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U.S. adds just 266,000 jobs in April, far below expectations

82 points by throwkeep 5y ago

anewaccount2021 5y ago
Tough position for Biden. The poor would rather prolong rent forgiveness + stimulus. The rich love the negative employment numbers since it implies lower rates for longer, which means more gains in the market.
xnx 5y ago
Any claims about labor shortage, hiring difficulties, "no one wants to work", etc. should always be read with the automatic addendum "...at the price we want to pay".
NikolaeVarius 5y ago
I've pretty much stopped paying attention to these numbers. I read/listen to multiple sources of news, and the amount of vastly different interpretations of these numbers has me concluding that its pointless to give a damn.
- hnarn 5y ago
  Can you give an example of a single type of statistic where this argument can't be made? Are statistics overall categorically useless? Should they not be reported?
  - maxqin1 5y ago
    > Should they not be reported? They probably shouldn't... 1) Humans are on average bad with numbers. This could have unforseen negative impacts. 2) Your average person can't define causal inference, let alone make a well-informed one. 3) Few of the presenters (news people) have a grasp on 1 & 2. If they do, also communicating that becomes a challenge that requires solving 1 & 2.
  - fumeux_fume 5y ago
    This does not appear to be a very charitable interpretation of the above comment.
  - bartart 5y ago
    I think in this case it’s worth pointing out that monthly unemployment numbers are historically very uncertain and the subsequent revisions to the initial number are often pretty substantial. https://projects.fivethirtyeight.com/jobs-report-growth-unemployment/ https://projects.fivethirtyeight.com/jobs-report-growth-unem...
  - blululu 5y ago
    Statistics are certainly not categorically useless, but they are widely misunderstood and thus widely abused. In less political areas I have seen trained experts make elementary mistakes (mistakes happen and it's fine). A lot (nearly all in my informal sampling) of journalists have zero understanding of statistical methods. The term statistical significance leads to knee jerk reactions advocating policy without understanding the basic procedure, or implications of hypothesis testing. As a numerate person I would personally appreciate it if all statistical claim had a link to a Jupyter Notebook and the associated data. (Though perhaps Observable would be the best choice here since it is run on the web).
Sideyon 5y ago
Thank you Biden
lawnchair_larry 5y ago
And what did you think would happen if you blindly paid people to not look for work? The Biden administration does not seem to understand basic behavioral economics.
- colejohnson66 5y ago
  You do understand we’re in the middle of a major pandemic, right? It’s not paying people not to work; it’s paying people who were chosen (by the company, not the government) to not work. I was furloughed from a job in March last year. I wasn’t paid unemployment to leave, but instead, paid because I couldn’t work.
  - infamouscow 5y ago
    Vaccines are available to everyone that wants one. It's time to get back to work.
  - Rebelgecko 5y ago
    Are we still in the middle of the pandemic? At least where I live, anyone who wants a vaccine has been able to get one for a month, so pretty much anyone who wants to be should be fully vaccinated in the next few weeks. Also, IIRC the CARES Act suspended the requirement to look for more work if you've been furloughed/laid off. A friend of mine who works in a restaurant was getting paid more to go surf at the beach than he used to get paid to go to work. When his employer opened up, my friend was understandably not motivated to get scheduled for very many shifts.
    - soperj 5y ago
      >Are we still in the middle of the pandemic? At least where I live, anyone who wants a vaccine has been able to get one for a month, so pretty much anyone who wants to be should be fully vaccinated in the next few weeks. USA is still #3 in the world for cases per day.
      - Rebelgecko 5y ago
dtwest 5y ago
This is a very surprising number given the expectations. There are many companies hiring in the service sector that cannot find enough workers. As such, average hours worked is skyrocketing as well: https://fred.stlouisfed.org/series/AWHAELAH https://fred.stlouisfed.org/series/AWHAELAH It seems likely that unemployment benefits are contributing to this labor shortage.
- ineptech 5y ago
  I disagree, this seems like an expected outcome. The economy is turbulent; it has been disrupted and is in the process of adjusting. Some (relatively brief and localized) shortages are expected as the markets find a new equilibrium. Unemployment benefits are not causing the disruptive effects, they're (to some extent) protecting workers from the disruptive effects, which is exactly what they're supposed to do. They are not a handout, they pay for themselves historically; we should let them work.
