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Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.

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Speaker 1: I'm Joe Wisnal and I'm Tracy. Tracy. I'm gonna say

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Speaker 1: something and I don't think it's particularly sort of controversial,

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Speaker 1: but this is my assessment. No, no, no, this is

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Speaker 1: my basic assessment of where we are, like big picture,

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Speaker 1: like you know, over two years since the start of

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Speaker 1: the pandemic, which is that the labor market has recovered

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Speaker 1: far faster than anyone would have expected in March and April.

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Speaker 1: And the big issue now, of course, is the sort

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Speaker 1: of above trend, significantly above trend, above target inflation. So

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Speaker 1: that's not controversial, that's right. I mean, yes, if you

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Speaker 1: look at headline unemployment, I think it's a what is

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Speaker 1: it three point five or three point six percent? Three

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Speaker 1: three point five percent for July. But I think the

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Speaker 1: controversy or where there is a lot of disagreement is

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Speaker 1: over what that's telling you exactly, because if you look

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Speaker 1: at some other indicators of labor market health, things like

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Speaker 1: the participation rate, those show a very different picture, very

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Speaker 1: different picture. You're totally right. So I'm looking at the

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Speaker 1: overall labor force participation rate here on the Bloomberg and

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Speaker 1: as the latest reading it's sixty two point one PENT

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Speaker 1: pre crisis February sixty three point four. So it is

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Speaker 1: clearly like by this measure we have clearly not recovered.

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Speaker 1: And of course this was trending down through much of

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Speaker 1: the post Great Financial Crisis period, it started picking up,

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Speaker 1: started gaining steam in so by this measure we've suffered

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Speaker 1: a setback, a real reset perhaps. Yeah. And this is

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Speaker 1: where a lot of the tension in dissecting the labor

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Speaker 1: market exists right now. This idea that the unemployment rate

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Speaker 1: is really really low, but there is also this narrative

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Speaker 1: that no one wants to work anymore and that it's

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Speaker 1: hard for companies to find the right workers and things

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Speaker 1: like that. And even within the labor participation rate, there

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Speaker 1: are variations between gender, between race and age and things

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Speaker 1: like that. So there's a lot to discuss, right So,

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Speaker 1: you know, one other statistic that's important part of the

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Speaker 1: story with declining labor for force participation might be retirees.

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Speaker 1: You have a lot of old people who maybe after

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Speaker 1: the pandemic hit the like retirement, great retirement, etcetera. But

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Speaker 1: that can't explain the entire story because even if you

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Speaker 1: look at say employment to population for fift year old

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Speaker 1: sort of so called prime age workers. Another way of

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Speaker 1: measuring sort of labor force participation, that's at eight percent,

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Speaker 1: not too bad. But again, prior to the crisis, we're

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Speaker 1: at eighty point five percent. And so again, you know,

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Speaker 1: these some of these things like say old people retired,

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Speaker 1: like they don't seem to explain the full story anyway.

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Speaker 1: The bottom line is there still seems to be some

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Speaker 1: mystery about like what's going on with labor. Yeah, well,

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Speaker 1: the mystery is, you know, if you look at unemployment,

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Speaker 1: it all looks great, everyone seems to be working. If

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Speaker 1: you look at some other things then, especially anecdotal data

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Speaker 1: from companies who say they're having trouble finding workers, then

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Speaker 1: it seems like no one's working. You know what, Let's

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Speaker 1: talk to someone who is much smarter than us and

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Speaker 1: who knows a lot about the labor market data, and

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Speaker 1: in fact that's their entire role, their entire job. We're

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Speaker 1: gonna be speaking today with Joel Gamble. She is the

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Speaker 1: chief economist at the Department of Labor, and she's going

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Speaker 1: to clear all of this stuff up for us, hopefully. So, Joel,

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Speaker 1: thank you so much for coming on the podcast you're

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Speaker 1: going to you're gonna answer all our questions. We're gonna

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Speaker 1: walk away from here without a mystery. But in all seriousness,

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Speaker 1: you know, I remember, in the wake of the Great

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Speaker 1: Financial Crisis, we had also a big drop in labor

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Speaker 1: force participation rate, employment, the population ratio, and people said

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Speaker 1: things like, oh, this is like a structural change in

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Speaker 1: the labor market. Something happened, that's just different, And it

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Speaker 1: turned out most of those people are wrong. We just

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Speaker 1: needed a stronger economy, and when growth picked up, most

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Speaker 1: of the jobs came back, and we actually, uh, you know,

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Speaker 1: we did eventually get all the jobs back. It just

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Speaker 1: took way too long because growth was so sluggish. Do

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Speaker 1: you see evidence of a more structural shift in who's

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Speaker 1: working these days post pandemic or is this going to

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Speaker 1: be another story where everyone is quick to rush to

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Speaker 1: pronounce structural change but really it's just a matter of

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Speaker 1: time before full normalization. Well, I think in a very

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Speaker 1: online world there's often, you know, a rush to assess

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Speaker 1: the state of the labor market. But I see things

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Speaker 1: a few ways when there are real through lines that

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Speaker 1: are trends, especially when we're talking about the labor force

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Speaker 1: participation rate right there's an aging population, for example, you

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Speaker 1: know there's gender shifts, particularly with labor force participation rates

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Speaker 1: for men, particularly white men, declining over time. That was

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Speaker 1: pre pandemic, that was occurring during the recovery from the

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Speaker 1: Great Recession um and so there are there are real

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Speaker 1: things that are more structural. I would think would also

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Speaker 1: include immigration in the way that's affecting overall labor supply

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Speaker 1: as a structural change. Those administration is doing all we

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Speaker 1: can to increase authorized immigration and fixing some of the

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Speaker 1: mistakes that were made by the last administration. But there's

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Speaker 1: also some things that may be unique to what we've

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Speaker 1: just experienced, which was a huge disruption to the US economy,

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Speaker 1: a deep recession, and a really fast recovery. I think

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Speaker 1: Claudia Golden actually has a really interesting working paper that

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Speaker 1: came out this year that highlights kind of the relationship

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Speaker 1: between some of the pre pandemic labor market trends and

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Speaker 1: how we assess it today, particularly the fact that, for instance,

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Speaker 1: there's a big run up and female labor force participation

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Speaker 1: right before the pandemic recession, and that matters for how

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Speaker 1: we think about female labor force participation today, and that

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Speaker 1: big increase in the run up right before the recession

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Speaker 1: was among you know, women with lower levels of education,

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Speaker 1: young children, younger women, they're more marginally attached. Those are

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Speaker 1: also some of the women whom we could see coming

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Speaker 1: back now and that would improve labor force participation. In fact,

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Speaker 1: education believe is a big role. For instance, both men

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Speaker 1: without college degrees and women without college degrees who are

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Speaker 1: in their prime age working years could come back to

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Speaker 1: the labor market and you know, improve labor force participation.

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Speaker 1: That's an addition to like the fact that people die,

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Speaker 1: there's excess retirements, all those other stories that we've been

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Speaker 1: talking about. So there's a mix of structural trends and

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Speaker 1: there are some unique things that are happening right now,

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Speaker 1: um that are affecting, you know, the composition of the

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Speaker 1: labor force. Could you dive in a little bit more

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Speaker 1: into the gender discrepancy in labor force participation because if

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Speaker 1: you chart, for instance, the participation rate for prime age

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Speaker 1: women versus prime age men, those two lines just go

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Speaker 1: in very different directions. So for men, you know, it's

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Speaker 1: been trending down for a while. For women, it's been

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Speaker 1: trending up right up until COVID hit as you mentioned,

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Speaker 1: but it certainly recovered a lot faster than the male

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Speaker 1: participation rate. What's going on there? So I think a

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Speaker 1: few things are happening, but I think it's important to

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Speaker 1: delineate even within gender different populations. Right women are not

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Speaker 1: a monolith. Men are not a monolith. And I think

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Speaker 1: it's important to do that in part because, you know,

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Speaker 1: we think about how the recession affected women and their

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Speaker 1: labor force participation rate. You know, the ability to work

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Speaker 1: from home likely played a big role. Women with higher

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Speaker 1: of levels of education, you know, even if they still

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Speaker 1: had caregiving duties, were more like, we're more able to

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Speaker 1: keep their jobs. Women who had to go in person

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Speaker 1: for work, whether they were mothers or not, were more

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Speaker 1: likely to have to you know, lose their job, get

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Speaker 1: laid off, etcetera. And so I do think that the

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Speaker 1: education plays an important role there. And then in terms

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Speaker 1: of you know, the labor force participation rate right now,

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Speaker 1: I think this is a very well told story. Worry that,

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Speaker 1: you know, for women, the ability to into the workforce

