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Speaker 1: I was talking to one agriculture company about whether it

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Speaker 1: would help to get prisoners to collect the harvest, and

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Speaker 1: they said there are a number of problems, including that

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Speaker 1: they might not be very good at it. They might,

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Speaker 1: you know, you need particular set of skills, especially if

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Speaker 1: you're picking soft fruits, for example, and also sometimes the

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Speaker 1: prisoners run away, which is another problem. Hello, and welcome

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Speaker 1: to Stephanomics, the podcast that brings the global economy to you.

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Speaker 1: I'm Stephanie Flanders, and this week we're investigating why employers

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Speaker 1: on different sides of the Atlantic are considering extreme solutions

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Speaker 1: to their labor shortages. But an economy with millions of

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Speaker 1: jobs they can see can still somehow be one in

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Speaker 1: which unemployed people struggle to find work. It's all the

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Speaker 1: flip side, the human side of the supply chain snarl

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Speaker 1: ups we come across so often these days, the post

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Speaker 1: COVID economy with demands still gaining pace and inflation and

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Speaker 1: wages heading up, but at least four million fewer people

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Speaker 1: in work today in the US than before the pandemic.

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Speaker 1: Later on, I'll ask Jason Furman, previously President Obama's top

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Speaker 1: economic advisor, to help me solve the riddle of the

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Speaker 1: missing American worker. I'm also here why agricultural companies in

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Speaker 1: Russia are weighing the pros and cons of using prisoners

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Speaker 1: to bring in the crops. But first we asked US

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Speaker 1: economy reporter Jill Sharp to give us a taste of

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Speaker 1: the US jobs market at ground level. Well, I think

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Speaker 1: that right now everybody is hiring, but they're only hiring

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Speaker 1: for lopaying job. They're hiring for positions as only one

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Speaker 1: day a week, two days a week, and people cannot

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Speaker 1: make it off of that. That's Precious Briggs, a thirty

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Speaker 1: two year old whose stream of working as a Las

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Speaker 1: Vegas cocktail server came to a sudden halt last April

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Speaker 1: after COVID nineteen shut down America's gambling paradise. After restrictions lifted,

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Speaker 1: she expected her former employer to hire her back, but

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Speaker 1: the call never came. Today, Precious is among over four

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Speaker 1: million Americans who are unemployed were missing from the labor

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Speaker 1: market compared to pre pandemic levels. Like many others, she's

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Speaker 1: used up her unemployment and pandemic benefits from the government,

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Speaker 1: and she's getting by on rental assistance, Medicaid, and support

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Speaker 1: from her family. She's hopeful that she'll land a full

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Speaker 1: time job as Vegas continues to reopen. I definitely want

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Speaker 1: to be in the casino. I love the people and

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Speaker 1: I love the atmosphere there, So that's definitely something that

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Speaker 1: I love, and that's that. It was a dream of

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Speaker 1: mine to leave Little Louisiana, my little town, and come

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Speaker 1: here in Tacktail emborsing here. When the pandemic arrived in

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Speaker 1: the US last year, millions of American workers abruptly lost

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Speaker 1: their jobs. Now, as the economy recovers, a puzzle has

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Speaker 1: emerged in the labor market. The country at over ten

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Speaker 1: million job openings at the end of August, according to

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Speaker 1: federal government data, and that number might have increased over

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Speaker 1: the last two months. The job posting website indeed estimates

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Speaker 1: there may now be as many as eleven million unfilled openings.

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Speaker 1: But while hiring is picked up just recently with over

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Speaker 1: five hundred thousand jobs added in October, millions remain unemployed

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Speaker 1: or have left the labor market since the pandemics started.

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Speaker 1: Economists and policymakers are all wondering where they've gone. Here's

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Speaker 1: Julia Pollock, chief economist at the online Jobs marketplace zip recruiter,

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Speaker 1: the labor markets, the matching market where you have to

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Speaker 1: choose something and be chosen by it, and where all

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Speaker 1: the jobs are very very differential, the works are very

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Speaker 1: very different and so having you know the same number

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Speaker 1: of job openings and of unemployed or underemployed workers does

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Speaker 1: not imply that there will be a very simple direct match.

