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Will the rich world’s worker deficit last?

191 points by prostoalex 5y ago

api 5y ago
Easy solution: either raise wages or lower prices. As it stands wages are too low to attract workers given prices, especially the price of real estate.
- j_walter 5y ago
  How will someone lower prices when the government has done nothing but print money in the last 4 years...let alone the free cash giveaways in the last 18 months. People are using that money to buy bigger or more houses...thus driving up the price of real estate.
  - sanxiyn 5y ago
    It's mostly not inflation. Inflation-adjusted house price is also up.
    - j_walter 5y ago
      Depends on your definition of inflation... >In economics, inflation (or less frequently, price inflation) is a general rise in the price level of an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.
  - rtpg 5y ago
    yes the ... one-time $3400 checks and a major economic contraction. That definitely caused 10+% price increases on $500k+ homes. Beyond everything else, this is just mathematically absurd.
    - missedthecue 5y ago
      There was also boosted unemployment. In some states people were taking in over $4000 per month in unemployment. That's a lot of money to not work.
      - forz877 5y ago
        It's still not enough to dispute the parent's comment. There isn't anyone poor getting rich off unemployment. It's not the reason for the housing boom.
        onlyrealcuzzo 5y ago
        You could buy houses in cash in half the cities in Ohio for 6 months unemployment + 3 stimulus checks. There are plenty of places like this in the US - Alabama, Mississippi, etc. Sure - that is not the reason house prices in Marin are up 30%. That's probably got more to do with central banks pushing up equities >30%. And probably because when you cut mortgage interest rates by 1 percentage point (which they did), you can afford ~15% more house. In real terms - monthly payments for new housing purchases are down.
        forz877 5y ago
        Sure, you could buy a house in the extremely small cities of Ohio with little to no jobs or economic future. I doubt many are. Almost all the population growth in the US is in major metro areas. If those cities are close to commute to Cleveland, Columbus, or Cincinnati, sure.
        onlyrealcuzzo 5y ago
        You could literally buy houses in Cleveland for less than $30k. 6 months of unemployment plus stimulus in Ohio was >$25k. This is even more true for Detroit.
        5y ago
  - api 5y ago
    Good point, which is why wages have to go up. Eventually everyone will make six figures and a loaf of bread will be $16 but housing will be rationally priced again with starter homes at $500k.
- ericmcer 5y ago
  How do you lower the price of real estate?
  - betaby 5y ago
    Increase supply by building more and building up.
    - sanxiyn 5y ago
      This doesn't help in the short term, because building takes time. Moving people is faster than constructing buildings.
      - TuringNYC 5y ago
        You're right it does not help in the short term, but we've been speaking about the Bay Area problems (for example) for two decades and vigorously discussing it in the past decade -- building five years ago could have solved today's problem. Similarly, we could speak about it for another decade, or we could build now and solve part of the problem in five years. This also doesn't exclude other fixes that can happen orthogonally.
      - Telemakhos 5y ago
        > building takes time It does not have to take nine months (the national average) to build a house or a hundred houses. Housing can be and in times of necessity has been built rapidly and well. My favorite example is Hilton Village in Newport News, VA, built to house workers at Newport News Shipyard at the tail end of and after World War I. Five hundred units were constructed within two years, and they were built cheaply yet with a randomization to the sequence of models and detailing that kept the houses from feeling like a cookie-cutter development, avoiding pitfalls into which many suburbs today fall. A hundred years later the homes remain occupied and in fact prized today for their charm. The barriers to affordable, desirable, swiftly built housing are artificial.
        prostoalex 5y ago
- rodgerd 5y ago
  1,800% increase in CEO pay vs 10s % for worker pay. Gee, I wonder what the problem could be?
  - ptr2voidStar 5y ago
    Now we're getting closer to the truth - although your hyperbole doesn't help, you're definitely on the right track.
Krisjohn 5y ago
If someone dies, thereby leaving a job without applying for unemployment benefit, and someone on benefits replaces them, thereby leaving the unemployment stats, does that count as a job being "created"?
- NoPicklez 5y ago
  No, because the job role was always there.
- MattGaiser 5y ago
  It would depend on the measure. Some job numbers are based on payrolls, so no. If using unemployment, yes.
- jameshart 5y ago
  You've stumbled on the ingenious scheme to end unemployment put forward by Peter Cook's Prime Minister in Whoops Apocalypse: https://youtu.be/NBHHFnUqo5o?t=119 https://youtu.be/NBHHFnUqo5o?t=119 (You can wind back to the start to see the underlying cause of unemployment as well)
fumblebee 5y ago
Non-paywall link: https://outline.com/F43cPG https://outline.com/F43cPG
version_five 5y ago
Most people work but most dont necessarily have to, at least as much as we do. People enter the "rat race" because it gives them something, not just a source of money but other achievement and identity stuff. I think a lot of those incentives are changing. My take on work is that it's getting more exploitive, more administrative, less fun and less satisfying. Between politics and policies and management, work is asking much more, not physically but in terms of behaviors and beliefs. It's a new kind of exploitation we haven't really faced before. And it's my theory anyway that a lot of people have had enough. A simpler way to say it is that more people would rather exist outside society, in a sense, and do their own thing, than put up with all the BS that comes with working for someone else. Even if the pay is worse. I bet most Uber Eats drivers make less than fast food employees, but I also bet they have less non work corporate BS to deal with, and outside whatever algorithmic unfairness can work as they want. In corporate jobs, the situation is magnified because the requirements of conformity are much greater, but so generally are the options.
- analog31 5y ago
  >>>> Most people work but most dont necessarily have to, at least as much as we do. I work as much as I do because I don't know what's going to happen next. Someone in my family could get sick. The economy could go into the crapper. I could live longer than normal (my parents are 90). Probably the worst corporate BS I could imagine would be commuting an hour or more, and I'm lucky that my commute is less than 1/2 hour by bike.
- Swizec 5y ago
  > It's a new kind of exploitation we haven't really faced before. I think the industrial world would love to disagree. Working at a factory my grandma would have carefully regulated break times, food times, etc. All controlled by a central clock for everyone on shift. It makes sense when you consider factory line workers as part of the machine, but it's also kinda bullshit from a human perspective. And that was after the big wins of the labor movement in the early 1900's. Imagine how bad it was in the late 1800's. The new innovation our generation introduced is that because everyone is supposed to be following their dream and passion, you not only have to be a good worker, you also have to love it. If you don't, you are expected to perform the part of someone who does.
tuatoru 5y ago
From the article:- > Your correspondent recently suffered the indignity of having to board a red-eye from JFK airport entirely sober because all the airport bars were still shut. What a Karen. TFA is the usual superficial Economist tripe - there's no analysis there.
- dang 5y ago