- enraged_camel 5y ago
  The other likely factor is that many schools are either still closed or are doing remote learning, which means many parents are stuck with having to look after their kids when they would otherwise be working. edit: why the downvotes?
  - throwaway_kufu 5y ago
    Child care is a significant and major expense in the US, most of the people on HN that work for tech companies work for companies that more or less are openly hostile towards married employees with families, in fact anything less than a young single working willing to drink the company cool-aide often “isn’t a good culture fit”. But the average worker has additional costs that never get factored in just to work, transportation (for me that’s about $600/month), dry cleaning ($100), food (of course this can’t be negated entirely but is often more expensive while working outside the home). The downvotes are because the haves want the have nots to shut up and get back to work for them. It’s the equivalent of taking legitimate points raised by workers and responding with stop being a smart ass.
  - 5y ago
seoaeu 5y ago
That's some pretty strong spin... Unnamed forecasters thought the number of jobs added should be higher, so we're disappointed by a quarter million new jobs.
- syops 5y ago
  Typically the forecasters are not this wrong. Thus this is cause for investigation and possibly concern. We do want policy makers to be given forecasts on these sorts of things and we do want them to be alarmed when the forecasts are so far off.
  - Jiocus 5y ago
    Could less accurate forecasting be attributed to exceptional circumstances of the environment they have tried to analyze? I have the feeling there's quite a few “predictions” during this pandemic that are off. Where people or the economy have acted contrary to popular beliefs or rational modelling.
    - syops 5y ago
      I have no expertise in this area. I imagine that there is an increased amount of guessing due to uncertainty about our present circumstances.
- takeda 5y ago
  And it is for April, the general population started being vaccinated in middle of it and it also takes over a month (according to the companies) to get full effect of the vaccine.
- reedjosh 5y ago
  Well, the trend was up over the last three months. 233 536 770(P) 266(P) https://data.bls.gov/timeseries/CES0000000001?output_view=net_1mth https://data.bls.gov/timeseries/CES0000000001?output_view=ne... For vaccines coming online and people _starting_ to get back to normal, it doesn't seem like a stretch to expect a number higher than this.
- 5y ago
FpUser 5y ago
Meanwhile Canada lost just about as many during last month due to lockdowns.
speeder 5y ago
I am worried for the US economy. Dogecoin, a meme and joke, went from a quarter of a cent last year to 66 cents today. And the second most popular job in today payrolls were Casino workers, at an staggering 72k people. Something must be seriously wrong when people think it is wise to dump money on memes and casinos!
- nimos 5y ago
  I think the unaffordability of housing is a driver of this. At the rate prices increase saving a couple grand a year is basically pointless so might as well yolo on some crypto/gambling on the off chance of making it big. It's not entirely illogical either if you assume the marginal utility of money is discontinuous and there is a jumps around at certain thresholds such as being able to afford a reasonable home.
  - imtringued 5y ago
    I wonder how inflexible this demand is, what if it's a checkbox that almost every human wants to check? Maybe not for their entire life, but at least until the kids move out. It is entirely possible that cheap financing results in higher down payments which in the end actually fuels a savings craze that drags inflation down. I also suspect that over the long term a lot of products are going down in price and housing costs like rents are dragging the CPI up.
- intergalplan 5y ago
  Sure looks like capital chasing returns in the face of weak—or at least insufficient, for the amount of capital available—demand.
- RC_ITR 5y ago
  Or, and hear me out here, the reason casinos posted some of the highest gains in this report is because they are just now reopening.
- BitwiseFool 5y ago
  "What else is there to do but gamble?"
internetslave 5y ago
My honest opinion is the hard working professionals making 150-350k are getting hosed. Pay the majority of taxes in this country so that other people can loot, riot, and collect welfare. Asset prices debasing everyone’s wage due to rampant money printing, and they won’t stop. Money printing is a tax on the professional class. Being a hard working professional in this country is losing its allure, and is increasingly a suckers bet. “ Work hard! Don’t worry if we print money and triple the cost of your house and new mortgage! You are in the top 15%! Look your class only pays 20% of the taxes, never mind all that money we printed! It’s not a tax!” There’s a serious level of subversion about what’s going on economically in this country.