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Speaker 1: For example, while job postings and warehousing and transportation and

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Speaker 1: e commerce related companies have exploded, there's been a decline

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Speaker 1: in brick and mortar retail postings during the pandemic. Workers

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Speaker 1: can't swap out their old job for new one quickly.

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Speaker 1: It takes time for people to build up the networks

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Speaker 1: down the skills that allow them to move from one

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Speaker 1: intitut chunnel. In interviews, out of work Americans described myriad

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Speaker 1: challenges preventing them from seeking or winning full time jobs

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Speaker 1: like precious. Some say employers are offering fewer hours and

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Speaker 1: lower wages. Others are caring for children or elderly family members,

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Speaker 1: limiting their ability to work. Many are scared of contracting

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Speaker 1: the coronavirus, and some have rethought their careers and opted

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Speaker 1: out of traditional employment. Altogether, they're getting by through patchwork

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Speaker 1: of help, state jobless benefits, federal and local safety net programs,

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Speaker 1: help from family and friends. A lucky few, like Josh

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Speaker 1: Organ of Omaha, Nebraska, of ditch their workaday lives for

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Speaker 1: riches in cryptocurrency. So it was really hard sitting in

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Speaker 1: my office making a few dollars a day or whatever

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Speaker 1: it was, and then you know, taking a trade on break,

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Speaker 1: on my lunch break and making you know, my whole

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Speaker 1: day's age in five minutes. During the pandemic, the thirty

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Speaker 1: one year old who used to trade crypto on the side,

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Speaker 1: began to feel increasingly frustrated with his day job. He's

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Speaker 1: trained as a pediatric nurse and was managing a hospital

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Speaker 1: dialysis unit. Last summer, he hired a financial advisor after

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Speaker 1: his wife insisted quit his job and jumped full time

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Speaker 1: into the fast paced world of crypto. I do remember

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Speaker 1: quitting my job and then the next week I made

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Speaker 1: like eighty thou dollars on a trade, like in just

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Speaker 1: in the first week, And I was like, okay, cool,

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Speaker 1: I just made my whole yearly salary at my job

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Speaker 1: in a week after quitting crypto. And that was right

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Speaker 1: back when the market really started to boom right. Since then,

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Speaker 1: he's made more than seven figures and the family has

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Speaker 1: been able to purchase a vacation home. He loves the

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Speaker 1: flexibility of choosing his own hours and being able to

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Speaker 1: care for his newborn. He also has more time for

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Speaker 1: exercise and meditation, which he says he ignored for the

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Speaker 1: better part of the last decade. Now I'm like starting

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Speaker 1: to take care of myself a little bit more too,

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Speaker 1: and like trying to be more healthy, um so that

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Speaker 1: way I can obviously live longer, just for my family

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Speaker 1: and my son. To be sure, many aren't so fortunate,

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Speaker 1: and a survey of job seekers that zip Recruiter did

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Speaker 1: in September, many people said they're relying on friends and

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Speaker 1: family to make ends meet, and more people than ever

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Speaker 1: also want a remote job, but those jobs remain concentrated

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Speaker 1: in specific industries, so that's another source of the mismatch.

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Speaker 1: Wh people are are holding out for remote work opportunities

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Speaker 1: which have exploded in business and financial services and insurance

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Speaker 1: and tech, but which are non existing in in other

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Speaker 1: industries um like. But now people actually have a realistic

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Speaker 1: prospect possibly finding a remote job. Those people are are

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Speaker 1: waiting out for those jobs in part because the labor

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Speaker 1: market is tight. People are also more empowered to be

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Speaker 1: picky about respondents in a recent ZIP recruiter survey, so

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Speaker 1: they don't feel the financial pressure to accept the first

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Speaker 1: job offer they receive. And one final reason Americans are

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Speaker 1: staying home their kids. Parents have pointed to the erratic

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Speaker 1: nature of school closings and the high cost of childcare

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Speaker 1: for their reluctance to re enter the workforce. Zack McGrath

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Speaker 1: is a single father of an eleven year old son

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Speaker 1: with special needs. He used to work in TV and

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Speaker 1: film production before the pandemic and is now looking outside

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Speaker 1: the industry because the hours don't give him the flexibility

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Speaker 1: to look after a son. If classrooms shut down because

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Speaker 1: of COVID cases, the school closing, you know, and even