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Speaker 1: is affected by a number of factors, including including care

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Speaker 1: including you know, workplace safety, including school policies as well,

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Speaker 1: and so I think there's there's a pretty complex story there,

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Speaker 1: but I would really underline the importance of, you know,

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Speaker 1: looking at the nuance within the population of women in

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Speaker 1: the U. S. Economy, and we can get into race

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Speaker 1: as well. I think that's that's important too. Obviously, even

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Speaker 1: last year, there were a lot of schools that were disrupted,

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Speaker 1: They that weren't open the entire year. Both of my

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Speaker 1: I think at least one of my kids definitely head

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Speaker 1: days where they had to stay home due to the

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Speaker 1: school being closed due to COVID. Do you see significant

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Speaker 1: potential upside gained still for women once we get to

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Speaker 1: a place in which the care question to some extent

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Speaker 1: is at least no longer uncertain. Maybe not as ideal

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Speaker 1: as it would be in the sort of ideal scenario

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Speaker 1: of like universal child care, but something or at least

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Speaker 1: like the uncertainty of whether you're going to have someone

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Speaker 1: watch your kids during the day goes away. I think

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Speaker 1: the word uncertainty is key there, because when you have

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Speaker 1: certainty about childcare arrangements, for example, or other care arrangements,

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Speaker 1: that enables you to plan, That enables you to plan

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Speaker 1: either of your having to work from home, you know,

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Speaker 1: or it'll enables you to plan to go in person,

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Speaker 1: especially as more people feel comfortable going into work or

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Speaker 1: more employers feel comfortable asking their workers to come in

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Speaker 1: and so you know, there's probably some upside risk there,

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Speaker 1: but as you also mentioned, you know there are bigger

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Speaker 1: investment needs in that space. So setting women aside, which

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Speaker 1: is a terrible phrase, if we focus on the male

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Speaker 1: participation rate for a second, I'm still wondering, like, why

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Speaker 1: has that been trending down for so long and why

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Speaker 1: does it seem to be struggling to recover. What do

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Speaker 1: you see there, because I imagine you see a mix

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Speaker 1: of the data but also you know, some anecdotes as well. Yes,

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Speaker 1: I think I think it's a few things in terms

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Speaker 1: of why it's been declining downward. Um, there are some

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Speaker 1: structural challenge there in terms of access to opportunity. It

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Speaker 1: depends on heavily by race to you know, folks who

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Speaker 1: are interacting with the criminal justice system are also you know,

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Speaker 1: going to struggle more defined employment to get discouraged to

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Speaker 1: end up leaving the labor force. You know, there are

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Speaker 1: people who are not in the labor force right so

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Speaker 1: they're not participating, But who do actually want a job.

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Speaker 1: But I think it's an important distinction and to make

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Speaker 1: here that not everyone who wants a job is actively

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Speaker 1: looking by the way we measure it in in the

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Speaker 1: Bureau of Labor Statistics surveys, so there are challenges there. Um.

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Speaker 1: I also think that frankly, you know, this is a

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Speaker 1: place where tighter labor markets can help. You know, I

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Speaker 1: mentioned women with lower levels of education being mark more market,

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Speaker 1: I'm more likely to be marginally attached. That also can

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Speaker 1: happen for men, particularly for for black men, And we're

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Speaker 1: actually seeing for black men at least a much higher

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Speaker 1: level of employee or a much faster employment recovery than

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Speaker 1: in the last recovery. So for example, their prime, their

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Speaker 1: employments population level has been pretty elevated for for some time.

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Speaker 1: Why do you why do you think it's been so

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Speaker 1: the trajectory has been so different. I mean this way

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Speaker 1: for years, you know, post grade financial crisis, Like we

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Speaker 1: talked about this slow recovery and all of these measures,

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Speaker 1: and we talked about there's this huge gap between white

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Speaker 1: unemployment and black unemployment, and it's still high, but it's

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Speaker 1: closed a lot faster than, you know, than anything that

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Speaker 1: we've seen post grade financial crisis, and A why do

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Speaker 1: you think that is? And B is this something that

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Speaker 1: you think we can build on as an economy and

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Speaker 1: that some of these gains can be locked in and

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Speaker 1: that the benefits of having a job that seemed to

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Speaker 1: you know that have lots of positive externalities long term benefits.

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Speaker 1: Is this something from the current environment that you see

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Speaker 1: is benefiting the economy for years to come. Yes, So

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Speaker 1: there's a lot a lot to unpack there. But I

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Speaker 1: think to your observation about the unemployment gaps, that is,

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Speaker 1: you know, an important aspect of this recovery, right, the

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Speaker 1: gap between black unemployment and white unemployment, or Hispanic unemployment

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Speaker 1: and white unemployment, tends to be correlated with the business cycle.

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Speaker 1: So when you see a fast recovery, um you see

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Speaker 1: a lower ratio of of unemployed persons to vacancies, then

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Speaker 1: you are more likely to see better labor market outcomes

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Speaker 1: relative to a looser labor market for black and Hispanic workers.

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Speaker 1: So that is definitely part of the story. I think

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Speaker 1: the nature of the recovery may have particularly helped the

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Speaker 1: black men in terms of obtaining a job. So you know,

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Speaker 1: there was a big increase in consumption on goods relative

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Speaker 1: to services last year, and that has ripple effects along

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Speaker 1: supply chains, including through e commerce and transportation and warehousing jobs,

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Speaker 1: those kinds of moving jobs, frankly that black men disproportionately hold,

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Speaker 1: So that's probably a part of the story there, though

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Speaker 1: I will also, of course note that those are not

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Speaker 1: always the best quality jobs, and so we do want

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Speaker 1: to improve them. The Department has an initiative called the

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Speaker 1: Good Jobs Initiative that's really focused on that because we're always,

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Speaker 1: you know, so worried in these recoveries about getting jobs,

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Speaker 1: and now we're at the point where we at least

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Speaker 1: get a chance to think about are these good jobs?

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Speaker 1: How can we give people choices um in this labor market?

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Speaker 1: So do you think that that's certainly a part of

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Speaker 1: it in terms of locking in gains. That is a

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Speaker 1: huge policy question and policy priority for us at the

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Speaker 1: Department of Labor, in part because we want to make

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Speaker 1: sure that workers have rights, they have protections through of

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Speaker 1: course enforcement, whether it's discrimination issues, wage theft, etcetera. We

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Speaker 1: also want to make sure that workers who want jobs

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Speaker 1: have pathways. Sometimes you know, you don't have these clear

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Speaker 1: pathways to jobs based off where you live, you know,

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Speaker 1: based off of your social network, etcetera. And so you know,

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Speaker 1: creating pathways for training, apprenticeships, connections to employers who offer

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Speaker 1: good jobs is also really important part of lucking and games.

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Speaker 1: And then of course, you know, ensuring that workers do

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Speaker 1: have power when they're on the job. This is an

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Speaker 1: administration that cares deeply about supporting workers choice to join

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Speaker 1: a union if they want to. And Tracy just looking

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Speaker 1: at the charge here. You know, in summer, so basically

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Speaker 1: like over four years after like the financial crisis started,

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Speaker 1: the gap between white and black unemployment was seven points

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Speaker 1: six percent. Today is down to two point nine percent.

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Speaker 1: So the speed with which this isn't compressed, which often

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Speaker 1: happens in a in a business cycle as it goes on,

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Speaker 1: is just clearly much faster than anything we saw in

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Speaker 1: the past. This kind of leads into another question. So,

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Speaker 1: if black men are disproportionately present in industries like warehouse

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Speaker 1: or warehousing, aren't transportation and things like that, do you

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Speaker 1: worry that those gains won't be sustainable if we do

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Speaker 1: see consumers start to pull back. You know, for instance,

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Speaker 1: we've seen some of the big box retailers talk about

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Speaker 1: having too much inventory at the moment, do some of

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Speaker 1: those jobs start to look vulnerable. I mean, I wish

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Speaker 1: that this was a new story for black workers, but unfortunately,

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Speaker 1: you know, there's a I think a phenomenon that is

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Speaker 1: kind of common parlance these days, which is last five,

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Speaker 1: last hired, first fired. And so, you know, frankly, black workers,

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Speaker 1: black men and black women are often you know, the

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Speaker 1: most reliant on the labor markets strength to be able

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Speaker 1: to achieve better outcomes, and so you know, yes, I'm

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Speaker 1: always worried about, you know, making sure that they have

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Speaker 1: pathways to know better jobs, jobs that are sustainable. At

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Speaker 1: the same time, we also want to see sustained labor

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Speaker 1: market progress. As a department, we're focused on outcomes, So

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Speaker 1: wage growth that's sustainable is important here. You know, the

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Speaker 1: ability for workers to find trainings and apprenticeships and access

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Speaker 1: other jobs if they want to, especially if they're industries

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Speaker 1: where job quality isn't great, or industries that are particularly

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Speaker 1: susceptible to swings in the business cycle. And you know,

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Speaker 1: I think that that's kind of the best way to

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Speaker 1: kind of bridge that gap, to not just rely on

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Speaker 1: where we are at in the business cycle, but to

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Speaker 1: instead make investments in you know, long run growth and

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Speaker 1: making sure that the benefits of that growth is shared.