  Ok, but please don't post unsubstantive comments to Hacker News. In particular, please don't copy the most objectionable thing in an article and then paste it here to indignantly object to it. That's a trope of shallow discussion. We're hoping for something more interesting here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - tuatoru 5y ago
    I apologise. Here's the expanded version. The writer was asserting that employment in service industries hasn't returned to pre-Covid levels because people don't want to work, but immediately goes on to describe seeing several closed places of business in that sector. That seems schizophrenic (in the dictionary definition), and makes it seem like he has done no real research. Casually boasting about air travel, one of the main carbon emission sources, during the pandemic and in the context of the global warming caused floods and wildfires in Europe, makes the writer seem entitled and tone-deaf. Complaining, even jokingly, about service not being normal in a pandemic just makes that worse.
- version_five 5y ago
  Really? I thought that was one of the best parts of the article. Nothing wrong with slipping a joke in, it doesn't have to be all serious. That's one of the things I appreciate about the economist
sp332 5y ago
If the USA were really worried about unfilled job openings, they would downsize the TSA and other fluff "job creation" programs.
- jdavis703 5y ago
  Do we really want a bunch of armed people flying on planes? There seems to be enough assaults on flight crew as it stands today. Do we really want to add firearms and other weapons to the mix?
  - sp332 5y ago
    We were doing just fine keeping guns off of planes without the TSA. That's why the 9/11 hijackers had to use mace and small knives. ETA: I base most of my thinking on this on Bruce Schneier's points, so I'm just going to link his blog here. https://www.schneier.com/tag/air-travel/page/8/ https://www.schneier.com/tag/air-travel/page/8/ And a quote from an Atlantic interview: “Only two things have made flying safer: the reinforcement of cockpit doors, and the fact that passengers know now to resist hijackers.” This assumes, of course, that al-Qaeda will target airplanes for hijacking, or target aviation at all. “We defend against what the terrorists did last week,” Schneier said. He believes that the country would be just as safe as it is today if airport security were rolled back to pre-9/11 levels. “Spend the rest of your money on intelligence, investigations, and emergency response.”
    - EMM_386 5y ago
      The TSA also has to enforce things like liquid bans, and making sure there are no explosive assembly components built into the heel of your shoe and yes those are still important. A reinforced cockpit door is not going to help you when you sneak on individual components for plastic explosives and assemble them in the lavatory. https://en.wikipedia.org/wiki/Bojinka_plot https://en.wikipedia.org/wiki/Bojinka_plot
      - mikem170 5y ago
        Didn't they scan carry on bags before the TSA? It would be the same thing, just with the newer scanners.
gesticulator 5y ago
How many people are not working because they suddenly no longer have a reliable place for child care? Lots of jurisdiction's protocols will shut down day cares or in-person schooling for a week or more after a single case. In that environment, who are you going to get to take care of your child that may have been exposed?
- sanxiyn 5y ago
  I think this is a large part. Opening in-person school should be a priority.
  - stocknoob 5y ago
    Turns out schooling is mostly about government-subsidized childcare after all.
    - deleted 5y ago
      [deleted]
    - snarf21 5y ago
      I disagree completely. If we were satisfied with a lower standard of living, one parent could stay home to take care of the kids. Keynes predicted 15 hour work weeks but he missed that we would increase our standard of living faster than the productivity gains.
      - tablespoon 5y ago
        > I disagree completely. If we were satisfied with a lower standard of living, one parent could stay home to take care of the kids. Keynes predicted 15 hour work weeks but he missed that we would increase our standard of living faster than the productivity gains. Is that productivity really needed/used for standard of living gains? Or do you need two incomes now because of a combination of capital taking bigger cut and dual-incomes bidding up the price of things. Also you have the phenomenon of companies trying to increase sales by reducing the service life of their products, which just increases churn without increasing living standards.
Mikeb85 5y ago
How can anyone say there's a worker deficit when we're so far below pre-pandemic employment? Maybe they should fix some of the issues preventing people from returning to work (childcare, pandemic restrictions) before complaining...
- forz877 5y ago
  Pandemic restrictions are pretty much nonexistent in large swaths of the US that have similar problems. There is certainly a worker deficit. Our society has moved up the stack and isn't bringing in enough cheap immigrant labor anymore to work the jobs even poor americans won't accept anymore.
  - Supermancho 5y ago
    Example, in North Dakota where you can get a union Costco job for 18$+/hr (or chick fila for 17/hr) there are plenty of places (including hospitals) offering 15$/hr and they can't find people to fill the slots. Your dog grooming is paying 11$/hr? That's just another business going bust. Businesses who were on a shoestring fail and yuppies continue to move in. The regional+national inflation has simply left large chunks of business in the dust without very cheap (immigrant) labor. This causes the makeshift infrastructure to weaken and the communities start to come apart.
    - fosk 5y ago
      Wouldn’t this incentivize automation?
      - Supermancho 5y ago
        What does that even mean? How do you incentivize automation for things like surgical tool sterilization (the aforementioned 15$/hr) or pet grooming, for which there is no "automation". Especially when you're working with populations in the thousands or 10s of thousands (eg cities like Bismarck or Billings), who would invest in that? Amazon is dropping in distribution centers from time to time at 15$ an hour when a municipal area gets to be over 100k pop, but that's just one vendor and one vertical.
drocer88 5y ago
Just raise wages. We seem to always get this "worker shortage" marketing campaign every few years from our fat cat leaders. There is no shortage. If I want a wagyu steak but only want to spend $5.00, does that mean there's a food shortage? Labor, goods and services are all subject to supply and demand. Let it work itself out. No special government subsides for people whining about shortages. I want a trip on one of these orbital space ships. Is there a space ship shortage?
- avmich 5y ago
  I'd propose a somewhat opposite explanation: worker shortage is an illusion created by a sort of accounting which decided to keep positions open and not fill them, even when qualified candidates come. So, not only there is no space ship shortage :) there is actually much bigger worker shortage, as I keep a billion positions open (I want slaves, of all kinds, especially with Wall Street experience) and can't fill them (I don't bother to try).
  - warkdarrior 5y ago
    What does it buy you, as employer, to whine about made-up worker shortages?
    - slim 5y ago
      Gov assistance
    - onion2k 5y ago
      You can tell your staff that you're trying to hire more people but it's hard, and if they can just put in the extra effort now it'll be easier in the future. Meanwhile, you get to save paying for an extra person and get more from your staff, so profits go up.
    - paxys 5y ago
      Employees have to temporarily take on extra work while managers promise that the open headcount for the senior dev who just left will be filled as quickly as possible. In fact, you should refer your friends! (who will all be promptly rejected)
taneq 5y ago