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Speaker 1: just the random four day quarantines are like the sword

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Speaker 1: of Damocles. And even if I find this ideal situation,

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Speaker 1: you know that it's clearly not out there. That's something

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Speaker 1: that no employer is gonna want to deal with. You know,

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Speaker 1: just for three days, I can't come in, I can't

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Speaker 1: do anything. It's not gonna happen. So in a minute,

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Speaker 1: I'm going to talk to the former head of President

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Speaker 1: Obama's Council of Economic Advisors, about what's happening to the

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Speaker 1: US labor market and just how this great mismatch between

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Speaker 1: jobs and workers is going to get resolved, if it

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Speaker 1: gets resolved. But first I want to head over the

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Speaker 1: Atlantic to tell you about another country also looking for workers, Russia.

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Speaker 1: Bloomberg Economy reporter on your Quinn in Moscow is here

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Speaker 1: to explain on your thanks for joining Stephanomics. Russia is

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Speaker 1: facing a similar problem filling jobs across the economy. But

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Speaker 1: I guess in this case it's no mystery where the

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Speaker 1: workers have gone, is it. Yeah, that's right, it's definitely so.

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Speaker 1: Russia has long had a problem with its aging population

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Speaker 1: because of low birth rates during the turmoil in the

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Speaker 1: nine nineties after the fall of the Soviet Union UM,

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Speaker 1: but now it's got more things that are adding to that.

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Speaker 1: So for a long time the UM it relied on

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Speaker 1: migrant workers coming from poorer countries that were part of

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Speaker 1: the Soviet Union like Uzbekistan, Tajikistan and Kyrgyzstan to fill

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Speaker 1: the gap that it couldn't fill with domestic workers. But

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Speaker 1: after the pandemic that got a lot more difficult because

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Speaker 1: traveling was more difficult and countries closed borders, and a

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Speaker 1: lot of those people have gone home. So before the

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Speaker 1: pandemic um it was estimated there about four point five

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Speaker 1: million migrant workers in Russia, which makes it one of

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Speaker 1: the top four destinations for migrant workers in the world.

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Speaker 1: But now we think it's about three million people um

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Speaker 1: and all that has been made worse by high death

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Speaker 1: rates from coronavirus as the government has been reluctant to

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Speaker 1: lockdown the economy and vaccine hesitancy has been a big problem.

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Speaker 1: How was it manifesting itself? This this shortage of labor?

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Speaker 1: Where where do you see that? I know you're often,

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Speaker 1: I'm sure talking to businesses across the economy. Yeah, so

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Speaker 1: like in some other countries. At first there were big

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Speaker 1: shortages in agriculture, but now that's spreading across the economy.

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Speaker 1: So retail companies are also struggling to get enough people.

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Speaker 1: Another factor is that coreer services are growing really fast,

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Speaker 1: and they would have been staffed a lot by migrant

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Speaker 1: workers in the past, but because those people aren't around

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Speaker 1: anymore than people are shifting to work as carriers and

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Speaker 1: leaving gaps in other parts of the economy. So UM.

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Speaker 1: For example, X five Group, which is one of Russia's

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Speaker 1: biggest retailers, said that high mortality rates are causing problems

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Speaker 1: for its labor supply. UM and russ Agar, which is

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Speaker 1: one of Russia's biggest agriculture companies, has been increasing wages

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Speaker 1: to try and to try and get enough people and

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Speaker 1: has had to try and automate some more of its

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Speaker 1: work as it struggled to find enough stuff. And obviously

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Speaker 1: one of the questions, you know, there's the there's been

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Speaker 1: a talk of labor shortages and lots of different countries

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Speaker 1: and UM. One of the question marks is about how

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Speaker 1: much is going to feed into wages and how much

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Speaker 1: that will then feed inflation and make this inflation that

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Speaker 1: we're seeing in a lot of countries not so as

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Speaker 1: not as temporary as as people were hoping. How is

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Speaker 1: that playing out in Russia? Wages go up, is that

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Speaker 1: pushing up inflation? Yeah? So, like I said, rus I

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Speaker 1: grow say they've raised wages UM up to ten percent.