- Afforess 5y ago
  > My honest opinion is the hard working professionals making 150-350k are getting hosed. Pay the majority of taxes in this country so that other people can loot, riot, and collect welfare. There is a lot of confusion here to unpack, but the central idea, that taxes pay for the government is the key confusion. Taxes are a means of wealth redistribution and method to curb inflation. Taxes don't fund the federal government - it can print money just fine.
- Der_Einzige 5y ago
  At this pay level, you can easily become an asset owner. You're supposed to become a home owner and a stockholder (at least through your 401k). Don't even pretend that anyone in that range has it rough.
- N1H1L 5y ago
  This is such an inflammatorily bad take that I suspect it's trolling at this point. African Americans do not collect the majority of welfare in this country. Sops to multi billion dollar corporations like WalMart - why is that not welfare? A trillion dollars of HNW tax evasion happens every year, simply because the IRS is underfunded and understaffed - why is that not the problem? And isn't asset price inflation a direct outcome of inequality? Lower money velocity leads to asset bubbles - this is something we know of since the French Revolution now.
- osipov 5y ago
claudiulodro 5y ago
This article is not great: the entirety is like 10 bullet points with very little analysis. There has to be a better source than link at the top (WaPo's analysis seems pretty solid). Looking at the graph though, I'm curious: why did forecasters expect a huge vertical jump in April instead of a continuation of the trend from the month before, especially with all the small businesses that went under last year.
- jeffbee 5y ago
  It's because a lot of economists are as dumb as rocks. People like Larry Summers predicted a million new jobs because they are viewing the stimulus plan through the narrow and misleading lens of "output gap" and can't figure out other reasons people can't or don't work like limited mobility, housing crisis, and child care.
  - N1H1L 5y ago
    Most economists have no skin in the game. It's laughable how cargo cult the field is.
    - gruez 5y ago
      How much "skin in the game" do people in the other social sciences have? eg. anthropology, political science, sociology, law. Furthermore, what if they do have skin in the game, won't the retort just change to "well they have a well vested interest to lie/mislead"?
      - N1H1L 5y ago
        If the outcome of the game is peanuts it doesn't matter. But if not, and if national policy is based on that - it's very problematic. And yes, the last time we made public policies based on imperfect anthropology (Nazi Germany, Apartheid SA or Rhodesia) it was a disaster.
- bhupy 5y ago
  That's Axios's style. Their thesis is that most "analysis" is biased (and often wrong), and therefore they stick to just reporting the raw facts as concisely and easy to digest as possible. I, for one, love it but I understand why it may be off-putting to some.
hemloc_io 5y ago
I really hate the framing of the "Labor Shortage" narrative in general. Does supply and demand only work one way? The Citations Needed podcast did an interesting episode on this kind of framing.[0] Although they skew heavily toward the left so take it with a grain of salt. I'm curious to see if the heightened unemployment benefits act as a new de facto minimum wage law, but I have a feeling everything will be cut to try and force people back into the labor force before anything super interesting happens. [0] https://citationsneeded.medium.com/episode-135-the-labor-shortage-ruse-how-capital-invents-staffing-crises-to-bust-unions-and-fb42448a7e23 https://citationsneeded.medium.com/episode-135-the-labor-sho...
- willcipriano 5y ago
  Wages are pretty sticky, I'd bet the unemployment benefits have already permanently increased the wage floor nationally.
  - Balgair 5y ago
    One thing that I have not seen said is about the stability of unemployment. I remember last year that there were a lot of people waiting a long time to get on unemployment due to the pandemic. Months went by before those checks came in. Now, if you have the resources to work a job, you'll have to go off unemployment. But if that job fires you, you're stuck back in the possibly months long process to get unemployment. Sure, you could try to get another job, but that also has a time lag and other risks, and diapers don't buy themselves. It's not about the cash as much as it is about the cash-flow. You can plan around a small amount. But variable amounts are much harder to plan for, even if the net cash may be higher in the end.
  - LanceH 5y ago
    > have already permanently increased the wage floor nationally At the expense of full employment.
