Speaker 1: Hello, and welcome to another episode of the All Thoughts Podcast.
Speaker 1: I'm Tracy Alloway and I'm Joe Wisen't thal, Joe. I
Speaker 1: feel like it's been a while since we've talked about
Speaker 1: the labor market. Yeah, that's right. I mean, so you know,
Speaker 1: for years, look, my favorite day of the year for
Speaker 1: the month was always the Non Farm Perils Report. But
Speaker 1: even you know, and it has political significance as economic significance,
Speaker 1: it has market significance. But of course, like this year,
Speaker 1: like inflation Day is the news. You know, that's the
Speaker 1: day that everyone cares about when the CPI report comes out.
Speaker 1: So I think it sort of speaks to how, yes,
Speaker 1: unemployment rate is really low, but the centrality of like
Speaker 1: certain labor market indicators at least has sort of declined
Speaker 1: a little bit, you would seem. Yeah, but you could
Speaker 1: make an argument that inflation Day is kind of jobs
Speaker 1: and wages Day, right, because there's all this focus on
Speaker 1: inflation at the moment, and clearly central banks don't want
Speaker 1: inflation to become entrenched. One of the ways it becomes
Speaker 1: entrenched is when everyone starts asking for a pay rise
Speaker 1: to offset the higher cost of living. Wages start to
Speaker 1: go up, and then you get that self reinforcing cycle.
Speaker 1: It's this really strange thing because obviously, why do we
Speaker 1: worry about high inflation. Well, because it's like it worsens
Speaker 1: buying power. Yeah, but then everyone wants to raise and yeah. Well,
Speaker 1: but then also it's like people sometimes express relief at
Speaker 1: wages not accelerating too much, right, or people express relief
Speaker 1: that maybe the labor market is cooling down a little bit.
Speaker 1: It's like, wait, but I thought the whole reason we
Speaker 1: were worried about inflation is because we were worried about
Speaker 1: what it means for households. It's it creates all kinds
Speaker 1: of tricky things. But yes, of course you point out
Speaker 1: inflation is eating into people's incomes. Yeah, so that's definitely
Speaker 1: one reason to care about what's going on in the
Speaker 1: labor market and with wages. The other reason to be
Speaker 1: talking about it is because after the pandemic, and this
Speaker 1: is where our previous episodes on this topic came in,
Speaker 1: there was, I don't want to say an expectation, but
Speaker 1: there was a thought developing that maybe this would mark
Speaker 1: some sort of moment, some sort of change in the
Speaker 1: relationship between workers and bosses or their corporate employers, like
Speaker 1: the balance of power would swing back to the average
Speaker 1: wage earner and we'd finally see salaries start to go
Speaker 1: up in a way that they hadn't really for most
Speaker 1: of the time after the financial crisis. Right, So that
Speaker 1: was the story of the tens. The sluggish labor market,
Speaker 1: poor wage growth, just sort of general like seeming like
Speaker 1: a decline and working worker bargaining power, an acceleration of
Speaker 1: a very long term trend of measures of labor share
Speaker 1: of the national income declining. And then in the middle
Speaker 1: of when we started getting all the early one really
Speaker 1: when we started getting all the is like stories about
Speaker 1: like companies having trouble hiring, and that was like the
Speaker 1: first real theme. There's like something that's different. It's like, wait,
Speaker 1: are we gonna have a trend change here? Could we
Speaker 1: have like a meaningful reversal of decades of declining labor share?
Speaker 1: And I think, you know, there was a lot of
Speaker 1: optimism right somewhere. I think we had a lot of
Speaker 1: like optimistic guests who are like, this is going to
Speaker 1: be the start of something different. Of course, the market
Speaker 1: was going up, and then with inflation eating into those
Speaker 1: wage games, and then the FED basically saying we were
Speaker 1: wrong about transitory inflation. We're going to hike fast. I
Speaker 1: think a lot of that optimism has gone away about him,
Speaker 1: and so the question is where do we stand. I'm
Speaker 1: just thinking, like, what counts for optimism nowadays? Is someone
Speaker 1: coming on and saying this is like the great plague
Speaker 1: of the Middle Ages, and we're going to see a
Speaker 1: similar shift in the counts of power towards people. Okay, well,
Speaker 1: all right, this is all good context. We're going to
Speaker 1: be going back to the labor market question, the wages question,
Speaker 1: which it and feeds into issues over inflation and things
Speaker 1: like that. We're going to be speaking with Anna Stansbury.
Speaker 1: She's an economist who specializes in labor and macro economics
Speaker 1: and also an assistant professor at m I T. Sloan
Speaker 1: whose work is basically all about this. Anna, thank you
Speaker 1: so much for coming on our thoughts. Thanks so much
Speaker 1: for having me. So your research is all about labor
Speaker 1: market forces and the sort of balance of power between
Speaker 1: the employee and the employer. How do we actually go
Speaker 1: about measuring worker power? What do you look at? Well,
Speaker 1: it's a bit of an amorphous concepts and I think
Speaker 1: different people define it different ways. What we do to
Speaker 1: look at work of power is we say work of power.
Speaker 1: The result of work of power is the ability of
Speaker 1: workers to share in the profits of the firm that
Speaker 1: they work at, above and beyond what would happen in
Speaker 1: some kind of market where their wages were just determined
Speaker 1: by the market or their compensation was just determined by
Speaker 1: the market. So in my work, when I'm trying to
Speaker 1: measure worker power, I'm trying to say, what would a
Speaker 1: given worker be paid in a kind of market situation
Speaker 1: without that power, And then how do different factors give
Speaker 1: that work of the ability to share in the profits
Speaker 1: of the firm. So one very obvious, very salient driver
Speaker 1: of worker power is unions. You know, being a member
Speaker 1: of a union that bargains over your compensation enables you
Speaker 1: to share, to some extent more in the profits of
Speaker 1: your firm. But there are other, less salient, harder to
Speaker 1: measure ways that worker power can exist. It can be
Speaker 1: things like norms around pay bargaining and around fairness. It
Speaker 1: can be things like how managers are incentivized to divide
Speaker 1: up the pie that the company creates between shareholders and workers.
Speaker 1: So there are very deferious different aspects that feed in.
Speaker 1: But I think that sharing in the profits of the
Speaker 1: firm above and beyond what would happen without that power
Speaker 1: is the is the ultimate indicator. So, you know, I
Speaker 1: mentioned that we had a number of sort of I
Speaker 1: would say, more optimistic sounding conversations last summer, like a
Speaker 1: year ago, and this hope that okay, this could be
Speaker 1: like a new day for or burgaining power and strength.
Speaker 1: And crucially, it wasn't really based on you know, there
Speaker 1: was no like fundamental change and unionization or unionization policy.