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Speaker 1: In some sectors wags have been increasing more than that,

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Speaker 1: and that's definitely feeding into inflation and inflation here is

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Speaker 1: UM is a political problem for put into because um,

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Speaker 1: it really hits living standards. And at the moment, uh,

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Speaker 1: it's how high is it now? At the moment, it's

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Speaker 1: at the highest in five years. It's about eight percent,

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Speaker 1: which is a way above the Bank of Russia's target.

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Speaker 1: And so Bank of Russia has been aggressively hiking rates

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Speaker 1: to try and bring inflation down, but so far it

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Speaker 1: doesn't seem to be having much of an effect. So

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Speaker 1: this isn't just a problem for the economy. It also

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Speaker 1: has the potential to slow down growth in Russia and

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Speaker 1: even undermine Putin's popularity. Yeah, if you can't get so,

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Speaker 1: you've got some you've got inflation and wages going up.

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Speaker 1: But also the central bank kind of slamming on the brakes,

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Speaker 1: slowing economy exactly. And people remember when there was runaway

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Speaker 1: inflation in the nineties and how that hit living standards.

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Speaker 1: That means that it's much more of the front of

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Speaker 1: people's minds here and consistently and polls people say that

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Speaker 1: rising prices are the biggest problem. So one of the

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Speaker 1: reasons the story had caught my eye was that there

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Speaker 1: was some pretty aggressive tactics that the Russians. Russia being Russia,

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Speaker 1: there's been some pretty extreme solutions to this problem that

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Speaker 1: they've come up with over the years. And I guess

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Speaker 1: and maybe looking to now. Yeah, so earlier this year,

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Speaker 1: prisoners were brought in to work on railroad upgrades, UM,

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Speaker 1: for for like cold transportation. UM. And that's kind of

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Speaker 1: particularly scary here because it brings back echoes of labor

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Speaker 1: camps and Soviet times where prisoners had to work in

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Speaker 1: mining or forestry or well reconstruction. So for so far

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Speaker 1: that's on a pretty small scale, but people are consistently

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Speaker 1: talking about how to solve this with getting more prisoners

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Speaker 1: to work. UM. In agriculture, they were looking at getting

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Speaker 1: students to help with the harvest, and last year prisoners

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Speaker 1: also helped with the harvest. And in some regions, UM,

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Speaker 1: the government has also looked at bringing in the army

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Speaker 1: to work on some construction projects. We've gotta worry when

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Speaker 1: people start bringing the army to do anything. And I

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Speaker 1: can imagine, Yeah, that's sort of shades of some of

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Speaker 1: those sort of false labor camps and everything. Yeah, well

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Speaker 1: all of those as well. I think companies aren't necessarily

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Speaker 1: that keen on these ideas. Like I remember I was

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Speaker 1: talking to one agricultural company about whether it would help

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Speaker 1: to get prisoners to um collect the harvest, and they

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Speaker 1: said there were a number of problems, including that they

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Speaker 1: might not be very good at it. They might, you know,

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Speaker 1: you need particular set of skills, especially if you're picking

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Speaker 1: soft fruits, for example, and also sometimes prisoners run away,

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Speaker 1: which is another problem. Then I can see that. And

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Speaker 1: what about I mean the immigrants. Obviously it's part of

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Speaker 1: the issue is that they're not coming back from from

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Speaker 1: Central Asia in these places where they had previously come

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Speaker 1: from to work in Russia. Are there any efforts underway

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Speaker 1: to encourage them back. Yeah, so, um, they're looking at

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Speaker 1: potentially putting on charter trains that would bring migrant workers

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Speaker 1: from Tasha, Kent and Uzbekistan to Russia, which would take

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Speaker 1: several days on the train. And there's also recently an

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Speaker 1: amnesty which meant that migrants who had previously been expelled

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Speaker 1: for various reasons be allowed back in now. But at

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Speaker 1: the same time, there's a lot of stories and state

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Speaker 1: media about migrant workers and crime, which looks like it's

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Speaker 1: pushing the other way, even if the situation now is

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Speaker 1: pretty extreme. Well on you, as we said that things

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Speaker 1: are often extreme in Russia. But I appreciate you you

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Speaker 1: telling us about this, uh, this challenge that Russia is

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Speaker 1: facing on your Quinn great, Thanks very much, m H.