    - ZoomerCretin 5y ago
      https://rooseveltinstitute.org/2017/12/18/how-widespread-is-labor-monopsony-some-new-results-suggest-its-pervasive/ https://rooseveltinstitute.org/2017/12/18/how-widespread-is-... The labor market is not adequately explained with only Econ 101 concepts. Employers pay below the true market rate that they are capable of paying because of their market power to set prices.
kingsuper20 5y ago
Looking at the chart, it has exactly the appearance I would expect. Re-employment after some kind of sudden downtrend would display the same behavior as fuel prices at retail gas stations I would think. That is to say a steep change followed by a slow movement in the other direction.
splithalf 5y ago
The math here is simple. Economy = vaccination rate. People aren’t getting vaccinated so we can’t return to business as usual. People who claim it’s about incentives like wages or unemployment pay are imposing their agenda on the facts. It’s all about vaccinations at this point. We vaccinate everyone or get stagflation.
gmays 5y ago
I'm not sure what to think about the current situation. My wife and other local business owners I've spoken with over the last couple of months (we live on Cape Cod) are having a hard time hiring people, and they're all offering a minimum of $15-$16/hr. If the worker shortage continues, it'll compound in the summer with the tourist season, especially if the typical seasonal workers aren't available due to travel restrictions (many are international). We're also having trouble with schools and daycares that've become used to closing at 3-4 pm and are unlikely to return to staying open until 5-5:30 pm. It'll be interesting to see the long-term effects of this accidental experiment over the last year of UBI/shorter work hours. We're lucky enough to afford a nanny to fill the gaps along with family, but I have no idea how other people do it. Part of me hopes it's just the additional family duties and increased unemployment benefits keeping people temporarily out of the workforce for now and not a permanent trend of preferred underemployment. It's been tough seeing so many local businesses go under over the last year.
- otoburb 5y ago
  As a local business owner, at what point would you consider raising the hourly wages? I think it's a tough price-discovery exercise for business owners because you don't necessarily have workers proactively giving you their asking price; you're having to place bids and then wait N days to figure out whether the bid was sufficient (or not). Then there's also the decision of whether to pass those costs downstream to your customers.
- badmadrad 5y ago
  seasonal work is less desirable than full time work. also cape cod is an odd place. they have a huge need for seasonal low skilled labor but don't really have the housing to support it.
- akvadrako 5y ago
  > over the last year of UBI There hasn't been any UBI the past year. UBI means you can work without losing your benefits. What we have now discourages work because it's effectively an 80-100% tax rate on earnings.
antattack 5y ago
It's likely there are few quality jobs available. A friend who was a waiter is not going back to work because her salary depends (75% of it) on tips, however many households switched to food delivery services. Once people start going to restaurants again, in large enough numbers, employees who depend on tips will return. Base salary for servers is peanuts otherwise.
- coward76 5y ago
  No more tipping. Make companies charge a fair price for their food, and pay a fair wage.
sdenton4 5y ago
_The Lie of ‘No One Wants to Work’_ https://www.eater.com/22417344/restaurant-labor-shortage-covid-19-unemployment-benefits-risks https://www.eater.com/22417344/restaurant-labor-shortage-cov... Restaurant workers in particular are facing higher risk for less pay (fewer customers == fewer tips), and working conditions in restaurants were already terrible. From the article : “We are so sick and tired of [restaurant owners] assuming we want a handout. We want to work, but we also want to be treated like human beings. We haven’t been for way too long.”
pmastela 5y ago
Since a lot of policy was based off of these employment forecasts which turned out to be way off, what are the expected adjustments to the policies in place?
ok_coo 5y ago
I was making $12/hour as a bus boy at a restaurant in the 90s. $15/hour is pathetic. Target is _starting_ at $15/hour in the rural midwest, near me. Yes, maybe their restaurant (and other biz) margins are small but they're business people, get creative. Biz is not entitled to cheap labor. Adjust prices, raise wages, have managers do work. This is the first time in decades I've heard of labor having an actual choice. People should be able to be picky about what job they want to work. Do you want to work a service job during COVID? Pay is crap, people are crap to employees, and you get the chance of getting a deadly virus. Sign me up!