Speaker 1: There wasn't any like real major policy change. I think
Speaker 1: the optimism was simply labor market tightness, and that after
Speaker 1: the Great Financial Crisis and then a decade maybe or
Speaker 1: close to a decade of clearly the unemployment rate being
Speaker 1: over what it could have been, being over something that
Speaker 1: anyone would call unemployment, how much just just sort of
Speaker 1: like the cycle itself and the sustenance sustaining a strong
Speaker 1: economy or a strong labor market, how much of a
Speaker 1: role does that play potentially in shifting the balance of power.
Speaker 1: So I think it's important, And um, I was someone
Speaker 1: that was saying, you know, for for a long time
Speaker 1: in the pre pandemic era, as I was getting into
Speaker 1: this profession that it doesn't look like labor markets aren't
Speaker 1: tight enough, and they should be tight end they can
Speaker 1: be tight to And we saw that by February twenty
Speaker 1: they had got tight. The unemployment rate was down to
Speaker 1: the lowest level in its post war period, and even
Speaker 1: then there wasn't much evidence of inflation. So I think
Speaker 1: we might have been able to go tied to steal.
Speaker 1: So I think I think it does matter. It does
Speaker 1: matter a lot. The question as to whether it's on
Speaker 1: its own, is a sufficient driver of worker power to
Speaker 1: reverse some of the trends we've seen in the last
Speaker 1: forty fifty years, I'm less a strong believer in that hypothesis.
Speaker 1: I think tight labor markets are a necessary but not
Speaker 1: a sufficient factor. So just real quickly, in those months
Speaker 1: like nineteen when we had sub four unemployment, were we
Speaker 1: seeing evidence I mean, you say it's necessary but not sufficient.
Speaker 1: Were we seeing evidence pre pandemic of a tilt happening?
Speaker 1: Or was it too early to see the effects of
Speaker 1: those tightening labor markets in other measures of labor bargaining power.
Speaker 1: So in terms of the direct effect on things like ages,
Speaker 1: you did start to see the the tilt of wage
Speaker 1: growth switch. So when labor markets become tighter, typically that's
Speaker 1: disproportionately affecting lower income individuals who tend to have higher
Speaker 1: unemployment rates. Typically that's disproportionately infecting people from racial ethnic minorities.
Speaker 1: And you did start to see as the tilt of
Speaker 1: unemployment became less steep, the tilt of wage growth improved
Speaker 1: to benefit those groups. So you saw that effect directly
Speaker 1: happening already. The question I think you're asking is is
Speaker 1: it also feeding into other secondary factors of labor market power.
Speaker 1: Something like tight labor markets enable more worker activism and
Speaker 1: more unions because people are less worried about retaliation or
Speaker 1: losing their jobs. In the pre pandemic era, my senses,
Speaker 1: we didn't see a huge amount of a huge amount
Speaker 1: of change there. There was there were some in some
Speaker 1: waves of organizing in the summer of twenty nineteen. We
Speaker 1: can talk a bit more about what's been happening since
Speaker 1: the pandemic, but my sense was that the period probably
Speaker 1: hadn't been long enough and sustained enough at a very
Speaker 1: tight level for that to have really taken effect. So
Speaker 1: maybe before we dive into that, we could step back
Speaker 1: for a second, because the issue of stagnant wages, I mean,
Speaker 1: this has been going on for decades really, so even
Speaker 1: as productivity increases, workers seem to see less of a
Speaker 1: share of that of the benefits of that increased productivity. So,
Speaker 1: based on your research, you know, what's the explanation for that?
Speaker 1: Why have wages been stagnating for so long? So this
Speaker 1: is one of these questions in economics which is in
Speaker 1: some sense overdetermined. If you added up everyone's different explanations,
Speaker 1: you'd get more than of the of this gap. So
Speaker 1: different people will have different views as to what's important.
Speaker 1: The big three sets of factors that people think about
Speaker 1: largely fall into the buckets of technology, globalization, and institutions
Speaker 1: and norms, and so technology clearly plays a role in
Speaker 1: determining an important role in determining labor market outcomes and
Speaker 1: who's paid what. Part of the big part of this
Speaker 1: divergence to in pain productivity has been the fact that
Speaker 1: the incomes of lower middle income people haven't kept up
Speaker 1: with the incomes of high income people. Right, So there's
Speaker 1: a question about did the demand for skills change in
Speaker 1: a way that education didn't keep up with it? The
Speaker 1: race between education and technology. Almost surely that was a
Speaker 1: part of it. Almost surely for some workers, globalization was
Speaker 1: a part of it, increased competition from offshoring and manufacturing,
Speaker 1: although that the magnitude of that, I would I would
Speaker 1: put it relatively small. And then I think the big
Speaker 1: question is how much did institutions and norms and policies
Speaker 1: play a role. And this is where some of my
Speaker 1: work comes in to think about the role of the
Speaker 1: decline and worker power. In my work, including in a
Speaker 1: paper that I that I wrote with Larry sum Is
Speaker 1: a couple of years ago, we argued that the role
Speaker 1: of the decline and worker power was actually quite big
Speaker 1: in explaining this part of this divergence, That the declining unions,
Speaker 1: the decline in informal worker power and norms about fairness
Speaker 1: within firms, the rising sharehold of value maximization ideology and
Speaker 1: it's sort of attendant capital markets practices and corporate structures,
Speaker 1: that all of these played a role in e roading
Speaker 1: work of power in a way that actually does explain
Speaker 1: a large share of that gap. Alongside your more impersonal,
Speaker 1: large scale market forces of technology and globalization. When you
Speaker 1: talk about informal sources of worker power within firms and
Speaker 1: so called norms, What is it, what does that mean?