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Speaker 1: So I want to get your take. And I on

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Speaker 1: a question, and I posed this to Goldman sex as

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Speaker 1: chief economist Jan Hatzi is a few weeks ago. But okay, everyone,

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Speaker 1: tight labor market, tight labor market. We're companies having a

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Speaker 1: hard time hiring. We hear about that all the time,

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Speaker 1: and yet wage growth has been negative. And this is

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Speaker 1: and this has sort of been the frustration of a

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Speaker 1: lot of people that's like, yes, there are jobs out there,

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Speaker 1: but wages aren't keeping up with prices. If the labor

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Speaker 1: market is really so tight, why aren't workers able to command,

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Speaker 1: in your view, strong high enough wages such that they

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Speaker 1: can outpace the pace of inflation high end of raises. Sorry,

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Speaker 1: So it's absolutely an important question, And first off, I

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Speaker 1: would just say it emphasizes why it's so important to

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Speaker 1: get inflation down to a reasonable level. We saw that

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Speaker 1: in July because real wages increase the zero point flag percent, right,

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Speaker 1: because cp I was unchanged at one, which is just

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Speaker 1: one measure of inflation, but it was unchanged for the

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Speaker 1: month of July UM and so so I think that

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Speaker 1: that's a very important piece of the puzzle in part

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Speaker 1: because you know, workers can feel when the cost of

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Speaker 1: living isn't up to you know, what they would like

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Speaker 1: it to be. It's important too, I think, to think

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Speaker 1: about some of the mechanisms by which sustained increases happen.

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Speaker 1: One and also to think about the labor market not

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Speaker 1: is just like this aggregate you know phenomenon, but actually

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Speaker 1: a lot of different sectors industries that interact and that

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Speaker 1: have different kind of needs and different standards for their workers.

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Speaker 1: So at like a kind of big picture, you know level,

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Speaker 1: you know, the mechanisms by which sustained wage increases happen

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Speaker 1: in the long run or not just a tight labor market,

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Speaker 1: though we're seeing that in this labor market, new workers

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Speaker 1: have choice, they get bargaining power and switching jobs it's

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Speaker 1: a good way to get a wage increase UM. But

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Speaker 1: there's also mechanisms that are important, like you know, having

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Speaker 1: bargaining power, whether it's through unions or some other collective

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Speaker 1: action mechanism that allows you to negotiate changes in your

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Speaker 1: employment contract like cost of living increases UM. So cola

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Speaker 1: contract cola clauses and clauses and contracts can help there

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Speaker 1: so that's another thing that we're just not seeing quite

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Speaker 1: the same level of in part because as the undensity decline,

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Speaker 1: the prevalence of cola contract and cola clauses and contracts

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Speaker 1: also declined. UM. So there are some of the typical

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Speaker 1: mechanisms that may have existed decades ago, um that allow

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Speaker 1: workers to have power enough power to negotiate wage increases

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Speaker 1: that top inflation mechanically, UM, that just aren't quite there

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Speaker 1: in the same way. And then the last piece I

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Speaker 1: will say is that I do think this question also

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Speaker 1: varies by sector, in part because we're seeing I think

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Speaker 1: the New York Fed actually had a publication on this

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Speaker 1: where the sectors that are the farthest from full recovery,

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Speaker 1: so the farthest below their February employment level, are the

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Speaker 1: ones where we're seeing the highest wage growth. Those are

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Speaker 1: also the sectors where you know, labor costs are a

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Speaker 1: higher share of total firm costs, And so there's a

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Speaker 1: different story bisector. It's not just like an aggregate wage

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Speaker 1: growth figure that we often see that reported in the news.

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Speaker 1: Can you talk a little bit more about how some

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Speaker 1: of the videos syncrasies around the pandemic have impacted the

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Speaker 1: labor market and whether or not you still see those

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Speaker 1: as forces UM affecting the labor market as a whole.

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Speaker 1: And I'm thinking specifically of things like the p p P,

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Speaker 1: the paycheck Protection program UM, and also of course the

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Speaker 1: impact of COVID itself and people who may have to

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Speaker 1: stay out of the workforce because they're taking care of

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Speaker 1: people who are ill or those who have unfortunately incurred

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Speaker 1: things like long COVID. How are those affecting the labor market.

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Speaker 1: Is there still a big effect from things like that,

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Speaker 1: That's a great question. I think there are a few

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Speaker 1: things that I think about when I think about the

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Speaker 1: effects of COVID, you know, on the labor market. You know, first,

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Speaker 1: I think this will be the subject of maybe one

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Speaker 1: thousand research papers in the coming coming years, especially the

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Speaker 1: relationship between the federal policy response and the labor market today.

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Speaker 1: But we do know righte that strong federal policy response

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Speaker 1: kept incomes relatively unchanged or by some measures that improved

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Speaker 1: on average, and so that was really important because the

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Speaker 1: income can translate into spending, which can translate into job creation.

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Speaker 1: On the small business response, this seemed to be particularly

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Speaker 1: helpful early on in the labor market recovery, because there's

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Speaker 1: been studies that have found that, you know, small business relief,

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Speaker 1: particularly PPP, helped increase employment, in particular through increasing the

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Speaker 1: percentage of workers who were recalled from layoffs. We also

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Speaker 1: know that leofs were a big of unemployment early in

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Speaker 1: the pandemic recession. UM so I do think that there's

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Speaker 1: some clear things about not just the pandemic but the

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Speaker 1: response to the pandemic that have impacted the labor market today.

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Speaker 1: Their persistence, I think is is unclear to me at

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Speaker 1: this point. But we did just see five thousand new

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Speaker 1: jobs at it last month, and so I'm not sure

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Speaker 1: if that question will come to a head just yet.

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Speaker 1: On some of the other trends that I think are

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Speaker 1: really important in the labor market because of the pandemic. No,

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Speaker 1: one piece that we haven't talked about yet, I think

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Speaker 1: is is productivity. And so you know, I think there's

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Speaker 1: been a really healthy debate around what is happening with

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Speaker 1: labor market productivity. You know, it's both a statistical phenomenon

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Speaker 1: output over hours worked, as well as a real economic phenomenon.

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Speaker 1: So you know, our ability to produce more given the

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Speaker 1: same inputs, including workers producing more with the same effort

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Speaker 1: and on both friends. It's hard to measure this monthly

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Speaker 1: or even the quarterly changes that we get because there's

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Speaker 1: so much that can swing month a month in terms

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Speaker 1: of business investment, in hiring um and yearly data is better,

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Speaker 1: so I will caveat with that, but I do think

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Speaker 1: that it does raise some some questions and there has

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Speaker 1: been some interesting research on that front that I think

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Speaker 1: is worth noting. One around, just like the way in

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Speaker 1: which the pandemic may be affecting these kind of short

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Speaker 1: term prints on productivity that we're getting, so you know,

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Speaker 1: there could be uh, it could be possible that, for instance,

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Speaker 1: you know, productivity rose above trend in one as businesses

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Speaker 1: produced more with fewer workers, and that we're you know,

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Speaker 1: now kind of recalibrating where businesses are hiring more workers

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Speaker 1: and workers aren't average producing or working fewer hours. So

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Speaker 1: output is you know, roughly constant or slightly negative. And

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Speaker 1: then there's also you know, something else that could have happened,

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Speaker 1: which is frankly that you know, during the pandemic, businesses

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Speaker 1: operated with fewer workers because sick workers also affected overall

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Speaker 1: from productivity, or frankly, workers were clocking the same number

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Speaker 1: of hours but working less because of supply chain disruptions.

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Speaker 1: And then finally, you know, it could be a compositional

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Speaker 1: effect where right now we're seeing you know, stronger employment

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Speaker 1: gains in lower productivity sectors like leisure and hospitality. That

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Speaker 1: does not, of course mean those workers are not valuable.

