There's more to a job market than job creation. Wage gains now are not impressive — workers see their real incomes falling, and they're mad.
As a worker in an understaffed area, I'd argue that our understaffing (it's clear to my coworkers and I that we're providing higher productivity per worker than pre-COVID) makes the decrease in real wages even more acute than you would get by inflation adjustment alone. We basically got sold a raise that supposedly accounted for our increase in productivity, then inflation ate away all of the raise to the point where it didn't even work as a cost of living adjustment.
Surely it must be the case that some nonzero percentage of the job-seeking workforce are consistently, well, not very good workers. What, if anything, does the literature say about overall consumer satisfaction as we inch towards zero unemployment and the overall daily experience starts including semi-regular, high-memorable crappy interactions?
Genuinely curious about this. I don't even have good anecdata, never mind real data.
I wonder if the reason for the mismatch is the pacing. Ordinarily, the labor market tightens gradually over time, and as wages go up, companies are able to raise prices to compensate for increasing wages.
Right now, though, there was a labor shock - we went from mass unemployment to mass employment in less than a year - and the prices are going up not because of wage increases, but because of supply chain issues and inflation. Prices are not elastic in most U.S. sectors where the prices are increasing, so companies are more likely to keep wages stagnant, raise prices only to the extent made necessary by supply chain shortages, and wait for the coming demand drop.
Can we all agree that Joe Manchin, from a signaling perspective, was correct last year to emphasize inflation fighting? Man is a legend.
This has to be one of the worst starts to a presidency in American history, and I'm genuinely not trying to be hyperbolic. Psaki's continual use of Putin's Price Hike is so condescending. Americans are not dumb, and we all know inflation has been skyrocketing long before Russian invaded Ukraine. Democrats cannot put together a cohesive message on this, and the Biden admin is still pushing Build Back Better as the solution. Seems clear that Democrats are on course to be absolutely crushed in the midterms.
Josh, like you often say, this administration is not good at messaging how they're working on inflation and how it is their #1 priority (because maybe it isn't?). Seems like from their messaging that they're more concerned about who is responsible for the inflation rather than working on policies to address the inflation.
>>real wages have declined 2.7%, the fastest rate of decline in 40 years.<<
It would be great to see documentation on this because it sounds . . . off. For example wages dropped 5.9% in March 2009. (https://tradingeconomics.com/united-states/wage-growth#:~:text=Wage%20Growth%20in%20the%20United,percent%20in%20March%20of%202009.)
While that may be nominal wages, inflation was positive in that time period. So a 2.7% drop, while unwelcome, can't really compare to what workers experienced in the Great Recession.