82 points by throwkeep 5y ago

anewaccount2021 5y ago

Tough position for Biden. The poor would rather prolong rent forgiveness + stimulus. The rich love the negative employment numbers since it implies lower rates for longer, which means more gains in the market.

xnx 5y ago

Any claims about labor shortage, hiring difficulties, "no one wants to work", etc. should always be read with the automatic addendum "...at the price we want to pay".

NikolaeVarius 5y ago

I've pretty much stopped paying attention to these numbers. I read/listen to multiple sources of news, and the amount of vastly different interpretations of these numbers has me concluding that its pointless to give a damn.

hnarn 5y ago
Can you give an example of a single type of statistic where this argument can't be made? Are statistics overall categorically useless? Should they not be reported?
- maxqin1 5y ago
  > Should they not be reported? They probably shouldn't... 1) Humans are on average bad with numbers. This could have unforseen negative impacts. 2) Your average person can't define causal inference, let alone make a well-informed one. 3) Few of the presenters (news people) have a grasp on 1 & 2. If they do, also communicating that becomes a challenge that requires solving 1 & 2.
- fumeux_fume 5y ago
  This does not appear to be a very charitable interpretation of the above comment.
- bartart 5y ago
  I think in this case it’s worth pointing out that monthly unemployment numbers are historically very uncertain and the subsequent revisions to the initial number are often pretty substantial. https://projects.fivethirtyeight.com/jobs-report-growth-unemployment/ https://projects.fivethirtyeight.com/jobs-report-growth-unem...
- blululu 5y ago
  Statistics are certainly not categorically useless, but they are widely misunderstood and thus widely abused. In less political areas I have seen trained experts make elementary mistakes (mistakes happen and it's fine). A lot (nearly all in my informal sampling) of journalists have zero understanding of statistical methods. The term statistical significance leads to knee jerk reactions advocating policy without understanding the basic procedure, or implications of hypothesis testing. As a numerate person I would personally appreciate it if all statistical claim had a link to a Jupyter Notebook and the associated data. (Though perhaps Observable would be the best choice here since it is run on the web).

Sideyon 5y ago

Thank you Biden

lawnchair_larry 5y ago

And what did you think would happen if you blindly paid people to not look for work? The Biden administration does not seem to understand basic behavioral economics.

colejohnson66 5y ago
You do understand we’re in the middle of a major pandemic, right? It’s not paying people not to work; it’s paying people who were chosen (by the company, not the government) to not work. I was furloughed from a job in March last year. I wasn’t paid unemployment to leave, but instead, paid because I couldn’t work.
- infamouscow 5y ago
  Vaccines are available to everyone that wants one. It's time to get back to work.
- Rebelgecko 5y ago
  Are we still in the middle of the pandemic? At least where I live, anyone who wants a vaccine has been able to get one for a month, so pretty much anyone who wants to be should be fully vaccinated in the next few weeks. Also, IIRC the CARES Act suspended the requirement to look for more work if you've been furloughed/laid off. A friend of mine who works in a restaurant was getting paid more to go surf at the beach than he used to get paid to go to work. When his employer opened up, my friend was understandably not motivated to get scheduled for very many shifts.
  - soperj 5y ago
    >Are we still in the middle of the pandemic? At least where I live, anyone who wants a vaccine has been able to get one for a month, so pretty much anyone who wants to be should be fully vaccinated in the next few weeks. USA is still #3 in the world for cases per day.
    - Rebelgecko 5y ago

dtwest 5y ago

This is a very surprising number given the expectations. There are many companies hiring in the service sector that cannot find enough workers. As such, average hours worked is skyrocketing as well: https://fred.stlouisfed.org/series/AWHAELAH https://fred.stlouisfed.org/series/AWHAELAH It seems likely that unemployment benefits are contributing to this labor shortage.