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Speaker 1: I just mean in macro terms, and so that could

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Speaker 1: just be shifting the overall productivity numbers, and I think

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Speaker 1: that's important in the short run. But then on the

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Speaker 1: long term there are also possibly meaningful changes on the

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Speaker 1: kind of you know, productivity as a real economic phenomenon,

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Speaker 1: because before I think I was talking about more as

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Speaker 1: like a statistical phenomenon, but here as like a real

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Speaker 1: economic phenomenon, So things like the effects of work from

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Speaker 1: home or automation that might have taken place in workplaces

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Speaker 1: due to safety or labor supply concerns. And so I

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Speaker 1: think there are some real questions here that are are

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Speaker 1: yet to be you know, completely sorted out, but I

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Speaker 1: think are really important and a big part of how

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Speaker 1: I'm thinking about the labor market, in part because productivity

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Speaker 1: is so important for making sure wage growth is sustainable

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Speaker 1: for workers. And at the Department of labor. We just

433
00:23:56,280 --> 00:23:58,480
Speaker 1: really want to see workers get paid what they're do. Yeah,

434
00:23:58,520 --> 00:24:01,080
Speaker 1: I mean one thing in their hip been corporate executive

435
00:24:01,160 --> 00:24:04,560
Speaker 1: talking about this on conference calls Neil Data, Renaissance Macro

436
00:24:04,760 --> 00:24:07,720
Speaker 1: has flagged this, Like, I wonder if part of the

437
00:24:07,760 --> 00:24:10,600
Speaker 1: productivity story is like if a bunch of people just

438
00:24:10,640 --> 00:24:14,919
Speaker 1: started jobs relatively recently, Like no one is particularly productive

439
00:24:14,960 --> 00:24:17,080
Speaker 1: in their first month at a new job, and that's

440
00:24:17,119 --> 00:24:19,520
Speaker 1: slightly exaggeration. Not everyone is at their first month, but

441
00:24:19,600 --> 00:24:23,240
Speaker 1: in a period of a lot of labor market churn

442
00:24:23,440 --> 00:24:25,240
Speaker 1: and new hiring, and you mentioned that half a million

443
00:24:25,320 --> 00:24:27,600
Speaker 1: jobs that were created last month, whether we still are

444
00:24:27,640 --> 00:24:29,399
Speaker 1: just in this sort of state of flux in which

445
00:24:29,600 --> 00:24:32,480
Speaker 1: we haven't gotten into sort of people finding their groove

446
00:24:32,560 --> 00:24:35,720
Speaker 1: and businesses operating at a predictable clip again, I mean,

447
00:24:35,720 --> 00:24:37,880
Speaker 1: that seems like a reasonable theory to me, and it's

448
00:24:38,040 --> 00:24:40,119
Speaker 1: kind of plays into the composition piece that I mentioned

449
00:24:40,119 --> 00:24:42,520
Speaker 1: about workers who are coming online and how that affects

450
00:24:42,520 --> 00:24:45,399
Speaker 1: the top line figures. So there's one other thing that

451
00:24:45,440 --> 00:24:48,520
Speaker 1: we haven't really spoken about yet, and that's the wealth effect.

452
00:24:48,680 --> 00:24:51,040
Speaker 1: So this was also, you know, a pet theory of

453
00:24:51,080 --> 00:24:53,200
Speaker 1: the past couple of years. When it comes to explaining

454
00:24:53,359 --> 00:24:57,440
Speaker 1: lower participation rates. The idea that well, you know, maybe

455
00:24:57,440 --> 00:24:59,760
Speaker 1: if you're older, or even if you're not older, but

456
00:25:00,040 --> 00:25:02,679
Speaker 1: say you invested a lot in crypto or something like

457
00:25:02,720 --> 00:25:05,440
Speaker 1: that a year ago, or how to house it right,

458
00:25:05,920 --> 00:25:09,280
Speaker 1: or a stock portfolio or whatever. If you saw a

459
00:25:09,359 --> 00:25:13,200
Speaker 1: lot of gains in those financial assets, you might think, well,

460
00:25:13,400 --> 00:25:16,719
Speaker 1: it's not really worth working anymore. I can sit this

461
00:25:16,760 --> 00:25:20,080
Speaker 1: one out, you know, wait for COVID maybe to blow over,

462
00:25:20,440 --> 00:25:22,959
Speaker 1: and then rejoin the workforce if I want to, or not,

463
00:25:23,119 --> 00:25:26,040
Speaker 1: if I'm financially able to sit it out. How are

464
00:25:26,040 --> 00:25:29,199
Speaker 1: you viewing that kind of wealth effect? Is that a

465
00:25:29,240 --> 00:25:33,199
Speaker 1: tangible thing in your opinion? It certainly makes sense on

466
00:25:33,240 --> 00:25:35,960
Speaker 1: the surface, and I think it's part of what's enabling

467
00:25:36,200 --> 00:25:40,520
Speaker 1: workers to have some choice in the labor market. They

468
00:25:40,520 --> 00:25:42,720
Speaker 1: didn't have to rush back to a job that wasn't

469
00:25:42,920 --> 00:25:46,560
Speaker 1: their ideal job, So there's some increasing worker power that's

470
00:25:46,560 --> 00:25:50,480
Speaker 1: happening there. I am, on the surface, at least skeptical

471
00:25:50,520 --> 00:25:53,119
Speaker 1: of it being a long run challenge, in part because

472
00:25:53,760 --> 00:25:56,400
Speaker 1: you know, savings can run out, especially for workers who

473
00:25:56,400 --> 00:25:58,199
Speaker 1: don't have a lot of wealth, which is frankly a

474
00:25:58,200 --> 00:26:01,000
Speaker 1: lot of workers, and and also in heart, because so

475
00:26:01,119 --> 00:26:04,680
Speaker 1: much about our financial well being as Americans is reliant on,

476
00:26:05,359 --> 00:26:08,159
Speaker 1: you know, our job, not just the check paychecks we

477
00:26:08,240 --> 00:26:11,879
Speaker 1: take home, but also things like health insurance and retirement

478
00:26:11,880 --> 00:26:14,040
Speaker 1: benefits if we are fortunate enough to have a job

479
00:26:14,119 --> 00:26:16,960
Speaker 1: or we have those. And so at a certain point,

480
00:26:17,240 --> 00:26:19,960
Speaker 1: that kind of strategy will not work well for a

481
00:26:20,000 --> 00:26:24,600
Speaker 1: significant chunk of workers, even if it does help workers today,

482
00:26:25,040 --> 00:26:28,160
Speaker 1: I'm on the whole have more bargaining power. So how

483
00:26:28,240 --> 00:26:31,840
Speaker 1: concerned are you that? You know, we do have very

484
00:26:31,920 --> 00:26:35,600
Speaker 1: high inflation still, and the Fed is in tightening mode,

485
00:26:35,720 --> 00:26:40,960
Speaker 1: and the mechanism, more or less people dance around it

486
00:26:40,960 --> 00:26:43,160
Speaker 1: a little bit sometimes, but the mechanism more or less

487
00:26:43,240 --> 00:26:46,159
Speaker 1: to combating inflation through rate hikes is to weaken the

488
00:26:46,240 --> 00:26:49,560
Speaker 1: labor market, weaken wage growth, and hope that that's sort

489
00:26:49,560 --> 00:26:51,879
Speaker 1: of like slowest things down. And maybe there's this hope

490
00:26:52,240 --> 00:26:54,520
Speaker 1: that we can take care of most of it just

491
00:26:54,520 --> 00:26:57,600
Speaker 1: by reducing job openings and relieving some of the pressure there.

492
00:26:57,600 --> 00:27:00,879
Speaker 1: But how concerned are you? A followed like some of

493
00:27:00,920 --> 00:27:05,080
Speaker 1: these gains that we've talked about unwinding as part of

494
00:27:05,119 --> 00:27:08,840
Speaker 1: the anti inflation efforts. So I first must start off

495
00:27:08,880 --> 00:27:13,840
Speaker 1: with an awkward disclaimer, which is I have full respect,

496
00:27:13,920 --> 00:27:16,639
Speaker 1: as this administration does for the FEDS independence on these issues.

497
00:27:16,640 --> 00:27:19,560
Speaker 1: So I will not comment on FED policy. Okay, Um,

498
00:27:19,800 --> 00:27:23,760
Speaker 1: So I think a few things. One, I think this

499
00:27:23,840 --> 00:27:26,440
Speaker 1: is why it's so important to see sustainable wage growth

500
00:27:26,480 --> 00:27:31,199
Speaker 1: in the labor market, to see participation increase and to

501
00:27:31,240 --> 00:27:33,879
Speaker 1: see wage growth, you know, reflecting the values work, the

502
00:27:33,960 --> 00:27:36,280
Speaker 1: value that workers bring to business. Like I want to

503
00:27:36,320 --> 00:27:38,000
Speaker 1: see wage growth, of course, I want to see sustainable

504
00:27:38,040 --> 00:27:42,439
Speaker 1: wage growth. I also, you know, I'm really fascinated by slash.