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Speaker 1: Now we're going to shift the focus back west to

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Speaker 1: the US and the labor market conundrum we heard about

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Speaker 1: at the start of the program, and I'm delighted to

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Speaker 1: have joining as Jason Furman, Professor of the Practice of

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Speaker 1: Economic Policy at Harvard University and the Kennedy School of

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Speaker 1: Government and a senior researcher at the Peterson Institute in Washington,

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Speaker 1: but previously chair of President Obama's Council of Economic Advice US. Jason,

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Speaker 1: thank you for joining Stephanomics once again. And the picture

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Speaker 1: we had at the start of the program was an economy,

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Speaker 1: a US economy in which there were job vacancies everywhere,

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Speaker 1: it seemed, but no work for the unemployed. How would

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Speaker 1: you characterize it? It's a labor market like none of

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Speaker 1: us have ever seen before. Where about you know, six

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Speaker 1: or seven million jobs short of where we should be,

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Speaker 1: but there's still millions and millions of job openings, and

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Speaker 1: so overall the problem looks more like labor supply than

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Speaker 1: the problem we're more used to normally, which is labor demand.

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Speaker 1: And of course some say this isn't when people talk

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Speaker 1: about job shortages, real worker shortages, that it's really it's

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Speaker 1: not a shortage of of workers, it's a shortage of

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Speaker 1: good jobs that if the wages will hire, people would

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Speaker 1: be doing these jobs. Yeah, I mean, you do have

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Speaker 1: to ask why two years ago people were doing these

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Speaker 1: jobs at a certain wage and now they don't want

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Speaker 1: to do those jobs at the same wage, only want

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Speaker 1: to do them at a higher wage. The way I

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Speaker 1: teach my introductory economics students, we would describe that as

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Speaker 1: a shift of the supply curve. To get the same

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Speaker 1: amount of labor as before. You can only get there

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Speaker 1: if you're doing it at a higher wage than it

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Speaker 1: was before. And how do you think that's going to

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Speaker 1: play Is he going to just play out in wages

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Speaker 1: reaching a higher level or are they going to be

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Speaker 1: you know, are there sort of deeper skill mismatches at

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Speaker 1: work where the people who are looking for jobs are

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Speaker 1: just not the same, just not the right people for

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Speaker 1: these many vacancies that are there. Right, So, first of all,

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Speaker 1: large dose of humility, as in order. No one predicted

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Speaker 1: that the labor markets were gonna look nearly this extreme

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Speaker 1: at this point in time. I certainly didn't, and so

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Speaker 1: I'm not going to tell you I know for sure

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Speaker 1: what it's going to look like. UM a year or

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Speaker 1: two from now. UM, if forced to my best guess,

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Speaker 1: I think there are enough temporary factors that explain where

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Speaker 1: we are now related to COVID, coming out of COVID

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Speaker 1: and in the United States, the policy response to COVID

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Speaker 1: that I think we'll get of the way back to

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Speaker 1: where we were. Um, it just may take a year

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Speaker 1: or two to get there, But you know, there's a

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Speaker 1: risk to that and a risk that this is a

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Speaker 1: more permanent change. And I guess one of the ways

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Speaker 1: that we get from here to there would be wages

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Speaker 1: going up and then inflation going up, potentially staying up.

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Speaker 1: You know, we had another round of pretty eye popping

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Speaker 1: US inflation numbers this week. Do you think that is

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Speaker 1: going to play a part that we will see more

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Speaker 1: during enduring inflation driven by wages another place where humility

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Speaker 1: is in order. UM, we haven't seen wage price spirals

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Speaker 1: for a very long time. If there's anything that could

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Speaker 1: bring a wage price spiral back, it is what we've

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Speaker 1: seen with extremely high inflation this past year, and um,

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Speaker 1: you know the way that's affecting workers and labor markets

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Speaker 1: and businesses. So I think that's a distinct upward risk

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Speaker 1: for inflation at this point in time. I guess we

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Speaker 1: should have a little pause just to sort of reflect

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Speaker 1: on on those latest inflation numbers, just to put them

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Speaker 1: in put it in perspective for us, just what happened

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Speaker 1: one month, let alone what's happened on the twelve month horizon. Yeah,

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Speaker 1: so in October the cp I went up zero point

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Speaker 1: nine percent. A bunch of that was gasoline more expensive,

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Speaker 1: that's something global. But you strip out the vaulatile components,

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Speaker 1: the core cp I was up zero point six um.

