[www.politico.com]
The U.S. economy created 517,000 jobs in January, a surprisingly strong number that underscores the remarkable resilience of the labor market but could stiffen the Federal Reserve’s determination to squeeze the economy to fight 40-year-high inflation.

The unemployment rate fell to 3.4 percent, the lowest in more than a half-century, the Labor Department reported Friday.
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This is a truly terrible aspect of the capitalist side of our economy (which is by far the biggest part of our economy) - that the Fed tries to keep from getting too cold (recession/depression) or too hot (inflation) - that to keep the economy from getting too hot due to wage inflation, they have to raise interest rates causing employers cut down on the number of workers they hire/have working for them. That means that there always has to be a pool of people who want to work but can't find work or can only find work at a lower wage than they had before.

From a pure corporate point of view this is all a good thing. Having a pool of people who want to work and can't find work or only find work at a lower wage than they had before is good for the bottom line which is the only line that matters in a pure corporate mindset. Too bad for those people. What is sad is how normalized that attitude is throughout society. If you can't get a job there is something wrong with you - not something fundamentally wrong with capitalist markets in the human sense. It's so widely believed that a lot of people who want to find work but can't feel like there is something wrong with them.

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e pluribus unum



Edited 3 time(s). Last edit at 02/03/2023 10:53AM by Ted King.

There is still a lot of cash floating around from the COVID45 money waiting for a place to be spent. The boomers will be leaving the workforce and many have money to burn, or at least spend.

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Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.

It's imperfect, but what's better? There's always room for improvement, at least until poverty is eliminated, but the basic structure seems sound. We've not seen a sustained depression since before WWII. We've not had sustained inflation since the early 1980s. It's hard to argue with overall success.

11+ million jobs under Biden, in 2 years. Much better than the Former Guy.

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Acer
It's imperfect, but what's better?

Manage the markets, not the money.

It would be a paradigm shift.

Outside of the most egregious exercises of monopoly powers and labor-abuses (and casual bailing out any company/cartel with failed market strategies and sufficient lobbying power), letting markets manage themselves is a fundamental precept of our government.

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After looking into this some more, I think my earlier post was off the mark by suggesting that the Fed is mostly worried about wage inflation now. I thought that because I kept reading that the Fed was concerned about the current robust jobs numbers. But maybe the Fed's concern about the job numbers is that they are looking at it as a barometer of how revved up the economy is in general that could cause future increases in inflation rather than directly worried about wage inflation itself. I haven't been able to find data about what percent of the present inflation is due to wage inflation, so I should have not have used the thread to rant about what I see as a flaw in our economy that we shouldn't ignore.

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e pluribus unum

I seem to remember reading a few years ago that the economy needed to generate on average something like a quarter million jobs a month just to keep pace with kids graduating into the workforce from high school and college...

These jobs numbers sound good, but where are they compared to where we should be had we not had the massive pandemic job losses?

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g=

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gabester
I seem to remember reading a few years ago that the economy needed to generate on average something like a quarter million jobs a month just to keep pace with kids graduating into the workforce from high school and college...

These days, I think there might be more people retiring from the work force than the young ones entering.

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AllGold

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gabester
I seem to remember reading a few years ago that the economy needed to generate on average something like a quarter million jobs a month just to keep pace with kids graduating into the workforce from high school and college...

These days, I think there might be more people retiring from the work force than the young ones entering.

True, and we would be in trouble like Japan except we are blessed with immigrants, especially those from Latin America.

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Saint Cloud, Minnesota, where the weather is wonderful even when it isn't.

I honestly think the Fed is in a bind. With our immigration policy starving the economy of low-income employees, minimum wage efforts are moving all of those jobs up the cost chain for employers.

I keep hoping the 'disinflation' they are noting will result in them changing their tune and accepting a 'new normal' where employee salaries are going to go up a bit to a better equilibrium.

Housing costs are 16% lower y/y in Dec 2022 vs 2021. Those still need to drop more before we are at a good place. They are too expensive for many people given the higher mortgage rates now.

I was listening to an economist on a news show talking about the Fed, inflation and wage inflation. Up till now the data has shown that when adjusted for the general inflation rate, there is little to no overall wage inflation - wages overall have stayed pretty much the same. Fortunately, there has been some real growth in wages for the lowest paying jobs.

But the economist thought the Fed is still thinking there is or will be wage inflation that will keep the general inflation rate higher than they want because it is rare for there to be such full employment without wage inflation. He thought that maybe Fed chair Powell is beginning to think that for some reason this time is different and may be changing his views about the necessity of keeping interest rates higher.

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e pluribus unum

This video, "Why salaries in the U.S. don’t keep up with inflation", is about 12 minutes long and kinda like a "live in person" video version of a PowerPoint presentation, but I think the information is solid and they provide a good explanation for why wages aren't keeping up with inflation - which I think might be worth understanding at least a little bit better.

[www.cnbc.com]

A general impression I got about the presenters was that there was a kind of airy confident detachment in their attitude, at least in my humble opinion. And that bothered me. They talked about the labor market as though it were like any other market in terms of supply and demand - but these are people, not economic material goods that sell in response to demand. The thing that got me a little twisted was them blaming pointing to the human-ness of wage earners for why corporations can't increase wages to keep up with inflation.

People are not anything like economic material goods being traded in capital markets. I think a great many people want - and far too many people NEED - economic stability and having a steady job is the cornerstone of meeting that economic stability. I didn't see that the presenters had acknowledged that in at least in a minimal way. They were just giving a clinical explanation of how the markets work so I guess maybe I shouldn't have expected they would acknowledge the humanity behind the numbers. I do wonder if they ever contemplate the morality of the economic system they so very capably explained.

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e pluribus unum



Edited 2 time(s). Last edit at 02/05/2023 09:15AM by Ted King.

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AllGold

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gabester
I seem to remember reading a few years ago that the economy needed to generate on average something like a quarter million jobs a month just to keep pace with kids graduating into the workforce from high school and college...

These days, I think there might be more people retiring from the work force than the young ones entering.

Among the interesting phenomena stemming from COVID is that people in low-end service jobs found jobs in other industries, often office/telework jobs, but also basic hourly stuff where they have a regular work-schedule, higher base-wages, benefits, job security and overall greater happiness. They aren't going back to their old jobs even where tips brought in more money than they're making now.

And kids graduating from school ARE filling a lot of gaps from older workers retiring (except in certain trades that have years-long apprentice systems which merit their own discussion), so THEY aren't filling minimum (and sub-minimum) wage-slave jobs.

The result is that yeah, there are unfilled senior positions, but the biggest gap is at the low-end. Restaurants are closing because they can't find workers willing to kill themselves for $2.13/hr and no benefits anymore. Other companies aren't able to fill menial jobs with unpaid or cheap "interns."

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Edited 2 time(s). Last edit at 02/05/2023 02:30PM by Tiangou.