505
00:27:42,440 --> 00:27:46,040
Speaker 1: I've been following this really important debate in macro economics.

506
00:27:46,080 --> 00:27:49,600
Speaker 1: I'm macro economist, so I will fully fully claim that

507
00:27:49,600 --> 00:27:54,720
Speaker 1: I am just following it around. You know, wow, how

508
00:27:54,800 --> 00:27:58,560
Speaker 1: we might land softly? How we might actually achieve a

509
00:27:58,600 --> 00:28:03,920
Speaker 1: soft landing here? And it really does seem like there

510
00:28:03,920 --> 00:28:06,280
Speaker 1: are a few ways things can go, but it doesn't

511
00:28:06,280 --> 00:28:11,159
Speaker 1: seem completely improbable. Um in part because frankly, as you

512
00:28:11,200 --> 00:28:14,480
Speaker 1: all know, as observers of this debate as well, there's

513
00:28:14,520 --> 00:28:17,520
Speaker 1: a lot of wonky signals out there in terms of

514
00:28:17,520 --> 00:28:21,600
Speaker 1: what's going on in the macroeconomy. We saw three consecutive

515
00:28:21,600 --> 00:28:24,000
Speaker 1: months of job openings decline without major movement and the

516
00:28:24,040 --> 00:28:27,760
Speaker 1: unemployment rate, which again it's it's premature to say there

517
00:28:27,760 --> 00:28:30,520
Speaker 1: we go, mission accomplished. But you know, things could go

518
00:28:30,560 --> 00:28:32,359
Speaker 1: a lot of different ways. We could see a vertical

519
00:28:32,400 --> 00:28:36,080
Speaker 1: fallen job openings, and things might work out the beverage curve,

520
00:28:36,119 --> 00:28:39,240
Speaker 1: which is what I'm referencing unemployment rates to vacancy ratio.

521
00:28:39,640 --> 00:28:41,840
Speaker 1: It could shift back to where it was in prior recoveries,

522
00:28:41,840 --> 00:28:44,000
Speaker 1: and then we might be in a different situation. Um.

523
00:28:44,040 --> 00:28:46,360
Speaker 1: I think this debate is really healthy. I think it's important.

524
00:28:46,840 --> 00:28:49,120
Speaker 1: I don't pretend to have an opinion on it. I'm

525
00:28:49,160 --> 00:28:52,400
Speaker 1: mostly focused on outcomes for workers here. But it does

526
00:28:52,440 --> 00:28:56,240
Speaker 1: seem like, you know, it's really worthwhile to try to

527
00:28:56,280 --> 00:28:59,040
Speaker 1: do all we can to make sure we get cost

528
00:28:59,080 --> 00:29:01,800
Speaker 1: down and try to get on a sustainable path in

529
00:29:01,880 --> 00:29:04,200
Speaker 1: terms of the labor market and the economy overall. It

530
00:29:04,200 --> 00:29:07,040
Speaker 1: doesn't seem like a full serrand. Yeah. I just remembered

531
00:29:07,040 --> 00:29:09,520
Speaker 1: we've actually done a whole episode on shifts in the

532
00:29:09,560 --> 00:29:12,360
Speaker 1: beverage curve, haven't we. Oh yeah, yeah, although that was

533
00:29:12,440 --> 00:29:15,760
Speaker 1: last year. But okay, So on this note though, and

534
00:29:15,840 --> 00:29:18,960
Speaker 1: you know, I take the point that you're not involved

535
00:29:19,000 --> 00:29:21,080
Speaker 1: in this debate specifically but I'm wondering if you could

536
00:29:21,080 --> 00:29:26,400
Speaker 1: talk generally about the impact of online job searches on

537
00:29:26,800 --> 00:29:30,160
Speaker 1: labor market data and statistics, because this is also one

538
00:29:30,160 --> 00:29:32,840
Speaker 1: of the pet theories for why that beverage curve relationship

539
00:29:32,920 --> 00:29:35,800
Speaker 1: might be changing, which is that it's much easier for

540
00:29:35,840 --> 00:29:39,160
Speaker 1: companies to just post a bunch of job openings somewhere

541
00:29:39,200 --> 00:29:42,600
Speaker 1: online and you know, maybe hope and wait that they'll

542
00:29:42,640 --> 00:29:45,360
Speaker 1: get a really good candidate, but they don't have to

543
00:29:45,400 --> 00:29:50,479
Speaker 1: accept anyone. So there's this discussion point that maybe online

544
00:29:50,560 --> 00:29:54,360
Speaker 1: job searches are kind of skewing that data. I think

545
00:29:54,360 --> 00:29:58,400
Speaker 1: that that's a very valid theory. If the cost of

546
00:29:58,520 --> 00:30:01,960
Speaker 1: job postings is go going down, especially due to technology

547
00:30:02,000 --> 00:30:05,280
Speaker 1: like the ability to post online, then you would expect

548
00:30:05,280 --> 00:30:07,840
Speaker 1: employers to, you know, to go fishing a little bit more,

549
00:30:07,880 --> 00:30:10,320
Speaker 1: and even if they're not always interested in catching a fish,

550
00:30:10,360 --> 00:30:13,520
Speaker 1: and so you might see you know, slightly elevated job

551
00:30:13,560 --> 00:30:17,160
Speaker 1: opening I think as the Bureau of Labor statistic defines that,

552
00:30:17,320 --> 00:30:19,360
Speaker 1: you know, they are running a survey by which they're

553
00:30:19,560 --> 00:30:21,960
Speaker 1: during which they're actively asking employers, you know, is this

554
00:30:22,000 --> 00:30:24,720
Speaker 1: an opening that you were actively hiring for now, there's

555
00:30:24,720 --> 00:30:27,400
Speaker 1: probably a lot of room for interpretation there, but you know,

556
00:30:27,720 --> 00:30:30,560
Speaker 1: by the Department of Labor Standards, you know, we're doing

557
00:30:30,560 --> 00:30:33,680
Speaker 1: our best to try to measure job openings for which

558
00:30:33,720 --> 00:30:37,040
Speaker 1: employers are trying to fill a job versus you know,

559
00:30:37,120 --> 00:30:41,200
Speaker 1: this kind of more passive approach to looking for for

560
00:30:41,240 --> 00:30:45,360
Speaker 1: workers that might happen if job openings are less costly.

561
00:30:45,960 --> 00:30:48,560
Speaker 1: I think something else that's really interesting about you know,

562
00:30:48,640 --> 00:30:51,600
Speaker 1: the job openings data is that it may also and

563
00:30:51,640 --> 00:30:53,920
Speaker 1: I think this is bearing out with data, it also

564
00:30:54,000 --> 00:30:57,680
Speaker 1: might just reflect some shift in preferences to So some

565
00:30:57,760 --> 00:31:01,960
Speaker 1: of the highest job opening levels by sector are the

566
00:31:02,000 --> 00:31:06,600
Speaker 1: service sector job openings, so you know, retail, trade, healthcare,

567
00:31:06,840 --> 00:31:11,040
Speaker 1: food services, and accommodations. Especially food services and accommodations was

568
00:31:11,120 --> 00:31:15,440
Speaker 1: kind of skyrocketed right when the recovery began, in part

569
00:31:15,480 --> 00:31:18,440
Speaker 1: probably because there's a high exposure risk to COVID if

570
00:31:18,440 --> 00:31:21,160
Speaker 1: you work those jobs um and lower wages. Those those

571
00:31:21,200 --> 00:31:23,640
Speaker 1: wages are rising really fast, and so you know, some

572
00:31:23,760 --> 00:31:26,040
Speaker 1: of the opening data, again I'd like to emphasize the

573
00:31:26,040 --> 00:31:28,240
Speaker 1: sick told differences because they tell you an additional story

574
00:31:28,800 --> 00:31:31,200
Speaker 1: may also be influenced by where workers are trying to

575
00:31:31,240 --> 00:31:34,840
Speaker 1: actually search for work and filled jobs, especially those lower

576
00:31:34,840 --> 00:31:38,400
Speaker 1: SCIPE workers who may have slightly better opportunity in this

577
00:31:38,440 --> 00:31:58,239
Speaker 1: tightly moment. What's the Inflation Reduction Act going to mean

578
00:31:58,320 --> 00:32:03,320
Speaker 1: for workers? Um, a number of things. I'm like, oh,

579
00:32:03,360 --> 00:32:07,400
Speaker 1: I'd love to talk about that. So, you know, we

580
00:32:07,400 --> 00:32:11,840
Speaker 1: were talking earlier about the real wage growth, and I

581
00:32:11,840 --> 00:32:15,200
Speaker 1: think that the Inflation Reduction Act is really important because