Speaker 1: What are we actually talking about, and how do you
Speaker 1: edit those factors? So I think it can be a
Speaker 1: few things. But we know that anyone who's ever you know,
Speaker 1: talk to HR or been in HR will know that
Speaker 1: there are lots of factors that determine how how pay
Speaker 1: is set for different people within a company. And some
Speaker 1: of them are to do with obviously what the person
Speaker 1: would earn elsewhere, whether they're likely to leave, how much
Speaker 1: you need to offer to to make them stay or
Speaker 1: to hire them. Of course, market forces matter, but there's
Speaker 1: often quite a lot of wiggle room within that, and
Speaker 1: that's where these norms can play a role. And in
Speaker 1: particular it can be things like a norm of how
Speaker 1: much the top executives and the CEO in particular should
Speaker 1: be paid relative to front and workers. You've seen the
Speaker 1: CEO to worker pay ratio absolutely explode in the last
Speaker 1: forty to fifty years, and if you look back at
Speaker 1: say the eighties, this was actually quite controversial in many
Speaker 1: circles in a way that it's not now. And I
Speaker 1: think things like whether or not it is perceived to
Speaker 1: be fair and okay, to have these big paid differentials
Speaker 1: within a firm actually does affect people's pay behavior. But
Speaker 1: more broadly, I think sometimes the the norms and the
Speaker 1: I guess what all might call ideology, but not in
Speaker 1: not in a critical way, just as a as a
Speaker 1: way of describing a school of thought around how how
Speaker 1: things should be structured. So that the rise of shareholder
Speaker 1: value maximization. Ideology was a school of thought that really,
Speaker 1: you know, it is in society's best interest for businesses
Speaker 1: to maximize shareholder value. That led to not only changes
Speaker 1: in norms, but also changes in the way companies structured themselves,
Speaker 1: things like fissuring of the workplace and outsourcing of employment,
Speaker 1: things like incentive structures from executives, things like leverage, buyouts,
Speaker 1: private equity, various capital markets structures that incent that incentivized
Speaker 1: management to follow shareholders interests. So I think there was
Speaker 1: a role in which these more informal, intangible things like
Speaker 1: norms and ideology also crystallized into formal physical structures and changes.
Speaker 1: So this is one of the reasons why your research
Speaker 1: is so interesting, because if you kind of follow it
Speaker 1: to its logical and extreme conclusion, you seem to be
Speaker 1: asking a question about whether or not capitalism is working
Speaker 1: for society, right, like companies being motivated by short term
Speaker 1: considerations and basically answering to their shareholders, which is something
Speaker 1: that is often at odds with the needs and requirements
Speaker 1: and happiness of their workforce. How are you thinking about that? Yeah,
Speaker 1: that's a big question, isn't it. I'm sorry, easy one
Speaker 1: for a for an afternoon. Okay, So yes, I mean
Speaker 1: I think you're right. That is at the heart of
Speaker 1: these questions. And I tend to shy away from using
Speaker 1: the word capitalism just because I think it means such
Speaker 1: different things to different people. Yeah, to what extent? To
Speaker 1: what extent does um the current structure of ownership and
Speaker 1: incentives and the determination of value, including the value of
Speaker 1: labor pay, How does that play out? And is this
Speaker 1: playing out in a socially beneficial way? That's that's what
Speaker 1: we're asking. And I think what what I tend to believe,
Speaker 1: and what I tend to believe based on the the
Speaker 1: research is that whether you think it's working depends a
Speaker 1: lot on what you think the baseline workings of an
Speaker 1: economy are, and in particular, how close do you think
Speaker 1: they would be to approximate the economists perfectly competitive ideal,
Speaker 1: So if you just bear would be for a second
Speaker 1: on that, So that would be perfectly competitive. Ideal would
Speaker 1: be in a world of perfect markets, the government would,
Speaker 1: you know, set the rules of the game. There would
Speaker 1: be property rights, transactions and contracts would be uniforced. Transactions
Speaker 1: could take place, and individual companies and workers will be
Speaker 1: competing with each other, and that the best, sorry, the
Speaker 1: worst products would be competed out of the market. The
Speaker 1: best products would survive. Prices would be low. Workers would
Speaker 1: always be competed for by companies, and so they would
Speaker 1: be paid the very highest possible value that companies can
Speaker 1: afford to pay for their skills and talents. And you've
Speaker 1: got this this market working in a very efficient way.
Speaker 1: And this is the kind of market that you start
Speaker 1: with an eCOM one oh one. And if that's the
Speaker 1: world that you think you're in, then a system where
Speaker 1: ownership of capital is what determines the allocation of economic activity.
Speaker 1: You know who's producing what, who is hired by whom.
Speaker 1: That system is going to be efficient. And you might
Speaker 1: not think it's going to result in an equitable distribution
Speaker 1: of income, but then you should redistribute afterwards, this classic
Speaker 1: separation of let the market do its work and then
Speaker 1: tax and transfer afterwards. If you think that the underlying
Speaker 1: market is actually not going to be very close to
Speaker 1: that perfectly competitive ideal, if you think it's going to
Speaker 1: be um, there's actually very difficult to search for a
Speaker 1: new job and find a new job, and these labor
Speaker 1: market frictions mean that once you're at a job, you're
Speaker 1: kind of at the mercy of your employer and they're
Speaker 1: not going to be paying you as much as they could.
Speaker 1: And if you think that actually the tendency in some
Speaker 1: markets is towards large companies and consolidation, and so there's
Speaker 1: not going to be this inherent drive towards the survival
Speaker 1: of the fittest and better, better products and an increased competition.
Speaker 1: If you think that's the sort of natural state of markets,
Speaker 1: then I think you're much more predisposed to ask about, well,
Speaker 1: is the allocation of economic activity that's created by these
Speaker 1: markets actually optimal or is there an imbalance of power
Speaker 1: that needs to be corrected. And that's where this question
Speaker 1: of lack of power for me comes in so obviously,
Speaker 1: and you mentioned it, and it's a really important part
Speaker 1: of your thesis. Part of the decline in work or
Speaker 1: power has been the major decrease over the last several
Speaker 1: decades in union density, and very different theories for why
Speaker 1: that is. But I mean, what is your story, why
Speaker 1: has union density gone down? And are there policies that
Speaker 1: could reverse it. So the way I like to look
Speaker 1: at this and a lot of kind of big economic
Speaker 1: data stories, is so just look over time and across
Speaker 1: countries as the very first pass. And if you do that,
Speaker 1: I think you can distinguish quite effectively between different stories
Speaker 1: of union decline straightaway. So the big story of union
Speaker 1: decline across industrialized countries in the last fifty years is
Speaker 1: basically all countries have seen some decline in union coverage
Speaker 1: the share of workers that are covered by a collective
Speaker 1: bargaining agreement. Basically all countries have seen some declining union membership.
Speaker 1: By the US in particular, the UK, which is where
Speaker 1: I'm from, to a lesser extent, have been at the
Speaker 1: extreme end. They've seen much sharper declines than almost anywhere else.
Speaker 1: So I think at that first past, then you say, okay, well,
Speaker 1: some portion of the decline and unionization is common to
Speaker 1: all countries, and maybe that makes it more likely to
Speaker 1: be some combination of these globalization and technology explanations. It's
Speaker 1: harder to maintain a unionized manufacturing sector when there's low
Speaker 1: wage competition from other countries, for example. But the portion
Speaker 1: that is unique to the U S and maybe the
Speaker 1: UK and a few other countries, that seems much more
Speaker 1: likely to be specific and therefore much more likely to
Speaker 1: be a function of policy and a function of norms.