It's not a worker deficit, it's just the market finally catching up with the huge discrepancy between knowledge worker productivity (in real physical terms) and traditional knowledge worker pay levels. We've only had "knowledge workers" in the current high tech industrial sense for a couple of hundred years and our understanding of the value of one person's labour is still firmly based in the trades. It's still a relatively new idea that a single person working in the right way (eg. designing automated equipment) could produce hundreds or thousands of times as much as a person trying to directly produce the same thing. We've barely started to process the idea that a single person working in the right breakthrough technology could be almost infinitely productive.
- adam_arthur 5y ago
  It's definitely true that an individual can be many times more productive than another. However, the end state of software/SaaS is likely low margins, as regulations will be put into place to foster competition. SaaS has high margins due to the low marginal cost to produce additional units, which is close to free, in many cases. But it's also 0 marginal cost for any competitior. So in theory, in a perfectly competitive market, margins should be low, as two companies can produce roughly similar software. The problem comes in when you consider network effect and other factors that lead to a sort of natural Monopoly for a software company. Likely these factors will begin to get regulated over the coming years. For example, you could require that all SaaS companies provide an API that's sufficient to allow you to switch to a competitor at a click of a button. Circling back to your comment. My point is that pay in software is unlikely to remain abnormally high in the decades to come. Eventually supply of labor will increase, and business margins will decrease... Which effectively caps how much you can pay employees. Somewhat related; China has realized that fostering competition rather than allowing monopolies to form is likely to produce better long term outcomes for society... which is why they are enacting all of these new regulations. The logic makes sense, but it remains to be seen in the long run. I believe the US will follow, but it's a story that will take decades to play out fully.
Consultant32452 5y ago
There is no such thing as a worker deficit in a market economy. "The Economist" knows this. We have to stop engaging with anyone who speaks this way as legitimate actors. They only deserve scorn and mockery for their brazen dishonesty.
- BLKNSLVR 5y ago
  To clarify, putting my own words to what I think you're implying: The Economist is pushing the dishonest narrative that there's an employee shortage, when actually there's a glut of greedy "we don't want to pay higher wages" employers. The Economist is, therefore, enabling these greedy employers.
  - ryandrake 5y ago
    It's like me complaining there is a shortage of new Porsches, when I'm only willing to pay $10K. Just can't find any, and I've called around every dealership. Must be a shortage.
  - adam_arthur 5y ago
    Depending on independent actors in a free market system to act on specific moral principles rather than in their own best interest is not going to work in practice. You'll get some that adhere to those principles, and others that don't. If society deems minimum wage too low, government is the one responsible for regulating it to reflect those morals. Rather than see the employers as greedy, just accept that they'll most likely do whatever they can within the confines of the law to help themselves, and then change the law to shape the incentive. Anything else is just wishful thinking. Well intentioned, but not realistic to achieve the purported goal.
    - BLKNSLVR 5y ago
      Re-written as: >The Economist is, therefore, enabling employers to do whatever they can within the confines of the law to help themselves. Saying 'greedy' just saves 13 words. But I'm being flippant with what I consider to be an important topic. Let me be be positive, this: Depending on independent actors in a free market system to act on specific moral principles rather than in their own best interest is not going to work in practice. Feels like a variation of a "tragedy of the commons[0]" / "race to the bottom[1]" situation, which is where this: government is the one responsible for regulating it is exposed as the causal failure - in large part because, I think, the same people that influence the angle The Economist is taking are those who 'donate' to various members of government. The more I'm talking through this, the more I see the problem as voter apathy. If a member of government only gets feedback from industry lobbyists, that's all they'll be able to base their decisions on. Write your local members! Use your voice! Vote! (I'm saying this to myself as much as anyone else). Only politics can solve politics. [0]: https://en.wikipedia.org/wiki/Tragedy_of_the_commons https://en.wikipedia.org/wiki/Tragedy_of_the_commons [1]: https://en.wikipedia.org/wiki/Race_to_the_bottom https://en.wikipedia.org/wiki/Race_to_the_bottom
ihsw 5y ago
> It will depend on whether the people who have left the workforce can be lured back Incorrect. It will depend on how long lockdowns last.
guyzero 5y ago
So this is 95% just employers being unwilling to raise wages which will fix most shortages pretty quickly. In the longer term there may indeed be worker shortages as more countries face a demographic shift towards older people. In pretty much every developed economy the % of the population that's retired grows every year. Japan is now over 28% 65+, the US is 16% and growing, even China is facing the same issue. Long-term it's a smaller portion of the population supporting the economy. I'm sure it will stop at some point, but it isn't for now.
- randomdata 5y ago
  A shortage occurs when price cannot rise. When the answer is “just pay more”, the question is not about shortage, only unfulfilled dreams.
  - runeks 5y ago
    > A shortage occurs when price cannot rise. Do you have an example of this?
    - saberdancer 5y ago
      Anywhere where the product can be imported from abroad. If you can buy product A from Mexico for 10 USD, but can't get workers to produce the same product for 10 USD in USA, you cannot realistically increase the price.
      - randomdata 5y ago
        In that case the price could rise, but does not need to as the market is sufficiently supplied at a lower price point. A shortage occurs when buyers want to pay more, and need to pay more for the market to clear, but cannot do so for some reason (the law, for example). A decent indicator of there being a shortage is if the recipient of a product or service is determined by a non-price based mechanism, such as a lottery or a needs-based determination, as the usual 'highest bidder wins' method is not possible.
    - 5y ago
Rd6n6 5y ago
A 1 bedroom place where I live costs $1400-1600 (it’s an unusually expensive tourist town) and things are closing down once in a while because of worker shortages (Eg, lifeguard shortage was the most recent I saw). Where are these workers supposed to live? I know other places aren’t nearly this bad. I just can’t believe anyone is able to work in retail or food here
- XorNot 5y ago
  This is hitting the nail dead center: the mock surprise at worker shortages is missing the fact that every metric pointed to this happening pre-COVID as well - the US a whole was in a march towards pricing all it's workers out of their homes at their current wages. COVID has just accelerated the trend.
  - vvarren 5y ago
    Ding ding ding, we have the answer. I was in Lake Tahoe recently and my relatives there were saying how I should move there because there’s so many well paying jobs available… but the cheapest rent was like 1600!! This used to be an issue only in tourist towns but now that houses are priced based on how much they can make on Airbnb, versus the traditional model of how much a worker in the area could afford over 30 years, we’re absolutely screwed. Legislation needs to start with vacation rentals.
    - DaiPlusPlus 5y ago
      > there’s so many well paying jobs > “jobs” Employment, and employees, are not fungible - why do people (and more importantly: the news-media and the people elected to direct the economy) continue to speak of it as though it is?
      - el_dev_hell 5y ago