582
00:32:15,960 --> 00:32:18,520
Speaker 1: you know, we're seeing the impact of inflation on real wages,

583
00:32:18,520 --> 00:32:21,520
Speaker 1: and it highlights the broader importance of lowering the cost

584
00:32:21,600 --> 00:32:25,239
Speaker 1: of living overall. Inflation Reduction Act is doing that by

585
00:32:25,320 --> 00:32:27,680
Speaker 1: tackling some of the real cost of living challenges that

586
00:32:27,680 --> 00:32:30,720
Speaker 1: Americans feel now, of course especially at the pump part

587
00:32:30,720 --> 00:32:33,760
Speaker 1: of the grocery store, but they're also long standing challenges,

588
00:32:33,800 --> 00:32:36,600
Speaker 1: so bringing down energy costs, healthcare costs, you know, the

589
00:32:36,640 --> 00:32:40,360
Speaker 1: high costs for prescription drugs, because you know, those are

590
00:32:40,400 --> 00:32:43,040
Speaker 1: all things that workers have to pay for with the

591
00:32:43,080 --> 00:32:45,840
Speaker 1: wages that they are earning. And so when I think

592
00:32:45,840 --> 00:32:48,080
Speaker 1: about the Inflation Reduction Act and I think about, you know,

593
00:32:48,120 --> 00:32:50,840
Speaker 1: improving the cost of living, I think about workers who

594
00:32:50,880 --> 00:32:53,400
Speaker 1: are going to have paychecks that that stretch a little

595
00:32:53,440 --> 00:32:57,120
Speaker 1: farther than they did before. Actually just you know, sort

596
00:32:57,120 --> 00:32:58,719
Speaker 1: of in general, and I know, you know, we were

597
00:32:58,720 --> 00:33:01,280
Speaker 1: talking about the FED. But in your work and in

598
00:33:01,320 --> 00:33:03,600
Speaker 1: your day to day and at the Department of Labor,

599
00:33:04,120 --> 00:33:08,400
Speaker 1: how much are you thinking about essentially, And again, you know,

600
00:33:09,000 --> 00:33:12,880
Speaker 1: the White House just signed something called the Inflation Reduction Act,

601
00:33:13,160 --> 00:33:15,880
Speaker 1: But how much are you thinking generally about this idea

602
00:33:15,880 --> 00:33:20,960
Speaker 1: of of non monetary efforts to reduce inflation, both through

603
00:33:21,040 --> 00:33:24,520
Speaker 1: the law but other through other regulations, finding ways to

604
00:33:24,800 --> 00:33:28,880
Speaker 1: relieve pressures, finding ways to expand the supply side, finding

605
00:33:28,920 --> 00:33:32,840
Speaker 1: ways to bring about productivity so that we have other

606
00:33:32,960 --> 00:33:36,240
Speaker 1: ways of fighting inflation other than just the raid hike

607
00:33:36,320 --> 00:33:39,600
Speaker 1: layoff channel. Well, I frankly think about it as things

608
00:33:39,600 --> 00:33:43,520
Speaker 1: that we should be doing no matter what. To be

609
00:33:43,600 --> 00:33:47,080
Speaker 1: completely honest, you know, we were talking about the labor

610
00:33:47,080 --> 00:33:50,440
Speaker 1: force participation rate, and you know, increasing labor supply is

611
00:33:50,480 --> 00:33:53,800
Speaker 1: important to along one growth of the U. S economy,

612
00:33:54,040 --> 00:33:58,520
Speaker 1: creating new high quality jobs here at home, including in manufacturing,

613
00:33:58,520 --> 00:34:01,280
Speaker 1: which the Inflation Reduction Act would do, clean energy manufacturing

614
00:34:01,280 --> 00:34:04,200
Speaker 1: in particular. It is important for the growth of the economy.

615
00:34:04,240 --> 00:34:06,760
Speaker 1: I mean, it also is important for bringing down the

616
00:34:06,840 --> 00:34:10,440
Speaker 1: cost of energy. It's also important for growing the economy

617
00:34:10,480 --> 00:34:13,799
Speaker 1: because you know, if we have a bigger pie, and

618
00:34:13,840 --> 00:34:16,399
Speaker 1: we you know, to grow that pie in a way

619
00:34:16,440 --> 00:34:18,239
Speaker 1: that is shared, so workers have more powers, so they

620
00:34:18,280 --> 00:34:20,239
Speaker 1: get a bigger piece of that pie. You know, that

621
00:34:20,320 --> 00:34:23,880
Speaker 1: has the bonus of both, you know, growing use economy,

622
00:34:23,920 --> 00:34:27,560
Speaker 1: increasing productivity. Everyone benefits from higher living standards um and

623
00:34:27,600 --> 00:34:30,080
Speaker 1: you know, American workers have again, like I was saying before,

624
00:34:30,120 --> 00:34:32,480
Speaker 1: paychecks that stretch a little bit farther, or they get

625
00:34:32,480 --> 00:34:33,920
Speaker 1: a chance to get a job in a sector that

626
00:34:33,880 --> 00:34:36,680
Speaker 1: they could not work in before. I'm taking home a

627
00:34:36,680 --> 00:34:39,680
Speaker 1: bigger paycheck that comes with you know, strong worker protections

628
00:34:39,760 --> 00:34:42,480
Speaker 1: and maybe retirement benefits, healthcare, all the things that a

629
00:34:42,480 --> 00:34:45,360
Speaker 1: lot of workers need. I have a basic question, or

630
00:34:45,360 --> 00:34:48,400
Speaker 1: maybe it's a weird question, but what's the impact of

631
00:34:48,760 --> 00:34:53,200
Speaker 1: inflation on labor force participation? Because I could see I

632
00:34:53,239 --> 00:34:57,160
Speaker 1: could kind of see a way to argue it both ways,

633
00:34:57,239 --> 00:34:59,520
Speaker 1: which is, you know, on the one hand, if the

634
00:34:59,520 --> 00:35:01,239
Speaker 1: cost of live thing is going up and you can

635
00:35:01,280 --> 00:35:04,720
Speaker 1: no longer afford, for instance, food or to pay your rent,

636
00:35:05,040 --> 00:35:07,480
Speaker 1: then that would force you back into the labor market.

637
00:35:07,640 --> 00:35:09,919
Speaker 1: But on the other hand, you know, you could also

638
00:35:09,960 --> 00:35:13,320
Speaker 1: imagine a subset of workers who think, well, if prices

639
00:35:13,360 --> 00:35:16,080
Speaker 1: are going up, and everything is unaffordable, then what's the

640
00:35:16,120 --> 00:35:19,160
Speaker 1: point of taking on, for instance, a part time job

641
00:35:19,280 --> 00:35:20,920
Speaker 1: or something that's not really going to be able to

642
00:35:20,960 --> 00:35:25,440
Speaker 1: help me offset those So how are you viewing that relationship?

643
00:35:26,360 --> 00:35:30,520
Speaker 1: I think it's a really interesting question. My first thought

644
00:35:30,560 --> 00:35:35,960
Speaker 1: was to look to frankly, consumer expectations for inflation. We

645
00:35:36,000 --> 00:35:38,760
Speaker 1: just saw that there was a fairly big drop between

646
00:35:38,840 --> 00:35:41,640
Speaker 1: June and July and in the short and long run expectations.

647
00:35:41,680 --> 00:35:43,560
Speaker 1: Because I imagine that that might give you a sign

648
00:35:43,600 --> 00:35:45,480
Speaker 1: as to whether or not that's playing a big role

649
00:35:45,480 --> 00:35:47,400
Speaker 1: in your decision making. But again this is off the

650
00:35:47,400 --> 00:35:50,759
Speaker 1: cuff hypothesis, so so that that's one thing. But at

651
00:35:50,800 --> 00:35:54,160
Speaker 1: the same time, if you have an urgent need to

652
00:35:55,320 --> 00:35:59,120
Speaker 1: feed your family, you know, pay your bills. I imagine,

653
00:35:59,120 --> 00:36:02,840
Speaker 1: even if your paycheck wasn't stretching as far, the choices

654
00:36:03,080 --> 00:36:06,640
Speaker 1: probably to try to earn a wage there. Of course,

655
00:36:06,719 --> 00:36:09,399
Speaker 1: you know other reasons which lay before participation might be

656
00:36:09,960 --> 00:36:12,520
Speaker 1: lower for some workers, like I mentioned earlier, you know

657
00:36:12,880 --> 00:36:17,400
Speaker 1: care uh, you know, lack of access opportunities or discrimination.