Speaker 1: And in the US you can point to a lot
Speaker 1: of factors that led to a massive shift in the
Speaker 1: policy environment and in the public attitude towards unionization. And
Speaker 1: people always point to firing of the striking air traffic
Speaker 1: controllers by Reagan, for example, as a sort of water
Speaker 1: shared moment in setting the tone for what's acceptable in
Speaker 1: terms of corporate behavior towards people who are who are
Speaker 1: active in unions. So my view, my view is that
Speaker 1: a big portion, not all, but a big portion of
Speaker 1: the decline in unionization in the US has been a
Speaker 1: result of active hostility from business many businesses, obviously not
Speaker 1: from many businesses towards union organizing, and that this creates
Speaker 1: a kind of race to the bottom equilibrium where if
Speaker 1: you know that all your competitors are not going to
Speaker 1: be unionized. It becomes very very difficult for you as
Speaker 1: a business to be unionized because your cost are higher
Speaker 1: than everyone else's. And so then you get this race
Speaker 1: to the bottom dynamic where even if not all businesses
Speaker 1: want to be hostile towards union organizing and union activity,
Speaker 1: there becomes a competitive imperative to have to be. So
Speaker 1: that's where I think we've got to right now in
Speaker 1: terms of policies to change that. I think there's a
Speaker 1: lot that could be done, and you can think about
Speaker 1: it in two buckets. One bucket is within the current
Speaker 1: conception of what work of power is and what unions
Speaker 1: look like in the US. What could be done and
Speaker 1: what I mean there is unions typically bargain at the
Speaker 1: level of an establishment like a plant or a unit
Speaker 1: or a firm, and they typically bargain over pay and
Speaker 1: other job related attributes. And there there's a lot of
Speaker 1: reforms that could be done to increase penalties on firms
Speaker 1: for for cracking down on union organizing. There could be
Speaker 1: ways to make it easier for unions to share information
Speaker 1: with workers. So a lot of the reforms that were
Speaker 1: proposed in the Proact, for example, were things that we're
Speaker 1: trying to change how and when the firm versus the
Speaker 1: union can share information with workers about the union or
Speaker 1: persuade people to vote for or against the union. But
Speaker 1: in some ways, I think the more exciting portion is,
Speaker 1: and the more promising portion, if you want to see
Speaker 1: a big change, is trying to rethink the structure. And
Speaker 1: I'm very in favor of, or at least interested by
Speaker 1: changing the structure of worker power so that bargaining is
Speaker 1: done to a larger extent at a broader level, on
Speaker 1: a sectoral level, like I said, in much of continental Europe,
Speaker 1: which sets a kind of baseline wage floor, compensation benefits
Speaker 1: flow for a whole sector or occupation in a particular region,
Speaker 1: as well as with bargaining at the firm level. Could
Speaker 1: you talk a little bit more about the europe system
Speaker 1: versus the US system, because I'm not familiar with that. Yeah,
Speaker 1: of course, So just to take there's a lot of
Speaker 1: different variations on themes in different continental European country. So
Speaker 1: I'll take Germany as one example. So the German system
Speaker 1: um they call it codetermination, has worker power at essentially
Speaker 1: three different levels within within within companies and industries. One
Speaker 1: level is bargaining over largely pay, and this bargaining is
Speaker 1: done between the unions and confederation of employers at the
Speaker 1: level of the whole industry in a region. So there
Speaker 1: will be a bargain for the whole of the metal
Speaker 1: working industry in a certain region in Germany, and that
Speaker 1: will set a wage floor for the different types of
Speaker 1: workers in metalworking, so that that agreement will look quite
Speaker 1: like an agreement would look like at the level of
Speaker 1: a firm in the US, but instead it will apply
Speaker 1: to the whole sector. Then you've got at the level
Speaker 1: of the firm in Germany a works council, which is
Speaker 1: worker representatives who are elected and have different rights over
Speaker 1: front topics. So they have joint decision making rights with
Speaker 1: the firm over things like UM, leave policies, hoursum to
Speaker 1: some extent redundancies. And then they have information and consultative
Speaker 1: rights on various other things that go a lot deeper
Speaker 1: than a lot of the rights that unions have in
Speaker 1: the US. So they have information rights and consultative rights
Speaker 1: on things like what kinds of technology is the firm
Speaker 1: is going to implement UM, So it's a lot more
Speaker 1: into the managerial decisions. And then the third level is
Speaker 1: at the very top, which is that of large firms,
Speaker 1: supervisory boards are elected by workers and the other by shareholders,
Speaker 1: and then the deciding vote as a shareholder elected director.
Speaker 1: So and practice it slightly less than a majority of
Speaker 1: the board is worker representatives. So you have these three
Speaker 1: different tiers, all of which have different types of powers
Speaker 1: over different questions. Essentially, Yeah, I mean it seems to
Speaker 1: me listening to this that like part of the question
Speaker 1: or the tension is like, well, you know, and you
Speaker 1: mentioned this, like maybe like people have this like very
Speaker 1: like sort of like strict view of like what the
Speaker 1: market system is, Like the board represents the shareholders and
Speaker 1: that's the boards job, and then the board negotiates with employees, etcetera.
Speaker 1: And the idea of wait, why can't employees have an
Speaker 1: actual role on the board or be represented on the board.
Speaker 1: It feels like, you know, it's very foreign to the
Speaker 1: sort of American way of capitalism. Whether we want to
Speaker 1: use that term or not, it's feel it's very foreign
Speaker 1: to the American way of business. But I guess, you know,
Speaker 1: sort of like one takeaway from you're saying, it's like
Speaker 1: why not do it a different way. Yeah, exactly exactly,
Speaker 1: And as you said, it goes down to what you
Speaker 1: think will just create good, betteral west incentives, and Milton
Speaker 1: Friedman would say, well, this is just going to distract
Speaker 1: from the corporation's most efficient task of maximizing profits, and
Speaker 1: it's going to let managers off the hook who are
Speaker 1: inefficient because they'll say, well, I was just trying to
Speaker 1: meet all of these different competing goals and so you
Speaker 1: can never really hold them accountable. So there are arguments
Speaker 1: to think that this adding other more representatives of different
Speaker 1: types of stakeholders is going to dilute accountability, and it's
Speaker 1: going to dilute incentives and make things work less well.
Speaker 1: On the other hand, I think if you're going to
Speaker 1: add any stakeholders into the mix, workers are the obvious
Speaker 1: one in some ways because they are whole lives and
Speaker 1: fortunes are so tied up with what happens to the company.
Speaker 1: So if you're thinking about long term best interests, obviously
Speaker 1: the shareholders interests or for the firm to do well.