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Speaker 1: And that's a real blow to the transitory stories which

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Speaker 1: had been pointing out the slowing. Of course c p

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Speaker 1: I projecting more slowing, of course c p I. So

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Speaker 1: I think this report, broadly speaking, says, buckle your seat belts.

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Speaker 1: You know, this isn't slowing down dramatically anytime soon. And

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Speaker 1: as you suggest, I mean that's even after taking out

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Speaker 1: quite a few things. I mean, sometimes when people talk

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Speaker 1: about the core and taking out the volatile things, you know,

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Speaker 1: for some people that's taking out all the things they

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Speaker 1: actually want to buy on a given day. Oh yeah. Oh. Politically,

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Speaker 1: what matters actually is almost the opposite of core. It's

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Speaker 1: what's happening to food prices and gasoline prices. UM. Core

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Speaker 1: is a good construct analytically because it gives you a

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Speaker 1: better prediction of where inflation will be a year from now.

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Speaker 1: But to understand what people have experienced over the last year, Um,

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Speaker 1: they've experienced prices up six point two percent, and and

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Speaker 1: they hate that. And I know we're going to you're

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Speaker 1: gonna start talking about humility again. But when you have

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Speaker 1: you know, you're sitting in sitting at Harvard at least

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Speaker 1: some of the time, and you know, with your with

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Speaker 1: that more academic kind of long term perspective, I just

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Speaker 1: under what you were thinking now about the legacy of

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Speaker 1: COVID for the for the labor market. I mean, when

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Speaker 1: a lot of people lose their jobs, and it was

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Speaker 1: a really a lot of unprecedented number of people in

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Speaker 1: a short time last year, we tend to worry about

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Speaker 1: not just the immediate loss of output that they aren't

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Speaker 1: able to produce because they're not in work, but the

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Speaker 1: know how that they've built up in those jobs which

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Speaker 1: might be lost forever might affect their human capital and

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Speaker 1: the human capital of the country. UM. We had hoped

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Speaker 1: that that would not be such a factor this time,

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Speaker 1: because not least because it was a relatively brief crisis,

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Speaker 1: but also a lot of the most affected sectors were

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Speaker 1: places where there weren't a lot of specific skills to

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Speaker 1: be lost. UM, what do you what do you think

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Speaker 1: one year on about the sort of human capital cost

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Speaker 1: of that enormous spike in unemployment we had last year.

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Speaker 1: I think it's likely meaningful. There's been a lot of

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Speaker 1: long term unemployment. People really do lose skills, they lose

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Speaker 1: out on the training they were getting on the job,

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Speaker 1: they get dislocated in a certain way. All the evidence

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Speaker 1: we've had from the past is that can have long

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Speaker 1: term impacts on sustainable unemployment rates, on wages, and on

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Speaker 1: productivity in the economy. That's compounded by the fact that

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Speaker 1: we've had low business investment for the last year and

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Speaker 1: a half and some of the steps you'll need to

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Speaker 1: take to harden against COVID. It's possible that work from

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Speaker 1: home and you know, doing teleconferences rather than flying places

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Speaker 1: will make up for all of that, But I would

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Speaker 1: go with the evidence we have from the past, and

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Speaker 1: the evidence we have from the past says experience here

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Speaker 1: is quite negative. There's a bit of hope. Um, I

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Speaker 1: hope that hope triumphs over experience, but I wouldn't I

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Speaker 1: wouldn't count on it. But it's interesting. This was something

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Speaker 1: that that I had thought about for some papers that

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Speaker 1: we've put together for for the New Economy Forum that

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Speaker 1: Bloomberg's holding in Singapore next week. At this sense of

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Speaker 1: this idea of whether what the long term impact on

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Speaker 1: productivity and output might be of this crisis, and whether

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Speaker 1: it might be different from other recessions. As you say,

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Speaker 1: you know, the lesson usually is recessions always cause some

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Speaker 1: permanent damage, especially to human capital, but also the investment

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Speaker 1: base of the country. But you do have you know,

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Speaker 1: the International Monetary Fund and some other important forecasters now

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Speaker 1: suggesting some kind of COVID dividend for at least some

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Speaker 1: of the advanced economies, including the US that actually whether