ineptech 5y ago
I disagree, this seems like an expected outcome. The economy is turbulent; it has been disrupted and is in the process of adjusting. Some (relatively brief and localized) shortages are expected as the markets find a new equilibrium. Unemployment benefits are not causing the disruptive effects, they're (to some extent) protecting workers from the disruptive effects, which is exactly what they're supposed to do. They are not a handout, they pay for themselves historically; we should let them work.
enraged_camel 5y ago
The other likely factor is that many schools are either still closed or are doing remote learning, which means many parents are stuck with having to look after their kids when they would otherwise be working. edit: why the downvotes?
- throwaway_kufu 5y ago
  Child care is a significant and major expense in the US, most of the people on HN that work for tech companies work for companies that more or less are openly hostile towards married employees with families, in fact anything less than a young single working willing to drink the company cool-aide often “isn’t a good culture fit”. But the average worker has additional costs that never get factored in just to work, transportation (for me that’s about $600/month), dry cleaning ($100), food (of course this can’t be negated entirely but is often more expensive while working outside the home). The downvotes are because the haves want the have nots to shut up and get back to work for them. It’s the equivalent of taking legitimate points raised by workers and responding with stop being a smart ass.
- 5y ago

seoaeu 5y ago

That's some pretty strong spin... Unnamed forecasters thought the number of jobs added should be higher, so we're disappointed by a quarter million new jobs.

syops 5y ago
Typically the forecasters are not this wrong. Thus this is cause for investigation and possibly concern. We do want policy makers to be given forecasts on these sorts of things and we do want them to be alarmed when the forecasts are so far off.
- Jiocus 5y ago
  Could less accurate forecasting be attributed to exceptional circumstances of the environment they have tried to analyze? I have the feeling there's quite a few “predictions” during this pandemic that are off. Where people or the economy have acted contrary to popular beliefs or rational modelling.
  - syops 5y ago
    I have no expertise in this area. I imagine that there is an increased amount of guessing due to uncertainty about our present circumstances.
takeda 5y ago
And it is for April, the general population started being vaccinated in middle of it and it also takes over a month (according to the companies) to get full effect of the vaccine.
reedjosh 5y ago
Well, the trend was up over the last three months. 233 536 770(P) 266(P) https://data.bls.gov/timeseries/CES0000000001?output_view=net_1mth https://data.bls.gov/timeseries/CES0000000001?output_view=ne... For vaccines coming online and people _starting_ to get back to normal, it doesn't seem like a stretch to expect a number higher than this.
5y ago

FpUser 5y ago

Meanwhile Canada lost just about as many during last month due to lockdowns.

speeder 5y ago

I am worried for the US economy. Dogecoin, a meme and joke, went from a quarter of a cent last year to 66 cents today. And the second most popular job in today payrolls were Casino workers, at an staggering 72k people. Something must be seriously wrong when people think it is wise to dump money on memes and casinos!

nimos 5y ago
I think the unaffordability of housing is a driver of this. At the rate prices increase saving a couple grand a year is basically pointless so might as well yolo on some crypto/gambling on the off chance of making it big. It's not entirely illogical either if you assume the marginal utility of money is discontinuous and there is a jumps around at certain thresholds such as being able to afford a reasonable home.
- imtringued 5y ago
  I wonder how inflexible this demand is, what if it's a checkbox that almost every human wants to check? Maybe not for their entire life, but at least until the kids move out. It is entirely possible that cheap financing results in higher down payments which in the end actually fuels a savings craze that drags inflation down. I also suspect that over the long term a lot of products are going down in price and housing costs like rents are dragging the CPI up.
intergalplan 5y ago
Sure looks like capital chasing returns in the face of weak—or at least insufficient, for the amount of capital available—demand.
RC_ITR 5y ago
Or, and hear me out here, the reason casinos posted some of the highest gains in this report is because they are just now reopening.
BitwiseFool 5y ago
"What else is there to do but gamble?"

internetslave 5y ago

My honest opinion is the hard working professionals making 150-350k are getting hosed. Pay the majority of taxes in this country so that other people can loot, riot, and collect welfare. Asset prices debasing everyone’s wage due to rampant money printing, and they won’t stop. Money printing is a tax on the professional class. Being a hard working professional in this country is losing its allure, and is increasingly a suckers bet. “ Work hard! Don’t worry if we print money and triple the cost of your house and new mortgage! You are in the top 15%! Look your class only pays 20% of the taxes, never mind all that money we printed! It’s not a tax!” There’s a serious level of subversion about what’s going on economically in this country.