Speaker 1: Obviously the workers interests in many ways for the firm
Speaker 1: to do well. And obviously there are areas in which
Speaker 1: their interests conflict, which is, given that the firm is
Speaker 1: doing well, how do you split the proceeds. So if
Speaker 1: you have that kind of a view of the company
Speaker 1: as a set of different stakeholders who have some aligned
Speaker 1: interests in some conflicting interests, it becomes a little bit
Speaker 1: more natural to think about what we should actually give
Speaker 1: all of them a voice, because they are all invested
Speaker 1: in a long term way, in a very meaningful way
Speaker 1: in this organization. M just to play Double's advocate, and
Speaker 1: I want to make it really really clear that this
Speaker 1: is not my personal view, but I love Devil's advocate. Clearly,
Speaker 1: there there is some resistance to unions in the States,
Speaker 1: and I mean I think there was a gallop Pole
Speaker 1: recently that said actually overwhelmingly if you ask people what
Speaker 1: they think about unions, I think it came in at
Speaker 1: like sixty percent in favor something like that. But that said,
Speaker 1: there is a subset of the American population that think
Speaker 1: unions and they think this is, you know, something I
Speaker 1: can to communism. Basically, it's a way for people to
Speaker 1: eat as much out of the system by doing as
Speaker 1: little work as possible. In some cases, like I think
Speaker 1: there's a sense that in some way it might be
Speaker 1: unfair to people who work really hard and it's a
Speaker 1: way for others to basically get a free ride. How
Speaker 1: do you deal with those types of criticisms and how
Speaker 1: much are those criticisms or that sense an impediment to
Speaker 1: stronger worker power in the US. So I think there's
Speaker 1: a lot of fairness in these critiques, and and a
Speaker 1: reinvigorated work of power system would want to be would
Speaker 1: want to be careful about a number of things. I
Speaker 1: think one thing that will want to be careful about
Speaker 1: is that concentrations of power tend to breed abuses of power.
Speaker 1: I think anywhere in society, and and a union would
Speaker 1: be no different than that. And we've seen lots of
Speaker 1: very good examples in unions in recent years of you know,
Speaker 1: the famous Jimmy Hoffer and the Teamsters, a lleged association
Speaker 1: with organized crime. We've seen corruption cases from from certain
Speaker 1: union bosses, you know, convictions of corruption and this management
Speaker 1: of money. So obviously there are legitimate reasons to be
Speaker 1: concerned on that front. Right, It's like, is this organization
Speaker 1: that is a sensibly representing workers really representing me as
Speaker 1: as a member of this of this big union, and
Speaker 1: I think the issue there is, as with any concentration
Speaker 1: of our there needs to be really serious accountability structures
Speaker 1: and mechanisms in place. So that's that's one that I
Speaker 1: think the point you raised, Tracy, which is is more
Speaker 1: about within the union are their free riders? Are some
Speaker 1: people going to be bouncing off the labor of everyone
Speaker 1: else essentially, And I think that there is a real
Speaker 1: concern of that as well, and one of the biggest
Speaker 1: worries that often plays out with unions, I think in
Speaker 1: in people's people's lives in the world at the moment,
Speaker 1: given who is union member at the moment, it is
Speaker 1: mostly in the public sector. Is are police unions or
Speaker 1: teachers unions preventing society from holding bad police or bad
Speaker 1: teachers accountable because there are a lot of rules about
Speaker 1: how and when people can be disciplined and how and
Speaker 1: when they can be fired. So I think that's another
Speaker 1: another issue where if there are people that have behaved badly,
Speaker 1: if there are mismanas, you know, how do you ensure
Speaker 1: that the balance of power is such that the right
Speaker 1: social outcome happens. On the other hand, you've got a
Speaker 1: lot of situations where in non union workplaces, people are
Speaker 1: fired or disciplined for things that they really shouldn't be
Speaker 1: and there's no one to fight their side of the case.
Speaker 1: And that's where the union would come in. So I
Speaker 1: think it's about what I would say is these are
Speaker 1: all thorny issues. It's about figuring out the right balance
Speaker 1: of power and the right accountability mechanisms. But if you think,
Speaker 1: and this goes to a broader question than just the
Speaker 1: economic question, I think, which is the concept of of
Speaker 1: workplace democracy is something that is not central to most workplaces,
Speaker 1: but I think a lot of people have become more
Speaker 1: interested in since the pandemic, which is the concept of
Speaker 1: if I'm spending forty hours a week or whatever it is,
Speaker 1: for several years of my life in a given place,
Speaker 1: with the given set of people, why is it run
Speaker 1: like a like a dictatorship in some sense? You know,
Speaker 1: a workplace is run largely from above, with no formal
Speaker 1: rights for anyone else to disagree. You simply leave if
Speaker 1: you disagree. And I think another another way of organizing
Speaker 1: workplaces is to have workplace with some democratic elements, where
Speaker 1: people have a say over what the health and safety policies,
Speaker 1: or have a say, over what the remote work policy is.
Speaker 1: And once you start to see that as a good
Speaker 1: in and of itself, it becomes something that how do
Speaker 1: we think about how to structure these organizations, such should
Speaker 1: the accountability mechanisms work rather than you know, is it
Speaker 1: a yes or no? Should we have no no workplace
Speaker 1: voice at all? Because of these risks of abuses of power.
Speaker 1: So there's another thing that's been talked about quite a
Speaker 1: lot recently, which is transparency on pay and the idea
Speaker 1: that maybe you can have a system where you could
Speaker 1: see how much all of your co workers are making
Speaker 1: and then you could I guess internalized whether or not
Speaker 1: you think they deserve that, or if you should demand
Speaker 1: a bigger raise because you know someone else is getting money.
Speaker 1: Is that something that you've considered in your research or
Speaker 1: something that maybe could be helpful when it comes to
Speaker 1: raising wages. And also there's I think there's a new
Speaker 1: law in New York that like job opening too, So
Speaker 1: I'm curious about that. Yeah, so this is a hot
Speaker 1: topic and I think it's an interesting one. Broadly, I
Speaker 1: think it is likely to go in the direction of
Speaker 1: making pay more equitable between between groups of the same
Speaker 1: job level. Roughly speaking, so you know, reducing the gender
Speaker 1: pay gap for the same type of job, reducing racial
Speaker 1: pay gaps for the same type of job, because it
Speaker 1: becomes much more it becomes much more obvious and salient
Speaker 1: if individuals pay is transparent that some people are making
Speaker 1: less money than others, and that's embarrassing for firms, and
Speaker 1: it also provides grounds for workers too to lobby for
Speaker 1: higher pay for themselves if they're on the lower end
Speaker 1: of that scale. I think that's also true with the
Speaker 1: New York vacancy page on Sparency Law, in that you
Speaker 1: can see what other kinds of jobs like yours are
Speaker 1: being paid, and then you can use that as a
Speaker 1: negotiating tool with your own employer. I think on on
Speaker 1: net it is likely to be a somewhat positive thing.