        > Employment, and employees, are not fungible - why do people (and more importantly: the news-media and the people elected to direct the economy) continue to speak of it as though it is? I've seen this mentioned a few times on HN. I find it a confusing concept. My position is 100% fungible. I write code to solve problems. There are thousands of people that can write equivalent code to solve the same problems. I'm legitimately interested: can you expand on how my position isn't fungible?
atlgator 5y ago
Related Q: The coverage I've seen talks about the worker shortage mostly in the minimum wage / lower income jobs. How is the tech sector doing? Are companies perceiving a shortage in tech workers due to changing attitudes around remote work and moving out to suburban or rural areas?
- chupchap 5y ago
  There's a hiring spree in Indian tech sector as of now, but that is mostly about folks changing companies at a rapid pace more than anything else. It didn't help that a lot of companies did not hire last year and all the open job positions had to be filled in this year. Companies being what they are, only wanted people with experience, bumping up the pay scale significantly.
kaminar 5y ago
Subtler is true...constant changes to the employee handbook...leaders being told in conference that their behavior outside reflects on the company, and to actively report those employees who are seen acting irresponsibly. The social media stigma is also well known and reviled. "We are watching" is the new normal.
dcow 5y ago
I know of one very real case pretty close to home where a group of “enterprising” fellas are fraudulently using the no questions asked forgivable payroll loans to line their pockets. They literally don’t need to work when we’re just handing out relief money and looking the other way. Would they be in trouble if they ever got audited? Likely. Will they ever get audited? Doubtful. One of the guys works with a friend who is still hard at work because he’s honest. It’s pretty discouraging.
- mlac 5y ago
  Anonymously report them?
  - dehrmann 5y ago
    IANAL, but no one likes a tattle.
    - yadaeno 5y ago
      I dont like having my tax money stolen.
      - dehrmann 5y ago
        It's not being stolen as much as its a rational response to poor public policy, so it needs to be addressed at the policy level.
1propionyl 5y ago
There is no worker deficit. The demand-side of the labor market simply isn't willing to pay what the supply-side expects, and is childishly throwing a tantrum that for once they have to compromise to market forces. The so called "worker deficit" only exists below ~15-20/h. Above that there's no issue whatsoever. It's a seller's market. Suck it up.
- adam_arthur 5y ago
  So why is it a seller's market? What are the market forces that led to this, when there wasn't a worker shortage just a little over a year ago?
  - 1propionyl 5y ago
    There was never a worker shortage. What there has been is a re-evaluation by workers of the value of their own work. Even without Covid this would have happened as low-income workers in many areas were either rapidly approaching being unequivocally priced out of living anywhere remotely near their work, or already were. Covid just forced the issue sooner and faster, rather than letting it fester. Why would anyone continue working for subsistence wages that can't even pay rent where they live and work? Their only sensible options are demanding more pay or leaving. In major cities, with current rents, it simply isn't feasible to pay janitors, garbage collectors, fast-food workers, restaurant employees, etc as little as they've been paid, for the very simple reason that they can't afford to live there on those wages. Unless we're willing to give up sanitation, garbage collection, fast food, and cheap restaurants in those cities, there is no reasonable solution except increasing wages. (There are of course unreasonable solutions such as exploiting immigrants, wage theft, and prison labor).
    - loosescrews 5y ago
      > What there has been is a re-evaluation by workers of the value of their own work. I think a component of this is hazard pay. The pandemic has made a lot of these low pay jobs more dangerous. If everything else is the same, but the job is now more dangerous, fewer people will take the employment.
fulafel 5y ago
> Compare America and the EU. In the spring of 2020 aggregate working hours in both economies tanked. America then passed gargantuan stimulus packages, while European governments chose more modest measures. The recovery in working hours since then has been only marginally better in America—not much extra labour for a lot of extra cash. Does this take the difference in automatic stabilizers into account? There was probably quite a lot of extra cash injected from the stronger social net in the EU. Eg https://www.nber.org/papers/w16275 https://www.nber.org/papers/w16275 says "In the case of an unemployment shock 47 percent of the shock are absorbed in the EU, compared to 34 per cent in the US."
apples_oranges 5y ago
If we have dealt with all but the highest levels in the hierarchy of needs (according to Maslow) we turn to the top, self-actualisation. No wonder people in the west start questioning their jobs and careers.
thejackgoode 5y ago
With all the valid arguments about pay here, subject seems a bit stretched: I'd expect more than 3% lower employment, given the traveling restrictions alone. Not taking into account business closures, shift to online work, overall health impact of the pandemic etc.
tompccs 5y ago
Classic Economist to miss the story behind the story: "The working-age employment rate (the share of 16- to 64-year-olds in a job) was at an all-time high in over half of rich countries." Yes, because about half the population - women - who previously weren't counted as part of the "work force" are now counted. However, looking at males alone, they have been dropping out of the workforce at an alarming rate: https://www.statista.com/statistics/191725/us-male-civilian-labor-force-participation-rate-since-1990/#:~:text=This%20graph%20shows%20the%20male,participated%20in%20the%20job%20market https://www.statista.com/statistics/191725/us-male-civilian-.... The Pandemic seems to be an acceleration of the latter trend, and perhaps a partial reversal of the former, with more women deciding to exit the workforce either temporarily or permanently.
swiley 5y ago
No. It's the result of massive inflation but the information exchange is still ongoing, at some point the market will correct and things will get very ugly.
jokethrowaway 5y ago
The economy has been forcefully closed. We're in our second year (the longest "14 days to flatten the curve" ever) of people being locked down in their homes. Two natural assumptions are that there is less demand for economic activity and that people are depressed / have less mental bandwidth for work. Without being able to do most of the fun stuff in life thanks to our authoritarian governments, I burnt out at my job, quit and dedicated solely to running my side business. I make way less money than before but it's not something I could mentally handle anymore.
Proven 5y ago
Idiots. There's no deficit, labor participation is pathetic and socialism and central banks are to blame.
cies 5y ago
> Will the rich world’s worker deficit last? Since a market is about supply and demand finding each other at a price point, and supply may well grow if the price is raised, can we not rephrase this as: "When will the underpayment of workers in the rich world end?"
echopurity 5y ago
>employment in the rich world is 3% below its pre-pandemic high (see chart 1). That points to a deficit of about 18m people—a huge waste of talent, not to mention a hit to tax revenues. It's telling how The Economist views lost taxes and lost "talent" as the worst effects of unemployment, rather than homelessness or hunger for example. And apparently people using their talents for personal enjoyment is outside of The Economist's models. No surprise there.
kazinator 5y ago
> It will depend on whether the people who have left the workforce can be lured back That's the short term view. The long term view: are those societies having enough children?

