in recruiting costs and training expense, a decrease in morale and overall customer satisfaction.
It mostly fell on deaf ears with the exception of two senior VPs and one CEO that I had the privilege to work for.
If you don’t get compensated for it then it don’t happen in the corporate world.
Employers are under no obligation to call back workers they don’t want. What they are doing is more insidious, deliberately making it impossible for people to survive. The entire economy is predatory and eventually will consume itself.
An employer is going to net out a profit or he has to close up shop. The more government piles on through taxes, inflation and regs the more the employer is going to squeeze employees to try to net out a profit. Once it can’t be done, nobody has a job there. A lot of industries already been put out of business; textiles, shoes, electronics, furniture. US is no longer competitive except in limited highly capitalized industries and big tech.
Replying to old school: What taxes are being added to employers? If anything, the tax system was made for companies to avoid taxes and taxing related to business has been consistently lowered since I was born in 85.
Confucius say He who work hard and plenty during lockdown of covid – not hire lazy thief who not work.
The eviction moratorium has a caveat that amounts to a diplomatic immunity for rental non payments. Why not let the felons out of prison also?
Apply for a job with Gary Yary Enterprises. And you were unemployed from March 2020 to August 2021. That application goes into the circular file. No immunity from my bias. Already played that bias. No mooches allowed. What business model besides the Fed encourages mooching?
No matter how desperate – no moochers. Excuses: I can’t work more than two hours…I’m tired…my Range Rover is being repo’d I need a day off…omg I have to pay attention…start at a certain time…you want me to work…
Here is my kick ass idea to fix the problem.
Unemployed moochers are traded for eager immigrants seeking work from other nations. Moochers deported….workers imported.
GDP to the Moon!
Wolf Richter for President in 2024 – Gary Yary Limo driver.
I know guys I would work for for free because they were good bosses. I wouldn’t work for you for a million dollars a week. Be my guest, hire your immigrants, they will give you what you pay for and what you inspire, very little for very little. Good luck.
Best wishes Petunia,
I am pro worker – pro America.
If you work for Gary Yary – you work. Mutually agreed upon arrangement.
Labor for capital.
I inspire Pride in work.
Pride in oneself.
Your price of $1,000,000 per week is very admirable! You probably won’t hire me…
I always paid for myself in every job I ever held, making sure my billing and/or productivity was high. But there were bosses I really produced for and it was never about the money. The money generally followed, but the motivation to work brutal hours and produce exceptional work, was a good boss and a working environment that valued the people.
Totally, like, ”TOTALLY” with Pet on this one GY:
Best boss/owner I worked for/with as employee and then when he agreed to my terms, ”consultant” made at least a couple extra MMs due to my can to can’t hours and totally committed efforts!
He knew it from the beginning, and gave me the team bonus after just a few months,,, then piled on the bonuses and full pay when off the last few months of the year every year thereafter, because he couldn’t ”bond” anymore work that year…
GREAT boss,,, RIP!
Real GDP will in the US will decrease and eventually so will nominal GDP but not because of those lazy laborers.
No, you are “fighting” the wrong war. Who runs the US economy?
It isn’t the laborers.
What about those that their child care closed and the employer refused to work for them? Or those that were injured, etc., etc. You are not an employer people would seek out.
After graduating high school in 1982 in Michigan with 14.5 percent unemployment and begging to get any minimum wage in a restaurant, it’s just unbelievable to now see all the great job opportunities available to people now. It took me 6 years to get an electrical apprenticeship with a company in the mean time going to night school at a community college and working basic jobs. Whereas my son now just turned 18 walks right in to an apprenticeship with many openings still available for those who want to work hard, work overtime, stay off the phone, and come into work every day. I hate to say it but I think we are doomed.
Annodotal from eugene, ore as of yesterday, a keeper state.
Walgreens, dairy queen, taco bell, Safeway, winco foods, Jerry’s home improvement, home depot, Ross, tj max. All with hiring signs or announcements over the loud speakers in store. Just my small sample, must be many more also.
Yet homeless population here is like flies in a barn yard, everywhere. What a contrast.
how can the economy be screaming for labor when there’s plenty of it? what the corporate drones want is cheap labor. free if possible.
When capital can be obtained for free on real terms, a lot of those jobs are going to be eliminated. You want $30 an hour for low skilled labor. It’s not going to happen. Business will restructure without cashiers, tellers, call centers, drivers. Nearly anything can be done with enough investment.
Fascinating how philosophic everyone gets about how other people need to work now that there’s a labor “shortage”. Where was this philosophy when the working class was cruthlessly cut from payrolls? Oh. Yeah. I guess nobody “needed” to work then. But it’s different now because … reasons.