Speaker 1: I doubt that it has huge potential for impact, and
Speaker 1: part of my reason for saying that is also for impact.
Speaker 1: More broadly than that, I think closing gender and racial
Speaker 1: pay gaps within job types is still a very worthy
Speaker 1: goal and we should do it. But in terms of
Speaker 1: rectifying the broader increase in income in equality that we've seen,
Speaker 1: and I think that's because largely people kind of know
Speaker 1: how different jobs are paid on the grand scale. It's
Speaker 1: is a software engineer making X or y, that kind
Speaker 1: of information will be revealed by this, But a software
Speaker 1: engineer versus a dishwasher, we all know the difference is
Speaker 1: astronomical already, and transparency isn't going to change that, so
Speaker 1: we'll affect some types of inequality. The other The other
Speaker 1: hesitation I have is there have been certain patients sparency
Speaker 1: reforms introduced different types of patientsparency reforms in different countries recently. So,
Speaker 1: for example, the UK m and dating a gender pay
Speaker 1: gap disclosure for companies which is an average and a
Speaker 1: median rather than for specific jobs. And what some of
Speaker 1: the early academic studies have seen is that these do
Speaker 1: seem to reduce gender pay gaps, but it's not clear
Speaker 1: if they do so by boosting the pay of the
Speaker 1: women versus lowering the pay of the men. And so
Speaker 1: if you don't rectify more broadly the balance of power
Speaker 1: between workers and shareholders, it's not clear that this is
Speaker 1: giving all workers more power versus just rectifying power imbalances
Speaker 1: between sort of within the group of workers, it between groups.
Speaker 1: I want to go back to the sectoral bargaining question
Speaker 1: in Germany. You mentioned Germany because it sort of relates
Speaker 1: to like big structural changes in the economy. You know,
Speaker 1: if we're going to have like this, like sort of
Speaker 1: like an the nobility for workers across multiple firms to
Speaker 1: negotiate with employers across multiple multiple firms within an industry.
Speaker 1: It feels like that kind of thing makes sense in
Speaker 1: a sort of old industrial style economy where it's like,
Speaker 1: you know, Detroit, you have three big carmakers and literally
Speaker 1: no other carmakers, or it's you know, German chemical companies
Speaker 1: or something like that, or like, you know, in journalism,
Speaker 1: if there were just Bloomberg and the walshare journal in
Speaker 1: the New York Times, then you could like imagine you know,
Speaker 1: a sort of like a journalist journalist pay standard. But
Speaker 1: that a that many industries are not like that. And
Speaker 1: in media there's like startups all the time, and in
Speaker 1: autos we've seen a proliferation of new car companies, And
Speaker 1: so I'm curious, like, is there a minimum level of
Speaker 1: corporate concentration that needs to exist in order for an
Speaker 1: arrangement like that to work? And then more broadly, how
Speaker 1: much of the decline in unionization across Rich countries. Does
Speaker 1: have to do with the like the fact that a
Speaker 1: sort of like industrial industry or big industry is just
Speaker 1: a smaller and smaller part of the overall economy. Yeah,
Speaker 1: great questions. So on the overall corporate concentration. I think
Speaker 1: in some ways that it reminds me of Galbraith's work
Speaker 1: when he was basically in the Galbraithian vision of an
Speaker 1: economy was one where there were a handful of very
Speaker 1: big companies and then very strong unions that were bargaining
Speaker 1: with those companies. And that was, you know, what he
Speaker 1: was talking about in his book American Capitalism. And I think, yes,
Speaker 1: it's it's certainly going to be easier for that kind
Speaker 1: of bargaining to work if there are a handful of
Speaker 1: lead large companies. So even in the US auto industry
Speaker 1: in the fifties, it was you know, the big three automakers,
Speaker 1: and then the other small auto parts manufacturers and other
Speaker 1: supply chain players would follow what that what that agreement
Speaker 1: with the Big three and the U a W said,
Speaker 1: It's not clear to me that this is not that
Speaker 1: there's not this critical mass of large companies or large
Speaker 1: umbrella brands in different industries. I mean look at something
Speaker 1: like fast food, which is very fragmented in terms of
Speaker 1: lots of franchise e s owning individual stores, but there's
Speaker 1: a handful of brand organizations that own basically all of
Speaker 1: the brands. So you can imagine different industries have slightly
Speaker 1: different corporate structures. But in most industries there are there
Speaker 1: are a handful of big players, and I think you
Speaker 1: might be able to get around the table, and they
Speaker 1: do in in um in the industry boggains. In some
Speaker 1: continental European countries, you have caught outs for smaller employees.
Speaker 1: You have ways that startups or that small companies wouldn't
Speaker 1: necessarily be found by these agreements and wouldn't be at
Speaker 1: the table with them, and you would have to strike
Speaker 1: that kind of a balance. You know. Something else related
Speaker 1: to this, and I believe you talk about it specifically
Speaker 1: in your work, is like you know, in the old days,
Speaker 1: and maybe it was like apocryphal, but in the old
Speaker 1: days you would hear stories like, oh, someone started in
Speaker 1: the mail room at X and then thirty days and
Speaker 1: thirty years later they became the CEO. And these days
Speaker 1: there's a good chance that the person who works in
Speaker 1: the mail room at a given company doesn't actually work
Speaker 1: for the company, like they're on premises, but maybe they
Speaker 1: work for a sub contractor and they have different color
Speaker 1: badges or something like that. There's like they're not really
Speaker 1: there talk to us about like this sort of like
Speaker 1: and I guess this is sort of like a it's
Speaker 1: part of the shareholder revolution, is part of like norms
Speaker 1: and structure that like company is like we're just gonna
Speaker 1: do our one thing. We're gonna have our search engine business,
Speaker 1: and then everyone else, like you know, the people work
Speaker 1: in the cafeteria that are don't actually work for our company. Yes,
Speaker 1: this is this is a hugely important trend and as
Speaker 1: you say, I think it's a big part a part
Speaker 1: of these broader forces that have been happening over the
Speaker 1: last fifty years. It's very prevalent, as you said, in
Speaker 1: dining services, in security services and cleaning services. That is
Speaker 1: also increasingly prevalent in warehousing, staffing, in transportation and logistics.
Speaker 1: That the people that are doing the work, usually mostly
Speaker 1: or entirely working for one company, are not working are
Speaker 1: not employees of that company. And it comes out of
Speaker 1: this drive to to focus on call composite competencies. But
Speaker 1: it creates a whole lot of problems, including when we're
Speaker 1: thinking about bargaining. So if you're cleaning worker for a bank,
Speaker 1: say and you're can to unionize, Okay, what happens You
Speaker 1: unionize your fellow cleaning workers. You're then unionizing the cleaning
Speaker 1: services company. The bank then simply does not renew the
Speaker 1: contract and gets a different, cheaper cleaning services company. So
Speaker 1: once you are outside the boundaries of the firm, and
Speaker 1: if we're in a world where unions are organized at
Speaker 1: the level of the firm, which they are, then the
Speaker 1: ability to exert work of power disappears because the bank
Speaker 1: is where the profits are, not the cleaning services company.