191 points by prostoalex 5y ago

api 5y ago

Easy solution: either raise wages or lower prices. As it stands wages are too low to attract workers given prices, especially the price of real estate.

j_walter 5y ago
How will someone lower prices when the government has done nothing but print money in the last 4 years...let alone the free cash giveaways in the last 18 months. People are using that money to buy bigger or more houses...thus driving up the price of real estate.
- sanxiyn 5y ago
  It's mostly not inflation. Inflation-adjusted house price is also up.
  - j_walter 5y ago
    Depends on your definition of inflation... >In economics, inflation (or less frequently, price inflation) is a general rise in the price level of an economy over a period of time. When the general price level rises, each unit of currency buys fewer goods and services; consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy.
- rtpg 5y ago
  yes the ... one-time $3400 checks and a major economic contraction. That definitely caused 10+% price increases on $500k+ homes. Beyond everything else, this is just mathematically absurd.
  - missedthecue 5y ago
    There was also boosted unemployment. In some states people were taking in over $4000 per month in unemployment. That's a lot of money to not work.
    - forz877 5y ago
      It's still not enough to dispute the parent's comment. There isn't anyone poor getting rich off unemployment. It's not the reason for the housing boom.
      - onlyrealcuzzo 5y ago
        You could buy houses in cash in half the cities in Ohio for 6 months unemployment + 3 stimulus checks. There are plenty of places like this in the US - Alabama, Mississippi, etc. Sure - that is not the reason house prices in Marin are up 30%. That's probably got more to do with central banks pushing up equities >30%. And probably because when you cut mortgage interest rates by 1 percentage point (which they did), you can afford ~15% more house. In real terms - monthly payments for new housing purchases are down.
        forz877 5y ago
        Sure, you could buy a house in the extremely small cities of Ohio with little to no jobs or economic future. I doubt many are. Almost all the population growth in the US is in major metro areas. If those cities are close to commute to Cleveland, Columbus, or Cincinnati, sure.
        onlyrealcuzzo 5y ago
        You could literally buy houses in Cleveland for less than $30k. 6 months of unemployment plus stimulus in Ohio was >$25k. This is even more true for Detroit.
        5y ago
- api 5y ago
  Good point, which is why wages have to go up. Eventually everyone will make six figures and a loaf of bread will be $16 but housing will be rationally priced again with starter homes at $500k.
ericmcer 5y ago
How do you lower the price of real estate?
- betaby 5y ago
  Increase supply by building more and building up.
  - sanxiyn 5y ago
    This doesn't help in the short term, because building takes time. Moving people is faster than constructing buildings.
    - TuringNYC 5y ago
      You're right it does not help in the short term, but we've been speaking about the Bay Area problems (for example) for two decades and vigorously discussing it in the past decade -- building five years ago could have solved today's problem. Similarly, we could speak about it for another decade, or we could build now and solve part of the problem in five years. This also doesn't exclude other fixes that can happen orthogonally.
    - Telemakhos 5y ago
      > building takes time It does not have to take nine months (the national average) to build a house or a hundred houses. Housing can be and in times of necessity has been built rapidly and well. My favorite example is Hilton Village in Newport News, VA, built to house workers at Newport News Shipyard at the tail end of and after World War I. Five hundred units were constructed within two years, and they were built cheaply yet with a randomization to the sequence of models and detailing that kept the houses from feeling like a cookie-cutter development, avoiding pitfalls into which many suburbs today fall. A hundred years later the homes remain occupied and in fact prized today for their charm. The barriers to affordable, desirable, swiftly built housing are artificial.
      - prostoalex 5y ago
rodgerd 5y ago
1,800% increase in CEO pay vs 10s % for worker pay. Gee, I wonder what the problem could be?
- ptr2voidStar 5y ago
  Now we're getting closer to the truth - although your hyperbole doesn't help, you're definitely on the right track.

Krisjohn 5y ago

If someone dies, thereby leaving a job without applying for unemployment benefit, and someone on benefits replaces them, thereby leaving the unemployment stats, does that count as a job being "created"?

NoPicklez 5y ago
No, because the job role was always there.
MattGaiser 5y ago
It would depend on the measure. Some job numbers are based on payrolls, so no. If using unemployment, yes.
jameshart 5y ago
You've stumbled on the ingenious scheme to end unemployment put forward by Peter Cook's Prime Minister in Whoops Apocalypse: https://youtu.be/NBHHFnUqo5o?t=119 https://youtu.be/NBHHFnUqo5o?t=119 (You can wind back to the start to see the underlying cause of unemployment as well)

fumblebee 5y ago

Non-paywall link: https://outline.com/F43cPG https://outline.com/F43cPG

version_five 5y ago

Most people work but most dont necessarily have to, at least as much as we do. People enter the "rat race" because it gives them something, not just a source of money but other achievement and identity stuff. I think a lot of those incentives are changing. My take on work is that it's getting more exploitive, more administrative, less fun and less satisfying. Between politics and policies and management, work is asking much more, not physically but in terms of behaviors and beliefs. It's a new kind of exploitation we haven't really faced before. And it's my theory anyway that a lot of people have had enough. A simpler way to say it is that more people would rather exist outside society, in a sense, and do their own thing, than put up with all the BS that comes with working for someone else. Even if the pay is worse. I bet most Uber Eats drivers make less than fast food employees, but I also bet they have less non work corporate BS to deal with, and outside whatever algorithmic unfairness can work as they want. In corporate jobs, the situation is magnified because the requirements of conformity are much greater, but so generally are the options.

analog31 5y ago
>>>> Most people work but most dont necessarily have to, at least as much as we do. I work as much as I do because I don't know what's going to happen next. Someone in my family could get sick. The economy could go into the crapper. I could live longer than normal (my parents are 90). Probably the worst corporate BS I could imagine would be commuting an hour or more, and I'm lucky that my commute is less than 1/2 hour by bike.
Swizec 5y ago
> It's a new kind of exploitation we haven't really faced before. I think the industrial world would love to disagree. Working at a factory my grandma would have carefully regulated break times, food times, etc. All controlled by a central clock for everyone on shift. It makes sense when you consider factory line workers as part of the machine, but it's also kinda bullshit from a human perspective. And that was after the big wins of the labor movement in the early 1900's. Imagine how bad it was in the late 1800's. The new innovation our generation introduced is that because everyone is supposed to be following their dream and passion, you not only have to be a good worker, you also have to love it. If you don't, you are expected to perform the part of someone who does.

tuatoru 5y ago

From the article:- > Your correspondent recently suffered the indignity of having to board a red-eye from JFK airport entirely sober because all the airport bars were still shut. What a Karen. TFA is the usual superficial Economist tripe - there's no analysis there.