Afforess 5y ago
> My honest opinion is the hard working professionals making 150-350k are getting hosed. Pay the majority of taxes in this country so that other people can loot, riot, and collect welfare. There is a lot of confusion here to unpack, but the central idea, that taxes pay for the government is the key confusion. Taxes are a means of wealth redistribution and method to curb inflation. Taxes don't fund the federal government - it can print money just fine.
Der_Einzige 5y ago
At this pay level, you can easily become an asset owner. You're supposed to become a home owner and a stockholder (at least through your 401k). Don't even pretend that anyone in that range has it rough.
N1H1L 5y ago
This is such an inflammatorily bad take that I suspect it's trolling at this point. African Americans do not collect the majority of welfare in this country. Sops to multi billion dollar corporations like WalMart - why is that not welfare? A trillion dollars of HNW tax evasion happens every year, simply because the IRS is underfunded and understaffed - why is that not the problem? And isn't asset price inflation a direct outcome of inequality? Lower money velocity leads to asset bubbles - this is something we know of since the French Revolution now.
osipov 5y ago

claudiulodro 5y ago

This article is not great: the entirety is like 10 bullet points with very little analysis. There has to be a better source than link at the top (WaPo's analysis seems pretty solid). Looking at the graph though, I'm curious: why did forecasters expect a huge vertical jump in April instead of a continuation of the trend from the month before, especially with all the small businesses that went under last year.

jeffbee 5y ago
It's because a lot of economists are as dumb as rocks. People like Larry Summers predicted a million new jobs because they are viewing the stimulus plan through the narrow and misleading lens of "output gap" and can't figure out other reasons people can't or don't work like limited mobility, housing crisis, and child care.
- N1H1L 5y ago
  Most economists have no skin in the game. It's laughable how cargo cult the field is.
  - gruez 5y ago
    How much "skin in the game" do people in the other social sciences have? eg. anthropology, political science, sociology, law. Furthermore, what if they do have skin in the game, won't the retort just change to "well they have a well vested interest to lie/mislead"?
    - N1H1L 5y ago
      If the outcome of the game is peanuts it doesn't matter. But if not, and if national policy is based on that - it's very problematic. And yes, the last time we made public policies based on imperfect anthropology (Nazi Germany, Apartheid SA or Rhodesia) it was a disaster.
bhupy 5y ago
That's Axios's style. Their thesis is that most "analysis" is biased (and often wrong), and therefore they stick to just reporting the raw facts as concisely and easy to digest as possible. I, for one, love it but I understand why it may be off-putting to some.

hemloc_io 5y ago

I really hate the framing of the "Labor Shortage" narrative in general. Does supply and demand only work one way? The Citations Needed podcast did an interesting episode on this kind of framing.[0] Although they skew heavily toward the left so take it with a grain of salt. I'm curious to see if the heightened unemployment benefits act as a new de facto minimum wage law, but I have a feeling everything will be cut to try and force people back into the labor force before anything super interesting happens. [0] https://citationsneeded.medium.com/episode-135-the-labor-shortage-ruse-how-capital-invents-staffing-crises-to-bust-unions-and-fb42448a7e23 https://citationsneeded.medium.com/episode-135-the-labor-sho...

willcipriano 5y ago
Wages are pretty sticky, I'd bet the unemployment benefits have already permanently increased the wage floor nationally.
- Balgair 5y ago
  One thing that I have not seen said is about the stability of unemployment. I remember last year that there were a lot of people waiting a long time to get on unemployment due to the pandemic. Months went by before those checks came in. Now, if you have the resources to work a job, you'll have to go off unemployment. But if that job fires you, you're stuck back in the possibly months long process to get unemployment. Sure, you could try to get another job, but that also has a time lag and other risks, and diapers don't buy themselves. It's not about the cash as much as it is about the cash-flow. You can plan around a small amount. But variable amounts are much harder to plan for, even if the net cash may be higher in the end.
- LanceH 5y ago
  > have already permanently increased the wage floor nationally At the expense of full employment.
  - ZoomerCretin 5y ago
    https://rooseveltinstitute.org/2017/12/18/how-widespread-is-labor-monopsony-some-new-results-suggest-its-pervasive/ https://rooseveltinstitute.org/2017/12/18/how-widespread-is-... The labor market is not adequately explained with only Econ 101 concepts. Employers pay below the true market rate that they are capable of paying because of their market power to set prices.