Speaker 1: But you can only organize the cleaning services company. So
Speaker 1: this is also the kind of thing where I think
Speaker 1: a sectoral well, really, I think an occupation level bargaining
Speaker 1: structure would help because you'd say, well, it doesn't matter
Speaker 1: the corporate structure should be irrelevant. If we're thinking about
Speaker 1: setting a minimum wage for cleaners in New England, that
Speaker 1: minimum wage will be set across corporate structures and whether
Speaker 1: or not they're employed by the cleaning services company or
Speaker 1: by the bank. So I want to go back to
Speaker 1: our framing at the beginning of this conversation, which is
Speaker 1: what does the labor market mean for inflation? And one
Speaker 1: thing that you see a lot of nowadays is people
Speaker 1: reaching for the historic parallel of the nineteen seventies. You know,
Speaker 1: we have high inflation, we have an energy crisis. Are
Speaker 1: we going to basically see a repeat of the high
Speaker 1: inflation that we saw in the nineteen seventies which didn't
Speaker 1: really end until the early nineteen eighties, either because Reagan
Speaker 1: busted some of the unions or because Paul Vulker came
Speaker 1: in and raised interest rates massively. How do you view
Speaker 1: the current labor market versus the nineteen seventies and what
Speaker 1: is the broader impact of the structure of what we
Speaker 1: have now on the rate of inflation. It's yeah, it's
Speaker 1: a million dollar question, and I don't know that. There
Speaker 1: are so many different possibilities that I don't think I
Speaker 1: would stand by any specific answer I give, you know,
Speaker 1: in the face of fire, because I think we really
Speaker 1: don't know. And when you look across many very very
Speaker 1: knowledgeable macro economists on these topics, there's a very wide
Speaker 1: divergence of opinions because we don't know. Having said that
Speaker 1: I would say there are aspects that look similar to
Speaker 1: the late sixties early seventies. You know, we've had a
Speaker 1: series of unfortunate supply shocks one after the other, which
Speaker 1: for US has been COVID happening several times as different
Speaker 1: supply chains are disrupted in different places. Um and then
Speaker 1: the war in Ukraine and in the sixties and seventies
Speaker 1: were obviously well in the early seventies with the oil
Speaker 1: price shocks, and then we've also had some to some
Speaker 1: degree at least a big demand shock in the US
Speaker 1: with the pandemic government spending slash fiscal stimulus packages. But
Speaker 1: I don't think we've seen the kind of massive sustained
Speaker 1: government spending that we saw in the late sixties, particularly
Speaker 1: with the Vietnam War and the Great Society. And so
Speaker 1: there's a there's an extent to which the demand impetus
Speaker 1: might have been smaller that now than it well at
Speaker 1: least less sustained than it was then. And the big
Speaker 1: question really is if if inflation is coming from a
Speaker 1: combination of things, but it's coming from a demand side,
Speaker 1: a supply side, too much money chasing too few goods,
Speaker 1: but also then it gets entrenched if expectations get in trench,
Speaker 1: so if it ratchets, the big question is what's happening
Speaker 1: now with the ratchet effect, and is what's happening now
Speaker 1: what was happening in the seventies. And that's where I think,
Speaker 1: as I think you're getting towards this work of power
Speaker 1: question comes in, which is is a wage price spiral
Speaker 1: less likely in a world with less work of power?
Speaker 1: And I would think almost certainly that answer is yes,
Speaker 1: just because in a world with union contracts with cost
Speaker 1: of living clauses plus x percent built in, that makes
Speaker 1: a wage price spiral that much more likely. In a
Speaker 1: world where private sector union membership is six percent in
Speaker 1: the US and the tight labor market is present right
Speaker 1: now but may not last forever as as interest rates
Speaker 1: continue to rise, it doesn't seem that likely to me
Speaker 1: that we're going to get stuck in one of those
Speaker 1: ratcheting labor to product market spirals. There are other ways
Speaker 1: inflation could stick, but I doubt that would be the
Speaker 1: one that it sticks as a result of I mean,
Speaker 1: this gets to like the sort of like perversity of
Speaker 1: what Tracy and I were talking about in the beginning,
Speaker 1: which is like, Okay, why do we care about inflation. Well,
Speaker 1: one of the reasons at least is because that erodes
Speaker 1: worker bargaining power and leads to declining standard of living.
Speaker 1: But then there's like this sort of weird thing where
Speaker 1: people like then take relief at lower wages because I
Speaker 1: guess that in theory means that inflation won't get entrenched.
Speaker 1: But lower wages are the thing we want to avoid
Speaker 1: in the first place, because that's another way of declining
Speaker 1: or sort of like staminating worker buying power. But it
Speaker 1: does seem that it's like frequently framed, and maybe it's
Speaker 1: because of this memory of it definitely feels like it's
Speaker 1: often framed implicitly in the conversation that we can't have
Speaker 1: sustained wage growth because that just means a spiral and
Speaker 1: workers ultimately running and place. Yeah, I I agree with
Speaker 1: you that it feels like a paradox. And I guess
Speaker 1: the the easy but not easy to achieve on st
Speaker 1: is we need sustained productivity growth and then you can
Speaker 1: have sustained wage growth. But you get worried if nominal
Speaker 1: wage growth is systematically outstripping productivity, because that's going to
Speaker 1: mean one of two things. Either it's going to mean
Speaker 1: that there's this big redistribution happening from capital to labor.
Speaker 1: That's one way that nominal wage growth can grow faster
Speaker 1: than productivity. Or it's because there's inflation and that's going
Speaker 1: to generate and stimulate more inflation in prices, and that
Speaker 1: means that, as you said, you're running to stand still.
Speaker 1: Which maybe that means no one on net is worse
Speaker 1: off on average, but some groups are going to lose
Speaker 1: out more than others, and inflations difficult in terms of planning,
Speaker 1: and there are worries about spirals and getting out of
Speaker 1: control and all these other sort of second order costs.
Speaker 1: So I mean, I would say it creates a problem
Speaker 1: in that if you want to redistribute, you're going to
Speaker 1: need nominal wage growth. It's faster than productivity growth, but
Speaker 1: you need to make sure that it's coming from an
Speaker 1: impetus that is about either productivity growth or redistribution, and
Speaker 1: not an impetus that seems driven by this demand demand cycle.
Speaker 1: So just finally to wrap up and looking forward a
Speaker 1: little bit more, and you sort of make the case
Speaker 1: why this is not likely to be the nineteen seventies.
