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| How can so many Americans afford not to work? And will it last? (1859046) | |
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How can so many Americans afford not to work? And will it last? |
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Posted by TransitChuckG on Wed Oct 20 06:50:47 2021 How can so many Americans afford not to work? And will it last? A job fair in Santa Clara, Calif.Justin Sullivan/Getty Images ‘I can be choosy’ A shortage of bus drivers has forced school districts to combine routes. A lack of servers has caused restaurants to reduce hours. And you may have noticed that the checkout lines at supermarkets, drugstores and other retailers have grown. The labor shortage of 2021 is both conspicuous and perplexing. How is it, after all, that several million people who were working before the pandemic are now getting by without a paycheck? There is no single answer, but a crucial part of the explanation is that Americans are flush with cash. (Monday’s newsletter detailed how the cash glut is also causing rising inflation and supply-chain problems like backed-up ports.) Thanks to pandemic stimulus programs during both the Trump and Biden administrations, many families have received multiple checks from the federal government over the past 18 months. Those stimulus programs also increased the size of unemployment benefits. Over the same period, home values and stock prices have risen, too. As a result, many households have more of a financial cushion than they used to. If anything, the recent increases in savings have been larger at the bottom of the economic spectrum than at the top: Income quarters based on 2019 household earnings.Source: JPMorgan Chase Institute With this cushion, some workers — especially those in service industries disrupted by Covid-19 — have decided that they did not like their old jobs enough to return. Others have simply quit their jobs. A low-wage economy That should not be entirely surprising. The American economy of the past few decades has not been very kind to workers. Since the 1980s, incomes for the poor, the working class and much of the middle class have grown slowly, failing to keep up with either economic growth or the incomes of the affluent. Other quality-of-life measures are also flashing red. Life expectancy has grown more slowly in the U.S. than in dozens of other countries. Drug use, alcohol use, chronic pain and suicide have risen among the working class, while marriage and self-reported satisfaction have declined (as these charts show). “Many, many people are realizing that the way things were prepandemic were not sustainable and not benefiting them,” Rachel Eager, 25, who previously worked at an after-school program in New York, told my colleague Ben Casselman. Eager is now looking for a new job, but she is not in a rush. “My financial situation is OK, and I think that is 99 percent of the reason that I can be choosy about my job prospects,” she said. So far, she has not been willing to take another job with low pay, no benefits and little flexibility. Her attitude is telling. The U.S. does not have a pure labor shortage so much as it has a shortage of workers willing to accept the working conditions that today’s economy often demands. Paul Krugman, the Nobel Prize-winning economist and Times Opinion columnist, has described the trend as “the revolt of the American worker.” Betsey Stevenson, a University of Michigan professor, calls it the “take this job and shove it” economy. There are also labor shortages in some other countries, probably related to their own large pandemic stimulus programs. But the situation seems to be most intense in the U.S. A turning point? The big uncertainty is what happens next. One possibility is that we have entered a new era of tight labor markets. With more Americans choosing not to work — including aging baby boomers — companies would then need to increase pay and improve working conditions to attract employees. Some are already doing so, Ben Casselman notes: Hourly wages in the leisure-and-hospitality sector, for example, have surged this year. In this scenario, the pandemic would represent a turning point. Almost a half-century of a low-wage economy would end, and incomes would grow more rapidly, as they did from the 1940s until the early ’70s. But I find it hard to believe this is the most likely scenario. For one thing, the financial cushion of most households still is not large. The median cash savings of the bottom quarter of households (ranked by earnings) has risen by 70 percent over the past two years — but it’s still only about $1,000, Fiona Greig of the JPMorgan Chase Institute points out. And the pandemic stimulus programs have mostly ended. Eventually, more Americans will feel the need to go back to work. When they do, they will find a job market where employers hold a decided power advantage, because of the decline of labor unions and an increase in corporate concentration. The college dropout crisis, leaving many workers struggling to keep up with technological changes, plays a role, too. President Biden and many other Democrats favor a set of policies intended to put workers on more even footing with their employers. The agenda includes paid family leave, expanded child tax credits, subsidized child care, a crackdown on anti-union activities and a more aggressive approach to corporate consolidation. But it is unclear how many of those ideas will become law. Congressional Republicans have expressed concerns about some of these same trends but oppose most policy responses. Congressional Democrats have razor-thin margins in Congress and don’t yet agree about what laws to pass. In the meantime, Ben says, the labor market is in a standoff: “Workers are holding out until their savings disappear. Businesses are holding out until their customers