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Speaker 1: it's the infrastructure investments by the US administration post COVID,

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Speaker 1: or some of the productivity changes that you talked about

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Speaker 1: working from home, faster digitalization all of US, or maybe

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Speaker 1: companies using automation more. But all of us using kind

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Speaker 1: of teller teller working and all the things more that

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Speaker 1: all of that was actually going to put the economy,

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Speaker 1: the economy at least in a better place than it

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Speaker 1: than we would have expected pre COVID. Do you does

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Speaker 1: that make any sense to you? Or do you think

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Speaker 1: that there's an we're underestimating some of the negatives that

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Speaker 1: you just mentioned. Yeah, I think that's certainly possible. Um,

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Speaker 1: we could have a COVID dividend coming out of this. Now.

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Speaker 1: I should point out the I, M F and other

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Speaker 1: forecasters we're expecting for the United States that we'd see

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Speaker 1: that dividend as soon as Q four of one. They

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Speaker 1: had a forecast for g d P post pandemic that

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Speaker 1: was higher than their pre pandemic forecast. Um, that's not

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Speaker 1: I'm going to materialize. So the schedule for this dividend materializing,

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Speaker 1: at least in the United States m keeps getting pushed out.

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Speaker 1: But I do broadly think that anyone saying that is

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Speaker 1: has a sort of hopeful narrative about the present that

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Speaker 1: we don't really have any evidence or data for this logic,

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Speaker 1: this theory. There's intuition, but there's no hard data, and

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Speaker 1: that that's going to overcome the very very strong data

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Speaker 1: we have about what's happened historically when we've had periods

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Speaker 1: of prolonged high unemployment and under investment. Clearly there has

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Speaker 1: been great concern that during the pandemic, but potentially also

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Speaker 1: in the legacy of the pandemic, inequalities that we already

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Speaker 1: had are going to have been entrenched and even accelerated

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Speaker 1: intensified in some cases, and you've almost highlighted them in

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Speaker 1: some of the things that you've You've said, you know

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Speaker 1: that the potential for people to lose human capital having

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Speaker 1: lost jobs, just as actually some of the more skilled

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Speaker 1: and well positioned members of the workforce are actually enjoying

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Speaker 1: more productivity, enjoying working from home, potentially even relocating to

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00:26:45,000 --> 00:26:48,920
Speaker 1: bigger houses outside the city and other things. So how

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00:26:48,920 --> 00:26:53,280
Speaker 1: do you see that sort of inequality impact of COVID. Yeah,

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00:26:53,359 --> 00:26:55,560
Speaker 1: the last two years have been a huge blow to

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00:26:55,760 --> 00:27:00,960
Speaker 1: market incomes for households towards the bottom of the economics spectrum,

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00:27:01,000 --> 00:27:05,200
Speaker 1: but a hugely progressive response that at least temporarily helped

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00:27:05,240 --> 00:27:08,320
Speaker 1: them much more than it helped anyone else. Um, of course,

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00:27:08,359 --> 00:27:11,880
Speaker 1: that response is mostly ending except for money for children,

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00:27:11,920 --> 00:27:14,600
Speaker 1: which looks like it will last at least another year.

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00:27:14,760 --> 00:27:19,679
Speaker 1: I hope longer than that. Um, you have seen faster

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00:27:19,760 --> 00:27:23,000
Speaker 1: wage growth for lower wage workers than higher wage workers.

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00:27:23,040 --> 00:27:26,159
Speaker 1: We saw that before the pandemic, We've seen that during

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00:27:26,200 --> 00:27:32,080
Speaker 1: the pandemic, So you know, all in I think it

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00:27:32,160 --> 00:27:36,959
Speaker 1: will be roughly neutral for income inequality and has raised

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00:27:37,000 --> 00:27:40,960
Speaker 1: wealth inequality because we've seen what's happened to equity markets

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00:27:41,200 --> 00:27:45,359
Speaker 1: and the like. And finally, I think we spoke at

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00:27:45,359 --> 00:27:48,959
Speaker 1: the beginning of the year when the history of the

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00:27:49,160 --> 00:27:52,560
Speaker 1: Biden administration was a book that had still all empty

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00:27:52,600 --> 00:27:57,040
Speaker 1: pages and there was we were thinking about how transformational