Speaker 1: Nonetheless avoiding the nineteen seventies is a far cry from
Speaker 1: the sort of hopes of last of a year ago,
Speaker 1: when it's like, oh, maybe we're going to get a
Speaker 1: change in trajectory, and we have seen maybe a pickup
Speaker 1: in union activity, and of course I'm thinking about some
Speaker 1: of the stuff we're seeing it Amazon and Starbucks, which
Speaker 1: feels very organic, and you know, we still do have
Speaker 1: tight labor markets which may contribute some role. Do you
Speaker 1: see a potential for some sort of trajectory change. Are
Speaker 1: we in a position where we could affect that with
Speaker 1: right policy choices or is it still are we all?
Speaker 1: You know, still a lot of work to do in
Speaker 1: order to turn some of these trends around. So I'm
Speaker 1: both optimistic and pessimistic in the sense that it's always
Speaker 1: easy to take refuge in that, isn't it so optimistic
Speaker 1: in the sense that this does feel like an inflection point.
Speaker 1: If you compare this year last year to some extent,
Speaker 1: the union activity with the union activity in the US
Speaker 1: in you know, almost all of the last few decades,
Speaker 1: there's been a lot of energy, and there's been a
Speaker 1: lot of new organizing and places that we don't typically
Speaker 1: see its successful organizing as you mentioned Amazon and Starbucks
Speaker 1: being prime examples. We're also seeing up swells of organizing
Speaker 1: and things like care the care sector, which is another
Speaker 1: sector which is a which is very low paid and
Speaker 1: has had typically very difficult conditions. So in that sense,
Speaker 1: I think it feels like there's an inflection point. The
Speaker 1: ongoing type labor market creates conditions for that that, you know,
Speaker 1: the quit the high quick rates as people move to
Speaker 1: find better jobs or jobs that suit them better. And
Speaker 1: I think it shouldn't be underestimated that we have this
Speaker 1: ground swell of awareness and I think popular support from
Speaker 1: the pandemic which really laid bare how appalling conditions are
Speaker 1: for many people. You know, when it was when it
Speaker 1: was seen that people who were making going to be
Speaker 1: low wages and providing completely essential services to the economy
Speaker 1: were essentially being asked to risk death for themselves or
Speaker 1: their families without even the ability to have a certain
Speaker 1: amount of protective equipment or paid leave. I think people
Speaker 1: seeing that has has has generated some popular ups well
Speaker 1: and popular support for a rebalancing of power. So I
Speaker 1: think there is this is an unusual moment, This is
Speaker 1: a unique moment. We're also in a moment where the
Speaker 1: administration is very supportive of unions and strengthening unions. But
Speaker 1: the reason for pessimism is just that there's such a
Speaker 1: long way to go if you believe that that work
Speaker 1: of power is an important ingredient of of of change.
Speaker 1: Private sector unionization in the US is at six percent
Speaker 1: at its peak. It was one in three in the
Speaker 1: nineteen fifties, and over time there's a natural attrition anyway
Speaker 1: of unionization. You have to have a certain amount of
Speaker 1: union organizing activity just to keep the membership rate constant
Speaker 1: because you know, people retire, firms close, You've got to
Speaker 1: have that that rate organizing just to keep the rate
Speaker 1: flat at six percent. So the rates of organizing that
Speaker 1: would be needed successfully to reach the levels of unionization
Speaker 1: necessary to actually make a meaningful DNT in how pay
Speaker 1: is set in the economy is astronomically high. And that's
Speaker 1: where I think a lot more of a change really
Speaker 1: in the organizing environment, really underscored by policy, is necessary
Speaker 1: or would be necessary if that was the goal to achieve.
Speaker 1: All right, well, Anna, I'm glad we could end with
Speaker 1: like some optimism tempered by quite a bit of pessimism.
Speaker 1: That's all. That's all we can hope for it nowadays,
Speaker 1: I think, um Anna Standsbury, thank you so much for
Speaker 1: joining us that so much so, Joe. I think this
Speaker 1: is a fascinating topic, and there's clearly a lot of
Speaker 1: interest at the moment. But I guess I come away
Speaker 1: from that conversation thinking about how it feels like almost
Speaker 1: everything is geared towards like the structure of the of
Speaker 1: capitalism basically I know, and I didn't want to use
Speaker 1: that word, but it feels like the structure of capitalism
Speaker 1: is basically geared towards diverting benefits away from workers, unsurprisingly perhaps.
Speaker 1: And the other thing I would say, it's like there
Speaker 1: is a real effort underway. And I don't mean this
Speaker 1: in a good or bad way per se, but look,
Speaker 1: the goal of kind of everyone in power right is
Speaker 1: more or less it's like, let's get back to the economy, right,
Speaker 1: Like that would be I think a lot of people
Speaker 1: in power, particularly at the FED, would see that like
Speaker 1: as a pretty pretty huge wind to just get back
Speaker 1: there and sort of like all these trends, all these
Speaker 1: things we like, you know, the sort of the Pandora's
Speaker 1: box that was opened during the pandemic with could this
Speaker 1: being era of universal basic income and checks as a
Speaker 1: sort of automatic response to every downturn you see like
Speaker 1: the sort of white blood cells of the existing system,
Speaker 1: like attacking all the innovations and trying to like go
Speaker 1: back to the pre pandemic status quo. Yeah. But also
Speaker 1: it's weird, as you pointed out, this idea that inflation
Speaker 1: is bad, but wage increases to offset inflation are also
Speaker 1: bad because in theory that increases inflation, and so you
Speaker 1: almost have like a collective action problem. Yeah, And like
Speaker 1: I feel like one of the messages is like, well,
Speaker 1: increasing labor share is actually impossible, is the implicit message?
Speaker 1: Like that makes no sense because labor share changes. But
Speaker 1: the implicit messages you can't if if higher wages I
Speaker 1: mean higher inflation, then why you achieve higher wages and
Speaker 1: you just you don't get anywhere with workers. There's like
Speaker 1: this like core con contradiction much of the discourse. I
Speaker 1: would say, yeah, I think that's right. Shall we leave
Speaker 1: it that? Let's leave it there. Okay. This has been
Speaker 1: another episode of the All Thoughts podcast. I'm Tracy Alloway.
Speaker 1: You can follow me on Twitter at Tracy allow and
Speaker 1: I'm Joe Wi isn't thal. You can follow me on
Speaker 1: Twitter at the Stalwart. Follow our guest Anna Stansbury on Twitter.
Speaker 1: She's at Anna Stansbury. Follow our producer Carmen Rodriguez at
Speaker 1: Carmen Armann, and check out all of our podcasts at
Speaker 1: Bloomberg under the handle at podcasts. Thanks for listening,