disappear.” You can read his story about the job shortage. It also describes some of the causes of the shortage other than the cash glut, like Covid fears and a dearth of day-care options. |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by Dave on Wed Oct 20 07:36:55 2021, in response to How can so many Americans afford not to work? And will it last?, posted by TransitChuckG on Wed Oct 20 06:50:47 2021. A few thousand dollars is flush with cash? Maybe for a couple of months but what happens after that? |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by JayZeeBMT on Wed Oct 20 07:40:25 2021, in response to How can so many Americans afford not to work? And will it last?, posted by TransitChuckG on Wed Oct 20 06:50:47 2021. Employers who are paying their workers a genuinely decent, livable wage, have all the labor they need.No economy in the world should "demand" harsh job conditions for laughably low pay. That's just wrong. |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by Spider-Pig on Wed Oct 20 07:57:59 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by JayZeeBMT on Wed Oct 20 07:40:25 2021. Excellent post. Of course, the usual suspects will accuse you of being a “Marxist.” |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by JayZeeBMT on Wed Oct 20 08:02:42 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by Spider-Pig on Wed Oct 20 07:57:59 2021. Thank you. Also, the usual suspects who will accuse me of being "Marxist" fail to see that a decently paid, well-treated workforce actually promotes capitalism. |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by Train Dude on Wed Oct 20 17:02:57 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by JayZeeBMT on Wed Oct 20 07:40:25 2021. No, dummy. Raised wages = higher costs which lead to higher prices to cover the higher costs. Higher prices lead to minimizing or negating those raises. Last month, wages were up 4.6% bot predictably, inflation caused prices to go up 5.4%. Tell me how workers are better off. |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by Spider-Pig on Wed Oct 20 17:49:10 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by Train Dude on Wed Oct 20 17:02:57 2021. The fact that those numbers don’t correspond shows how wrong that is. Prices aren’t set by cost, they’re set by demand. |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by JayZeeBMT on Wed Oct 20 17:51:38 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by Train Dude on Wed Oct 20 17:02:57 2021. No, increased wages do not cause increased costs. The inflation we are experiencing is from supply chain disruption. |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by Catfish 44 on Wed Oct 20 19:32:00 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by JayZeeBMT on Wed Oct 20 07:40:25 2021. You pay them then |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by WayneJay on Wed Oct 20 22:26:24 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by JayZeeBMT on Wed Oct 20 07:40:25 2021. I don't know how they're doing it, but I'm glad employees (especially restaurant workers, retail etc) are walking away en masse. |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by Train Dude on Wed Oct 20 22:42:19 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by Spider-Pig on Wed Oct 20 17:49:10 2021. Ignorant response. If costs increase, producers will have to raise prices so as not to lose money |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by Spider-Pig on Wed Oct 20 22:43:48 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by WayneJay on Wed Oct 20 22:26:24 2021. IAWTP. Labor finally flexing its muscle. |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by Fred G on Wed Oct 20 22:49:43 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by WayneJay on Wed Oct 20 22:26:24 2021. About time. Wages have been kept low by that Chamber of Commerce and others fueled myth that increasing wages is going to result in a broken economy. You don't hear those same people railing against increasing rents. |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by WayneJay on Wed Oct 20 22:56:18 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by Spider-Pig on Wed Oct 20 22:43:48 2021. Exactly! For far too long greedy employers exploited these workers knowing that most were desparate for the job. |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by WayneJay on Wed Oct 20 23:02:51 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by Fred G on Wed Oct 20 22:49:43 2021. Agreed! Also... It's no suprise that some employers are now offering higher wages in their desparate attempt to attract new hires. |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by Catfish 44 on Wed Oct 20 23:05:41 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by Fred G on Wed Oct 20 22:49:43 2021. Abolish the Reserve Clause and establish Free Agency! |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by JayZeeBMT on Thu Oct 21 04:34:24 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by Fred G on Wed Oct 20 22:49:43 2021. Truth! |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by Fred G on Thu Oct 21 06:34:42 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by Train Dude on Wed Oct 20 22:42:19 2021. Cost is a factor but demand is a bigger factor. Slow times versus busy times.Rent is also a major cost for a business yet the same people who rail against increasing wages are silent when rents keep going up. |
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Re: How can so many Americans afford not to work? And will it last? |
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Posted by Fred G on Thu Oct 21 14:39:32 2021, in response to Re: How can so many Americans afford not to work? And will it last?, posted by Catfish 44 on Wed Oct 20 23:05:41 2021. Ha ha! |
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