dang 5y ago
Ok, but please don't post unsubstantive comments to Hacker News. In particular, please don't copy the most objectionable thing in an article and then paste it here to indignantly object to it. That's a trope of shallow discussion. We're hoping for something more interesting here. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- tuatoru 5y ago
  I apologise. Here's the expanded version. The writer was asserting that employment in service industries hasn't returned to pre-Covid levels because people don't want to work, but immediately goes on to describe seeing several closed places of business in that sector. That seems schizophrenic (in the dictionary definition), and makes it seem like he has done no real research. Casually boasting about air travel, one of the main carbon emission sources, during the pandemic and in the context of the global warming caused floods and wildfires in Europe, makes the writer seem entitled and tone-deaf. Complaining, even jokingly, about service not being normal in a pandemic just makes that worse.
version_five 5y ago
Really? I thought that was one of the best parts of the article. Nothing wrong with slipping a joke in, it doesn't have to be all serious. That's one of the things I appreciate about the economist

sp332 5y ago

If the USA were really worried about unfilled job openings, they would downsize the TSA and other fluff "job creation" programs.

jdavis703 5y ago
Do we really want a bunch of armed people flying on planes? There seems to be enough assaults on flight crew as it stands today. Do we really want to add firearms and other weapons to the mix?
- sp332 5y ago
  We were doing just fine keeping guns off of planes without the TSA. That's why the 9/11 hijackers had to use mace and small knives. ETA: I base most of my thinking on this on Bruce Schneier's points, so I'm just going to link his blog here. https://www.schneier.com/tag/air-travel/page/8/ https://www.schneier.com/tag/air-travel/page/8/ And a quote from an Atlantic interview: “Only two things have made flying safer: the reinforcement of cockpit doors, and the fact that passengers know now to resist hijackers.” This assumes, of course, that al-Qaeda will target airplanes for hijacking, or target aviation at all. “We defend against what the terrorists did last week,” Schneier said. He believes that the country would be just as safe as it is today if airport security were rolled back to pre-9/11 levels. “Spend the rest of your money on intelligence, investigations, and emergency response.”
  - EMM_386 5y ago
    The TSA also has to enforce things like liquid bans, and making sure there are no explosive assembly components built into the heel of your shoe and yes those are still important. A reinforced cockpit door is not going to help you when you sneak on individual components for plastic explosives and assemble them in the lavatory. https://en.wikipedia.org/wiki/Bojinka_plot https://en.wikipedia.org/wiki/Bojinka_plot
    - mikem170 5y ago
      Didn't they scan carry on bags before the TSA? It would be the same thing, just with the newer scanners.

gesticulator 5y ago

How many people are not working because they suddenly no longer have a reliable place for child care? Lots of jurisdiction's protocols will shut down day cares or in-person schooling for a week or more after a single case. In that environment, who are you going to get to take care of your child that may have been exposed?

sanxiyn 5y ago
I think this is a large part. Opening in-person school should be a priority.
- stocknoob 5y ago
  Turns out schooling is mostly about government-subsidized childcare after all.
  - deleted 5y ago
    [deleted]
  - snarf21 5y ago
    I disagree completely. If we were satisfied with a lower standard of living, one parent could stay home to take care of the kids. Keynes predicted 15 hour work weeks but he missed that we would increase our standard of living faster than the productivity gains.
    - tablespoon 5y ago
      > I disagree completely. If we were satisfied with a lower standard of living, one parent could stay home to take care of the kids. Keynes predicted 15 hour work weeks but he missed that we would increase our standard of living faster than the productivity gains. Is that productivity really needed/used for standard of living gains? Or do you need two incomes now because of a combination of capital taking bigger cut and dual-incomes bidding up the price of things. Also you have the phenomenon of companies trying to increase sales by reducing the service life of their products, which just increases churn without increasing living standards.

Mikeb85 5y ago

How can anyone say there's a worker deficit when we're so far below pre-pandemic employment? Maybe they should fix some of the issues preventing people from returning to work (childcare, pandemic restrictions) before complaining...

forz877 5y ago
Pandemic restrictions are pretty much nonexistent in large swaths of the US that have similar problems. There is certainly a worker deficit. Our society has moved up the stack and isn't bringing in enough cheap immigrant labor anymore to work the jobs even poor americans won't accept anymore.
- Supermancho 5y ago
  Example, in North Dakota where you can get a union Costco job for 18$+/hr (or chick fila for 17/hr) there are plenty of places (including hospitals) offering 15$/hr and they can't find people to fill the slots. Your dog grooming is paying 11$/hr? That's just another business going bust. Businesses who were on a shoestring fail and yuppies continue to move in. The regional+national inflation has simply left large chunks of business in the dust without very cheap (immigrant) labor. This causes the makeshift infrastructure to weaken and the communities start to come apart.
  - fosk 5y ago
    Wouldn’t this incentivize automation?
    - Supermancho 5y ago
      What does that even mean? How do you incentivize automation for things like surgical tool sterilization (the aforementioned 15$/hr) or pet grooming, for which there is no "automation". Especially when you're working with populations in the thousands or 10s of thousands (eg cities like Bismarck or Billings), who would invest in that? Amazon is dropping in distribution centers from time to time at 15$ an hour when a municipal area gets to be over 100k pop, but that's just one vendor and one vertical.

drocer88 5y ago

Just raise wages. We seem to always get this "worker shortage" marketing campaign every few years from our fat cat leaders. There is no shortage. If I want a wagyu steak but only want to spend $5.00, does that mean there's a food shortage? Labor, goods and services are all subject to supply and demand. Let it work itself out. No special government subsides for people whining about shortages. I want a trip on one of these orbital space ships. Is there a space ship shortage?

avmich 5y ago
I'd propose a somewhat opposite explanation: worker shortage is an illusion created by a sort of accounting which decided to keep positions open and not fill them, even when qualified candidates come. So, not only there is no space ship shortage :) there is actually much bigger worker shortage, as I keep a billion positions open (I want slaves, of all kinds, especially with Wall Street experience) and can't fill them (I don't bother to try).
- warkdarrior 5y ago
  What does it buy you, as employer, to whine about made-up worker shortages?
  - slim 5y ago
    Gov assistance
  - onion2k 5y ago
    You can tell your staff that you're trying to hire more people but it's hard, and if they can just put in the extra effort now it'll be easier in the future. Meanwhile, you get to save paying for an extra person and get more from your staff, so profits go up.
  - paxys 5y ago
    Employees have to temporarily take on extra work while managers promise that the open headcount for the senior dev who just left will be filled as quickly as possible. In fact, you should refer your friends! (who will all be promptly rejected)

taneq 5y ago

It's not a worker deficit, it's just the market finally catching up with the huge discrepancy between knowledge worker productivity (in real physical terms) and traditional knowledge worker pay levels. We've only had "knowledge workers" in the current high tech industrial sense for a couple of hundred years and our understanding of the value of one person's labour is still firmly based in the trades. It's still a relatively new idea that a single person working in the right way (eg. designing automated equipment) could produce hundreds or thousands of times as much as a person trying to directly produce the same thing. We've barely started to process the idea that a single person working in the right breakthrough technology could be almost infinitely productive.