kingsuper20 5y ago

Looking at the chart, it has exactly the appearance I would expect. Re-employment after some kind of sudden downtrend would display the same behavior as fuel prices at retail gas stations I would think. That is to say a steep change followed by a slow movement in the other direction.

splithalf 5y ago

The math here is simple. Economy = vaccination rate. People aren’t getting vaccinated so we can’t return to business as usual. People who claim it’s about incentives like wages or unemployment pay are imposing their agenda on the facts. It’s all about vaccinations at this point. We vaccinate everyone or get stagflation.

gmays 5y ago

I'm not sure what to think about the current situation. My wife and other local business owners I've spoken with over the last couple of months (we live on Cape Cod) are having a hard time hiring people, and they're all offering a minimum of $15-$16/hr. If the worker shortage continues, it'll compound in the summer with the tourist season, especially if the typical seasonal workers aren't available due to travel restrictions (many are international). We're also having trouble with schools and daycares that've become used to closing at 3-4 pm and are unlikely to return to staying open until 5-5:30 pm. It'll be interesting to see the long-term effects of this accidental experiment over the last year of UBI/shorter work hours. We're lucky enough to afford a nanny to fill the gaps along with family, but I have no idea how other people do it. Part of me hopes it's just the additional family duties and increased unemployment benefits keeping people temporarily out of the workforce for now and not a permanent trend of preferred underemployment. It's been tough seeing so many local businesses go under over the last year.

otoburb 5y ago
As a local business owner, at what point would you consider raising the hourly wages? I think it's a tough price-discovery exercise for business owners because you don't necessarily have workers proactively giving you their asking price; you're having to place bids and then wait N days to figure out whether the bid was sufficient (or not). Then there's also the decision of whether to pass those costs downstream to your customers.
badmadrad 5y ago
seasonal work is less desirable than full time work. also cape cod is an odd place. they have a huge need for seasonal low skilled labor but don't really have the housing to support it.
akvadrako 5y ago
> over the last year of UBI There hasn't been any UBI the past year. UBI means you can work without losing your benefits. What we have now discourages work because it's effectively an 80-100% tax rate on earnings.

antattack 5y ago

It's likely there are few quality jobs available. A friend who was a waiter is not going back to work because her salary depends (75% of it) on tips, however many households switched to food delivery services. Once people start going to restaurants again, in large enough numbers, employees who depend on tips will return. Base salary for servers is peanuts otherwise.

coward76 5y ago
No more tipping. Make companies charge a fair price for their food, and pay a fair wage.

sdenton4 5y ago

_The Lie of ‘No One Wants to Work’_ https://www.eater.com/22417344/restaurant-labor-shortage-covid-19-unemployment-benefits-risks https://www.eater.com/22417344/restaurant-labor-shortage-cov... Restaurant workers in particular are facing higher risk for less pay (fewer customers == fewer tips), and working conditions in restaurants were already terrible. From the article : “We are so sick and tired of [restaurant owners] assuming we want a handout. We want to work, but we also want to be treated like human beings. We haven’t been for way too long.”

pmastela 5y ago

Since a lot of policy was based off of these employment forecasts which turned out to be way off, what are the expected adjustments to the policies in place?

ok_coo 5y ago

I was making $12/hour as a bus boy at a restaurant in the 90s. $15/hour is pathetic. Target is _starting_ at $15/hour in the rural midwest, near me. Yes, maybe their restaurant (and other biz) margins are small but they're business people, get creative. Biz is not entitled to cheap labor. Adjust prices, raise wages, have managers do work. This is the first time in decades I've heard of labor having an actual choice. People should be able to be picky about what job they want to work. Do you want to work a service job during COVID? Pay is crap, people are crap to employees, and you get the chance of getting a deadly virus. Sign me up!