658
00:36:18,000 --> 00:36:20,640
Speaker 1: You know, the opiates places prices has even played a

659
00:36:20,640 --> 00:36:24,279
Speaker 1: big role in in the declining rate of participation for

660
00:36:24,280 --> 00:36:26,880
Speaker 1: for white men like there are other bigger structural factors

661
00:36:26,920 --> 00:36:31,120
Speaker 1: that play a role, but that individual decision feels it

662
00:36:31,160 --> 00:36:33,120
Speaker 1: feels it feels like it leans more on the side

663
00:36:33,160 --> 00:36:35,560
Speaker 1: of if there's a job on the table, I might

664
00:36:35,560 --> 00:36:38,280
Speaker 1: take it. Then then that can you talk a little

665
00:36:38,280 --> 00:36:41,920
Speaker 1: bit more about immigration? And we know that over the

666
00:36:42,000 --> 00:36:45,520
Speaker 1: last few years, starting with the last administration, there has

667
00:36:45,560 --> 00:36:49,040
Speaker 1: been this very big drop overall in immigration. How do

668
00:36:49,080 --> 00:36:51,680
Speaker 1: you see that. Is this something that's going to affect

669
00:36:51,680 --> 00:36:53,520
Speaker 1: the economy in the long run or when you look

670
00:36:53,560 --> 00:36:58,279
Speaker 1: at data right now, whether it's productivity data, wage data,

671
00:36:58,280 --> 00:37:00,719
Speaker 1: are there areas in which this is clear showing up

672
00:37:00,840 --> 00:37:03,680
Speaker 1: right now the effects of that. I think the effects

673
00:37:03,719 --> 00:37:07,279
Speaker 1: of immigration are definitely showing up in the labor market

674
00:37:07,360 --> 00:37:10,600
Speaker 1: data today. Um, there are individuals who have measured this.

675
00:37:11,200 --> 00:37:12,879
Speaker 1: I wish I could remember the papers off the top

676
00:37:12,960 --> 00:37:15,560
Speaker 1: but of my of my head. But you know, the

677
00:37:15,600 --> 00:37:19,800
Speaker 1: gaps can be fairly significant, you know, hundreds of thousands.

678
00:37:20,160 --> 00:37:21,719
Speaker 1: I think even there was an estimate that was showing

679
00:37:21,960 --> 00:37:24,080
Speaker 1: last year that there were two million missing immigrants in

680
00:37:24,080 --> 00:37:26,640
Speaker 1: the US economy. Obviously, not all of those immigrants would

681
00:37:26,640 --> 00:37:29,560
Speaker 1: be participating in the labor more labor market, but a

682
00:37:29,640 --> 00:37:32,880
Speaker 1: sizable share would and so you know, that does affect

683
00:37:32,880 --> 00:37:36,200
Speaker 1: overall supply of labor. Like we're actually also seeing that

684
00:37:36,239 --> 00:37:38,719
Speaker 1: even for you workers who are born outside of the

685
00:37:38,760 --> 00:37:41,319
Speaker 1: U S who are working in the US today, you know,

686
00:37:41,600 --> 00:37:45,920
Speaker 1: they are also taking advantage of you know, this bargaining

687
00:37:45,960 --> 00:37:49,680
Speaker 1: power and are switching to sectors that may seem maybe

688
00:37:49,760 --> 00:37:52,840
Speaker 1: higher quality, which I thought was interesting because often the

689
00:37:52,920 --> 00:37:55,120
Speaker 1: thought is, will just bring in a bunch of immigrants,

690
00:37:55,160 --> 00:37:57,760
Speaker 1: they'll slut the labor market and take all these terrible jobs.

691
00:37:58,719 --> 00:38:01,440
Speaker 1: But we're born, were present in the US also have choice,

692
00:38:01,480 --> 00:38:04,040
Speaker 1: and so we're saying when there is opportunities for workers

693
00:38:04,080 --> 00:38:06,200
Speaker 1: to have choice, they also, you know, we'll choose better

694
00:38:06,239 --> 00:38:09,239
Speaker 1: quality jobs. So I think that that's that's important on

695
00:38:09,320 --> 00:38:12,160
Speaker 1: the you know, solutions front. I think obviously the policies

696
00:38:12,160 --> 00:38:14,520
Speaker 1: of the last administration played a big role, and frintly,

697
00:38:14,560 --> 00:38:19,399
Speaker 1: the pandemic hamperedly the federal government's ability to process you know,

698
00:38:19,280 --> 00:38:21,480
Speaker 1: you know, legal immigrants into the US, and so at

699
00:38:21,560 --> 00:38:23,200
Speaker 1: least where I set from what I've seen, the administration

700
00:38:23,239 --> 00:38:25,560
Speaker 1: is doing all it can to kind of fix you

701
00:38:25,600 --> 00:38:28,160
Speaker 1: know a lot of those challenges, including just the undermining

702
00:38:28,200 --> 00:38:31,560
Speaker 1: of our ability to actually make the immigration system work

703
00:38:31,640 --> 00:38:33,920
Speaker 1: for people who are doing their best to navigate it.

704
00:38:34,680 --> 00:38:38,000
Speaker 1: So I just have one last question here, and it

705
00:38:38,080 --> 00:38:41,279
Speaker 1: just goes back to the last nonfarm pay payrolls report.

706
00:38:41,360 --> 00:38:44,000
Speaker 1: We got five hundred and twenty eight thousand new jobs.

707
00:38:44,360 --> 00:38:47,600
Speaker 1: That was well ahead of expectations. And not only that,

708
00:38:47,760 --> 00:38:50,879
Speaker 1: adding a half a million people to the workforce does

709
00:38:51,000 --> 00:38:54,640
Speaker 1: not exactly feel like something that should or is supposed

710
00:38:54,680 --> 00:38:57,200
Speaker 1: to happen in the labor market as tight as this one,

711
00:38:57,280 --> 00:39:00,560
Speaker 1: Like if really employers are like really scrape bing and

712
00:39:00,640 --> 00:39:02,680
Speaker 1: like there's you know, everyone who wants a job in

713
00:39:02,880 --> 00:39:06,360
Speaker 1: theory can find one, and employers to say, oh, we

714
00:39:06,400 --> 00:39:08,839
Speaker 1: can't find workers, Like it's hard to imagine. How how

715
00:39:08,840 --> 00:39:11,640
Speaker 1: do you add another half a million jobs in that environment?

716
00:39:11,800 --> 00:39:14,919
Speaker 1: What does that tell you? What does that change any

717
00:39:14,960 --> 00:39:17,360
Speaker 1: of your assumptions about the state of the labor market

718
00:39:17,400 --> 00:39:20,120
Speaker 1: that is recently is July, this is still an economy

719
00:39:20,160 --> 00:39:24,520
Speaker 1: that's just adding that many workers per month. My biggest

720
00:39:24,560 --> 00:39:27,120
Speaker 1: question is always what's the trend line going to be?

721
00:39:27,520 --> 00:39:29,839
Speaker 1: And excuse this very wonking answer, but I love three

722
00:39:29,840 --> 00:39:33,719
Speaker 1: month averages for this reason. Um So one I think

723
00:39:33,719 --> 00:39:35,400
Speaker 1: it's important to watch to see if this continues or

724
00:39:35,400 --> 00:39:39,000
Speaker 1: if this was a temporary uptick, because prior to July,

725
00:39:39,640 --> 00:39:41,600
Speaker 1: you know, we were seeing slightly lower figures that were

726
00:39:41,640 --> 00:39:44,600
Speaker 1: trending trending lower than they were before. So that's you know,

727
00:39:44,640 --> 00:39:46,920
Speaker 1: out the gate. First reaction is is this going to stick?

728
00:39:47,000 --> 00:39:48,719
Speaker 1: Is this the start of a new trend? That doesn't

729
00:39:48,719 --> 00:39:51,399
Speaker 1: seem likely to me, but we will see very very soon.

730
00:39:51,520 --> 00:39:53,160
Speaker 1: And then and then the second thing is, you know,

731
00:39:54,160 --> 00:39:56,160
Speaker 1: so a question you asked earlier, it's a sign that

732
00:39:56,200 --> 00:40:00,279
Speaker 1: Americans do want to work. It seems like, you know,

733
00:40:00,360 --> 00:40:03,920
Speaker 1: every time we have a recovery, you know, the employer

734
00:40:04,000 --> 00:40:06,960
Speaker 1: side story kind of dominates the headlines, which is the

735
00:40:07,000 --> 00:40:08,919
Speaker 1: idea that Americans don't want to work, but they want

736
00:40:09,800 --> 00:40:12,000
Speaker 1: good quality jobs in sectors where they're not at risk

737
00:40:12,040 --> 00:40:15,160
Speaker 1: of contracting a deadly virus. They want to make enough

738
00:40:15,200 --> 00:40:17,960
Speaker 1: money to pay the bills, especially in an environment where

739
00:40:18,400 --> 00:40:20,960
Speaker 1: you know, inslation can be eating away at what they're

740
00:40:21,040 --> 00:40:24,160
Speaker 1: what they're taking home, um and and that's that's kind

741
00:40:24,160 --> 00:40:26,680
Speaker 1: of what I what I see in that data in July.