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00:27:57,240 --> 00:28:04,520
Speaker 1: their President Biden's economic policies might be and considering the

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00:28:04,560 --> 00:28:07,439
Speaker 1: economic yeah, the economic impact of this one year and

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00:28:07,480 --> 00:28:10,200
Speaker 1: the programs that were unveiled in the first few months

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00:28:10,240 --> 00:28:13,560
Speaker 1: of the administration, it's it's been a pretty hard slog

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00:28:14,640 --> 00:28:16,480
Speaker 1: I know, you won't want to knock the people who

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00:28:16,480 --> 00:28:18,119
Speaker 1: are doing some of the jobs that you've done in

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00:28:18,119 --> 00:28:20,199
Speaker 1: the past, but we know where are where do you

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00:28:20,200 --> 00:28:23,480
Speaker 1: think we are now? And how are we doing relative

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00:28:23,560 --> 00:28:26,679
Speaker 1: to that kind of transformative hope that some people might

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00:28:26,720 --> 00:28:29,240
Speaker 1: have had at the beginning of the year, given the

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00:28:29,359 --> 00:28:33,880
Speaker 1: political hand the White House has been dealt. They're running

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00:28:33,880 --> 00:28:37,600
Speaker 1: ahead of my expectations for what they'd be able to pass.

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00:28:37,720 --> 00:28:41,320
Speaker 1: They need to get unanimity for one part of their agenda,

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00:28:41,360 --> 00:28:43,120
Speaker 1: which is going to be really hard to do, but

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00:28:43,200 --> 00:28:45,080
Speaker 1: it looks like they're probably going to do it. And

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00:28:45,080 --> 00:28:48,640
Speaker 1: they actually got bipartisan support, especially in the Senate um

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00:28:48,720 --> 00:28:51,600
Speaker 1: for another part of their agenda. So they're getting more

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00:28:51,640 --> 00:28:56,040
Speaker 1: done than I expected. They're getting, you know, of what

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00:28:56,120 --> 00:28:58,800
Speaker 1: the President wanted done, and he wanted quite a lot,

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Speaker 1: and of a lot art is still a decent amount.

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00:29:02,480 --> 00:29:05,280
Speaker 1: But no, it's not going to change everything. Um. It's

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00:29:05,320 --> 00:29:08,080
Speaker 1: not going to set climate change. It's not going to

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00:29:08,200 --> 00:29:11,960
Speaker 1: make even preschool universal, so um. But it's it's I

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00:29:12,000 --> 00:29:14,080
Speaker 1: think it's a good start, um for in terms of

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00:29:14,160 --> 00:29:17,760
Speaker 1: medium and long run fiscal fillers. A good note to it.

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Speaker 1: Jason Firman, thank you very much. Thank you. That's it

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Speaker 1: for this episode of Stephanomics. Next week we'll be in

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00:29:34,640 --> 00:29:39,520
Speaker 1: Singapore with special episodes from the Bloomberg New Economy Forum, including,

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00:29:39,680 --> 00:29:43,360
Speaker 1: among other highlights, Larry Summers on inflation and the dangers

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00:29:43,440 --> 00:29:47,200
Speaker 1: of woke central banking, the future of cities, where the

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00:29:47,280 --> 00:29:50,680
Speaker 1: green finance really can save the world, So tune in

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00:29:50,680 --> 00:29:53,480
Speaker 1: for all that and follow at economics on Twitter for

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00:29:53,560 --> 00:29:56,520
Speaker 1: more news and analysis from Bloomberg Economics, from the New

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00:29:56,520 --> 00:30:00,160
Speaker 1: Economy Forum and around the world. This episode, it was

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00:30:00,200 --> 00:30:02,880
Speaker 1: produced by Mangus Hendrickson, and the story from the US

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00:30:03,000 --> 00:30:07,240
Speaker 1: was reported by Jill Shah and Katia Dmitrieva. Special thanks

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00:30:07,280 --> 00:30:11,320
Speaker 1: also to Anya Quinn and Jason Furman. Mike Sasso is

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00:30:11,360 --> 00:30:14,560
Speaker 1: executive producer of Stephanomics and the head of Bloomberg Podcast

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00:30:14,800 --> 00:30:15,680
Speaker 1: is Francesco Levi.