adam_arthur 5y ago
It's definitely true that an individual can be many times more productive than another. However, the end state of software/SaaS is likely low margins, as regulations will be put into place to foster competition. SaaS has high margins due to the low marginal cost to produce additional units, which is close to free, in many cases. But it's also 0 marginal cost for any competitior. So in theory, in a perfectly competitive market, margins should be low, as two companies can produce roughly similar software. The problem comes in when you consider network effect and other factors that lead to a sort of natural Monopoly for a software company. Likely these factors will begin to get regulated over the coming years. For example, you could require that all SaaS companies provide an API that's sufficient to allow you to switch to a competitor at a click of a button. Circling back to your comment. My point is that pay in software is unlikely to remain abnormally high in the decades to come. Eventually supply of labor will increase, and business margins will decrease... Which effectively caps how much you can pay employees. Somewhat related; China has realized that fostering competition rather than allowing monopolies to form is likely to produce better long term outcomes for society... which is why they are enacting all of these new regulations. The logic makes sense, but it remains to be seen in the long run. I believe the US will follow, but it's a story that will take decades to play out fully.

Consultant32452 5y ago

There is no such thing as a worker deficit in a market economy. "The Economist" knows this. We have to stop engaging with anyone who speaks this way as legitimate actors. They only deserve scorn and mockery for their brazen dishonesty.

BLKNSLVR 5y ago
To clarify, putting my own words to what I think you're implying: The Economist is pushing the dishonest narrative that there's an employee shortage, when actually there's a glut of greedy "we don't want to pay higher wages" employers. The Economist is, therefore, enabling these greedy employers.
- ryandrake 5y ago
  It's like me complaining there is a shortage of new Porsches, when I'm only willing to pay $10K. Just can't find any, and I've called around every dealership. Must be a shortage.
- adam_arthur 5y ago
  Depending on independent actors in a free market system to act on specific moral principles rather than in their own best interest is not going to work in practice. You'll get some that adhere to those principles, and others that don't. If society deems minimum wage too low, government is the one responsible for regulating it to reflect those morals. Rather than see the employers as greedy, just accept that they'll most likely do whatever they can within the confines of the law to help themselves, and then change the law to shape the incentive. Anything else is just wishful thinking. Well intentioned, but not realistic to achieve the purported goal.
  - BLKNSLVR 5y ago
    Re-written as: >The Economist is, therefore, enabling employers to do whatever they can within the confines of the law to help themselves. Saying 'greedy' just saves 13 words. But I'm being flippant with what I consider to be an important topic. Let me be be positive, this: Depending on independent actors in a free market system to act on specific moral principles rather than in their own best interest is not going to work in practice. Feels like a variation of a "tragedy of the commons[0]" / "race to the bottom[1]" situation, which is where this: government is the one responsible for regulating it is exposed as the causal failure - in large part because, I think, the same people that influence the angle The Economist is taking are those who 'donate' to various members of government. The more I'm talking through this, the more I see the problem as voter apathy. If a member of government only gets feedback from industry lobbyists, that's all they'll be able to base their decisions on. Write your local members! Use your voice! Vote! (I'm saying this to myself as much as anyone else). Only politics can solve politics. [0]: https://en.wikipedia.org/wiki/Tragedy_of_the_commons https://en.wikipedia.org/wiki/Tragedy_of_the_commons [1]: https://en.wikipedia.org/wiki/Race_to_the_bottom https://en.wikipedia.org/wiki/Race_to_the_bottom

ihsw 5y ago

> It will depend on whether the people who have left the workforce can be lured back Incorrect. It will depend on how long lockdowns last.

guyzero 5y ago

So this is 95% just employers being unwilling to raise wages which will fix most shortages pretty quickly. In the longer term there may indeed be worker shortages as more countries face a demographic shift towards older people. In pretty much every developed economy the % of the population that's retired grows every year. Japan is now over 28% 65+, the US is 16% and growing, even China is facing the same issue. Long-term it's a smaller portion of the population supporting the economy. I'm sure it will stop at some point, but it isn't for now.

randomdata 5y ago
A shortage occurs when price cannot rise. When the answer is “just pay more”, the question is not about shortage, only unfulfilled dreams.
- runeks 5y ago
  > A shortage occurs when price cannot rise. Do you have an example of this?
  - saberdancer 5y ago
    Anywhere where the product can be imported from abroad. If you can buy product A from Mexico for 10 USD, but can't get workers to produce the same product for 10 USD in USA, you cannot realistically increase the price.
    - randomdata 5y ago
      In that case the price could rise, but does not need to as the market is sufficiently supplied at a lower price point. A shortage occurs when buyers want to pay more, and need to pay more for the market to clear, but cannot do so for some reason (the law, for example). A decent indicator of there being a shortage is if the recipient of a product or service is determined by a non-price based mechanism, such as a lottery or a needs-based determination, as the usual 'highest bidder wins' method is not possible.
  - 5y ago

Rd6n6 5y ago

A 1 bedroom place where I live costs $1400-1600 (it’s an unusually expensive tourist town) and things are closing down once in a while because of worker shortages (Eg, lifeguard shortage was the most recent I saw). Where are these workers supposed to live? I know other places aren’t nearly this bad. I just can’t believe anyone is able to work in retail or food here

XorNot 5y ago
This is hitting the nail dead center: the mock surprise at worker shortages is missing the fact that every metric pointed to this happening pre-COVID as well - the US a whole was in a march towards pricing all it's workers out of their homes at their current wages. COVID has just accelerated the trend.
- vvarren 5y ago
  Ding ding ding, we have the answer. I was in Lake Tahoe recently and my relatives there were saying how I should move there because there’s so many well paying jobs available… but the cheapest rent was like 1600!! This used to be an issue only in tourist towns but now that houses are priced based on how much they can make on Airbnb, versus the traditional model of how much a worker in the area could afford over 30 years, we’re absolutely screwed. Legislation needs to start with vacation rentals.
  - DaiPlusPlus 5y ago
    > there’s so many well paying jobs > “jobs” Employment, and employees, are not fungible - why do people (and more importantly: the news-media and the people elected to direct the economy) continue to speak of it as though it is?
    - el_dev_hell 5y ago
      > Employment, and employees, are not fungible - why do people (and more importantly: the news-media and the people elected to direct the economy) continue to speak of it as though it is? I've seen this mentioned a few times on HN. I find it a confusing concept. My position is 100% fungible. I write code to solve problems. There are thousands of people that can write equivalent code to solve the same problems. I'm legitimately interested: can you expand on how my position isn't fungible?