742
00:40:27,480 --> 00:40:30,760
Speaker 1: Joel Gamble, thank you so much for coming out odd lots.

743
00:40:30,960 --> 00:40:33,200
Speaker 1: You know, the labor markets obviously such a big and

744
00:40:33,239 --> 00:40:36,440
Speaker 1: sprowling topic. But that was really helpful in terms of

745
00:40:36,600 --> 00:40:39,200
Speaker 1: sort of understanding where we're at right now. So appreciate

746
00:40:39,239 --> 00:40:41,640
Speaker 1: you coming up. So glad to have been here. Yeah,

747
00:40:41,760 --> 00:40:43,919
Speaker 1: that was fun. Thank you so much, Thanks so much. Sure,

748
00:40:44,360 --> 00:41:01,920
Speaker 1: thank you, true Basy. I found that to be very useful,

749
00:41:02,040 --> 00:41:04,360
Speaker 1: all kinds of interesting things. You know. One of the

750
00:41:04,440 --> 00:41:07,440
Speaker 1: things that we haven't talked about that much is this

751
00:41:07,520 --> 00:41:11,399
Speaker 1: productivity question, and I find that I think Joel will

752
00:41:11,400 --> 00:41:13,359
Speaker 1: talk about that. Maybe we talked a little bit about

753
00:41:13,400 --> 00:41:16,480
Speaker 1: that with Yon, but I'm not really sure. But uh,

754
00:41:16,800 --> 00:41:18,520
Speaker 1: I do feel like that's one of the big sort

755
00:41:18,520 --> 00:41:22,880
Speaker 1: of mysteries questions, key determinants like where we go from here.

756
00:41:23,719 --> 00:41:26,080
Speaker 1: And I also like the way she sort of distinguished

757
00:41:26,120 --> 00:41:30,160
Speaker 1: between productivity as the sort of statistical artifact, which is like, yeah,

758
00:41:30,200 --> 00:41:31,839
Speaker 1: you can look at GDP and you can look at

759
00:41:31,840 --> 00:41:34,120
Speaker 1: ours work and come up with some math that say

760
00:41:34,400 --> 00:41:37,960
Speaker 1: workers with this productive. But then also productivity is this

761
00:41:38,040 --> 00:41:41,000
Speaker 1: sort of true deep economic phenomenon of we're going to

762
00:41:41,160 --> 00:41:44,359
Speaker 1: have higher pay and a more robust economy. We need,

763
00:41:44,600 --> 00:41:47,600
Speaker 1: you know, we need productive workplaces. Well, I'm also getting

764
00:41:47,600 --> 00:41:51,800
Speaker 1: flashbacks to actually the old Jannatsis argument about productivity just

765
00:41:51,920 --> 00:41:55,239
Speaker 1: not being you know, measured accurately in a modern economy

766
00:41:55,320 --> 00:41:58,959
Speaker 1: where there's a lot more emphasis on software and things

767
00:41:59,000 --> 00:42:01,600
Speaker 1: like that. That whole versation was a really good reminder

768
00:42:01,640 --> 00:42:06,440
Speaker 1: that the labor force is not a monolith, as Joel mentioned,

769
00:42:06,440 --> 00:42:08,440
Speaker 1: and there are of course these different groups within it,

770
00:42:08,480 --> 00:42:11,040
Speaker 1: all of which may be reacting in different ways to

771
00:42:11,080 --> 00:42:13,120
Speaker 1: the past two years. And then of course she made

772
00:42:13,120 --> 00:42:15,839
Speaker 1: the point also, you know, in addition to demographics, it's

773
00:42:15,880 --> 00:42:19,239
Speaker 1: also about industry type. And I thought her point about

774
00:42:19,560 --> 00:42:22,840
Speaker 1: the proportion of black men in transportation and warehousing and

775
00:42:22,880 --> 00:42:26,040
Speaker 1: things like that, and the relationship with the overall business

776
00:42:26,040 --> 00:42:30,600
Speaker 1: cycle those kind of being the first hired, first fired,

777
00:42:31,239 --> 00:42:34,080
Speaker 1: that was really interesting to me and a good reminder. Yeah,

778
00:42:34,160 --> 00:42:36,880
Speaker 1: we'll have to see what happens, because again, look, it

779
00:42:37,000 --> 00:42:41,359
Speaker 1: is really encouraging that the spread between black and white

780
00:42:41,400 --> 00:42:46,280
Speaker 1: unemployment is much narrower and compressed much faster in this recovery.

781
00:42:46,320 --> 00:42:48,839
Speaker 1: On the other hand, you know, as she pointed out,

782
00:42:49,120 --> 00:42:52,240
Speaker 1: there's questions and as you just mentioned about last hired,

783
00:42:52,719 --> 00:42:55,239
Speaker 1: first fired, there's a quality of those jobs. Okay, we

784
00:42:55,280 --> 00:42:59,560
Speaker 1: saw this huge explosion in demand for warehouse labor, huge

785
00:42:59,640 --> 00:43:03,920
Speaker 1: explore in demand for transportation, labor, huge explosion in demand

786
00:43:04,040 --> 00:43:07,799
Speaker 1: for food service and lodging things like that, not high

787
00:43:07,840 --> 00:43:11,240
Speaker 1: volume jobs, that's not necessarily high paying jobs, not necessarily

788
00:43:11,239 --> 00:43:13,680
Speaker 1: the most stable jobs. So I'll have to see and

789
00:43:13,719 --> 00:43:16,480
Speaker 1: of course throw into the mix of FED that is

790
00:43:16,800 --> 00:43:19,760
Speaker 1: clearly trying to slow down the labor market, and whether

791
00:43:19,840 --> 00:43:23,080
Speaker 1: these gains will hold persistent, have positive carry over for

792
00:43:23,080 --> 00:43:26,080
Speaker 1: the future I think remains a question mark. Yeah. So, okay,

793
00:43:26,120 --> 00:43:29,239
Speaker 1: So we've come out of the Labor Market Mystery podcast

794
00:43:29,320 --> 00:43:32,800
Speaker 1: with more questions, or at least more things to watch,

795
00:43:33,080 --> 00:43:35,840
Speaker 1: more things to watch. So yeah, we we answered a

796
00:43:35,880 --> 00:43:38,600
Speaker 1: bunch of questions and now we have a went to question. Yeah, alright,

797
00:43:38,800 --> 00:43:40,680
Speaker 1: shall we leave it there? Let's leave it there. This

798
00:43:40,719 --> 00:43:43,440
Speaker 1: has been another episode of the All Thoughts podcast. I'm

799
00:43:43,480 --> 00:43:46,120
Speaker 1: Tracy Alloway. You can follow me on Twitter at Tracy

800
00:43:46,160 --> 00:43:49,040
Speaker 1: Alloway and I'm Joe Wisn'tal. You can follow me on

801
00:43:49,080 --> 00:43:52,640
Speaker 1: Twitter at the Stalwart. Follow our guest Joel Gamble, She's

802
00:43:52,719 --> 00:43:57,440
Speaker 1: at Joel Underscore Gamble. Follow our producer Carmen Rodriguez at

803
00:43:57,520 --> 00:44:00,680
Speaker 1: Carmen Armand and check out all of our podcasts at

804
00:44:00,680 --> 00:44:05,440
Speaker 1: Bloomberg under the handle at Podcasts so, Joe, we have

805
00:44:05,520 --> 00:44:07,880
Speaker 1: something pretty exciting coming up. That's right. We're going to

806
00:44:07,960 --> 00:44:11,120
Speaker 1: be doing a live episode of the podcast and listeners

807
00:44:11,120 --> 00:44:13,319
Speaker 1: are invited to join. Yep. We are going to be

808
00:44:13,360 --> 00:44:17,040
Speaker 1: playing host to Perry Maryland and Sultan Posar. The two

809
00:44:17,040 --> 00:44:19,600
Speaker 1: of them are going to be debating the future of

810
00:44:19,640 --> 00:44:23,040
Speaker 1: the dollar. It's on September six at three pm at

811
00:44:23,040 --> 00:44:25,520
Speaker 1: Bloomberg h Q and if you want to come, Tracy,

812
00:44:25,600 --> 00:44:28,399
Speaker 1: how can people sign up? It is totally free. All

813
00:44:28,480 --> 00:44:30,120
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814
00:44:30,200 --> 00:44:33,120
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815
00:44:33,200 --> 00:44:36,160
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