We forced them onto unemployment. And now we see no irony or hypocrisy in forcing them off of it. Someone said something about incentives. Mhmm. Why not just pay them more? Inflation stripped away their buying power years ago. Why not just catch everyone’s buying power up to where it was before the GFC?
HAHAHA. Yeah. Snowball’s chance in Hades.
This… and now I’m outta here.
Society has to really produce it before it can get split up, printing money isn’t going to get it done.
Joe is a genius. If he keeps pushing unemployment benefits, the dumbos will push back. But by next year, with the infrastructure in place, and Fed possibly continuing to shot up the economy with more cash. It’ll set Joe up as the genius who revived the jobs market. He’ll point to the data and say, look, under my watch, I erased the deficit created by my predecessors. I’m a genius. Vote for my buds and prosper.
GENIUS to use reverse psychology like that.
Politician. Workers are getting pay raises. Reality. Inflation adjusted wages going down.
Politician. We just passed a stimulus package. Reality. Real return on savings highly negative.
And all you have to see how Joe is a genius, today he is crowing about his plan in bringing jobs back…. and getting people working.
Just watch, if Covid explodes again, he is going to take credit for continuing enhanced benefits, eviction moratorium, and on and on and on.
The reality for the average workers are they are getting it right up the a** and our leaders are preaching to them why it’s good for them. The worst part is a good part of the population is just too uneducated to understand how they’re getting f***ed. To this I give a hearty thanks to the American education system. Great job the last three decades.
“today he is crowing about his plan in bringing jobs back…. and getting people working.”
sounds familiar…meet the new boss, same as the old boss.
Tightening (my bets are 50-75 basis points max) will only come after liabilities are diminished in real terms.
The FED raised them to 125? the last time before the system started falling apart in September 2019. It’s a matter of print vs crashing the economy- a hollow shell of an economy.
People point to Japan and say they can do it and so can we. Japan may have monetary mess but at least they still have a vibrant economy of a 60 billion trade surplus.
Us is cleanest dirty shirt due to demographics and natural resources if we don’t let politicians screw it up. Here is an example. One advantage US has is cheap energy. Politician’s want to give that up. Second. Electric vehicle is going to have high China content because of battery. Why do we let lawyers do engineering design?
“Why do we let lawyers do engineering design?”
We don’t “let” pols do anything. Lobbyists write the bills that they don’t read before passing.
And ALL should read the excellent book, “Extortion: How Politicians Extract Your Money, Buy Votes, and Line Their Own Pockets” to learn how and WHY bills are made instead of relying on that old cartoon.
I call it political blindness. Refusing to acknowledge basic economic truth due to your political leanings. Paying people NOT to work keeps them from working. Not complicated.
Robert Hughes spoke earlier of bringing back the old “WIN!!!” buttons and bumper stickers of the Nixon years: “Whip Inflation Now!!!”
What we needed then and need even more desperately now are “LOSE!!!” buttons, stickers, flags, and so forth: “Let’s Organize a Sane Economy!!!”
Yes, More People Went Back to Work in States that Ended the $300/Week in Federal
– Jen Psaki says NO!
I think September 6 is a long way away.
Among other things: how big will this next COVID spike be?
In California, the pending recall election for Gavin Newsom is also a factor. Polls are trending against him for the last several weeks to the point where he is now projected to be recalled…
And then there’s the eviction moratorium, or lack thereof.
Just saying it is likely much too early to call anything yet.
In UK the KPMG job survey reported that starting salaries are rising at record rates due to shortage of candidates.
More scarily they said it was the sharpest salary inflation in 24years.
I have generally thought that UK is running slightly cooler and later than US, if I’m right ‘Yazoo’ for you guys.
It was wage inflation that led to the second larger peak in the 70’s. I might up my bet for the highest number.
Thank you once again for coherent analysis and easy explanation. You make the lay economists’ jobs much easier. I can point friends to your articles and say “read this” when they think they want to dispute reality in favor of ______(insert favorite fantasy here)_____
Pay for no work ruins society.
Have a look at any city neighborhood where welfare (pay for doing nothing) has prevailed now for generations, replacing work for reward.
The value of home, self, family, church, and ultimately life itself, is missing.
All this pandemic money is doing is creating yet another class of subjects dependent upon subsistence from politicians.
“When the people find that they can vote themselves money, that will herald the end of the republic.” – Benjamin Franklin
Old Ben missed one point, it also heralds the end of a peaceful and respectful society.
Look around and tell me this isn’t so.