atlgator 5y ago

Related Q: The coverage I've seen talks about the worker shortage mostly in the minimum wage / lower income jobs. How is the tech sector doing? Are companies perceiving a shortage in tech workers due to changing attitudes around remote work and moving out to suburban or rural areas?

chupchap 5y ago
There's a hiring spree in Indian tech sector as of now, but that is mostly about folks changing companies at a rapid pace more than anything else. It didn't help that a lot of companies did not hire last year and all the open job positions had to be filled in this year. Companies being what they are, only wanted people with experience, bumping up the pay scale significantly.

kaminar 5y ago

Subtler is true...constant changes to the employee handbook...leaders being told in conference that their behavior outside reflects on the company, and to actively report those employees who are seen acting irresponsibly. The social media stigma is also well known and reviled. "We are watching" is the new normal.

dcow 5y ago

I know of one very real case pretty close to home where a group of “enterprising” fellas are fraudulently using the no questions asked forgivable payroll loans to line their pockets. They literally don’t need to work when we’re just handing out relief money and looking the other way. Would they be in trouble if they ever got audited? Likely. Will they ever get audited? Doubtful. One of the guys works with a friend who is still hard at work because he’s honest. It’s pretty discouraging.

mlac 5y ago
Anonymously report them?
- dehrmann 5y ago
  IANAL, but no one likes a tattle.
  - yadaeno 5y ago
    I dont like having my tax money stolen.
    - dehrmann 5y ago
      It's not being stolen as much as its a rational response to poor public policy, so it needs to be addressed at the policy level.

1propionyl 5y ago

There is no worker deficit. The demand-side of the labor market simply isn't willing to pay what the supply-side expects, and is childishly throwing a tantrum that for once they have to compromise to market forces. The so called "worker deficit" only exists below ~15-20/h. Above that there's no issue whatsoever. It's a seller's market. Suck it up.

adam_arthur 5y ago
So why is it a seller's market? What are the market forces that led to this, when there wasn't a worker shortage just a little over a year ago?
- 1propionyl 5y ago
  There was never a worker shortage. What there has been is a re-evaluation by workers of the value of their own work. Even without Covid this would have happened as low-income workers in many areas were either rapidly approaching being unequivocally priced out of living anywhere remotely near their work, or already were. Covid just forced the issue sooner and faster, rather than letting it fester. Why would anyone continue working for subsistence wages that can't even pay rent where they live and work? Their only sensible options are demanding more pay or leaving. In major cities, with current rents, it simply isn't feasible to pay janitors, garbage collectors, fast-food workers, restaurant employees, etc as little as they've been paid, for the very simple reason that they can't afford to live there on those wages. Unless we're willing to give up sanitation, garbage collection, fast food, and cheap restaurants in those cities, there is no reasonable solution except increasing wages. (There are of course unreasonable solutions such as exploiting immigrants, wage theft, and prison labor).
  - loosescrews 5y ago
    > What there has been is a re-evaluation by workers of the value of their own work. I think a component of this is hazard pay. The pandemic has made a lot of these low pay jobs more dangerous. If everything else is the same, but the job is now more dangerous, fewer people will take the employment.

fulafel 5y ago

> Compare America and the EU. In the spring of 2020 aggregate working hours in both economies tanked. America then passed gargantuan stimulus packages, while European governments chose more modest measures. The recovery in working hours since then has been only marginally better in America—not much extra labour for a lot of extra cash. Does this take the difference in automatic stabilizers into account? There was probably quite a lot of extra cash injected from the stronger social net in the EU. Eg https://www.nber.org/papers/w16275 https://www.nber.org/papers/w16275 says "In the case of an unemployment shock 47 percent of the shock are absorbed in the EU, compared to 34 per cent in the US."

apples_oranges 5y ago

If we have dealt with all but the highest levels in the hierarchy of needs (according to Maslow) we turn to the top, self-actualisation. No wonder people in the west start questioning their jobs and careers.

thejackgoode 5y ago

With all the valid arguments about pay here, subject seems a bit stretched: I'd expect more than 3% lower employment, given the traveling restrictions alone. Not taking into account business closures, shift to online work, overall health impact of the pandemic etc.

tompccs 5y ago

Classic Economist to miss the story behind the story: "The working-age employment rate (the share of 16- to 64-year-olds in a job) was at an all-time high in over half of rich countries." Yes, because about half the population - women - who previously weren't counted as part of the "work force" are now counted. However, looking at males alone, they have been dropping out of the workforce at an alarming rate: https://www.statista.com/statistics/191725/us-male-civilian-labor-force-participation-rate-since-1990/#:~:text=This%20graph%20shows%20the%20male,participated%20in%20the%20job%20market https://www.statista.com/statistics/191725/us-male-civilian-.... The Pandemic seems to be an acceleration of the latter trend, and perhaps a partial reversal of the former, with more women deciding to exit the workforce either temporarily or permanently.

swiley 5y ago

No. It's the result of massive inflation but the information exchange is still ongoing, at some point the market will correct and things will get very ugly.

jokethrowaway 5y ago

The economy has been forcefully closed. We're in our second year (the longest "14 days to flatten the curve" ever) of people being locked down in their homes. Two natural assumptions are that there is less demand for economic activity and that people are depressed / have less mental bandwidth for work. Without being able to do most of the fun stuff in life thanks to our authoritarian governments, I burnt out at my job, quit and dedicated solely to running my side business. I make way less money than before but it's not something I could mentally handle anymore.

Proven 5y ago

Idiots. There's no deficit, labor participation is pathetic and socialism and central banks are to blame.

cies 5y ago

> Will the rich world’s worker deficit last? Since a market is about supply and demand finding each other at a price point, and supply may well grow if the price is raised, can we not rephrase this as: "When will the underpayment of workers in the rich world end?"

echopurity 5y ago

>employment in the rich world is 3% below its pre-pandemic high (see chart 1). That points to a deficit of about 18m people—a huge waste of talent, not to mention a hit to tax revenues. It's telling how The Economist views lost taxes and lost "talent" as the worst effects of unemployment, rather than homelessness or hunger for example. And apparently people using their talents for personal enjoyment is outside of The Economist's models. No surprise there.

kazinator 5y ago

> It will depend on whether the people who have left the workforce can be lured back That's the short term view. The long term view: are those societies having enough children?