Discover more from Hopium Chronicles By Simon Rosenberg
The Economy Is In The Midst of Something Wonderful (and Unexpected) - The Washington Post
A must read on the US economy from the Washington Post editorial board
Happy Saturday all! Don’t always post on the weekends, but have three things I thought worth sending along:
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A New, Wonderful Editorial from the Washington Post - Building on my post yesterday about how strong the American economy is right now, this morning the Washington Post dropped a great new editorial, The economy is in the midst of something wonderful (an unexpected). An excerpt:
The U.S. economy is in the midst of a wonderful — and unexpected — workforce boom. More than 3.1 million workers joined the labor force in the past year, meaning these people started looking for jobs and, largely, are getting hired. Almost no one expected this. It’s a nearly 2 percent expansion of the labor force — something that has not occurred since the tech craze of July 1999 to July 2000 and was more common in the 1970s and 1980s.
Last year, many experts predicted a recession with soaring layoffs. They argued the only way to get inflation down was massive job loss. Instead, the country is experiencing what some economists are calling “immaculate disinflation,” in which inflation has cooled substantially while companies keep hiring. A key reason this is possible is the remarkable growth in the number of job seekers. More job hunters have helped to gradually bring down wage growth as companies aren’t quite as desperate for employees as they were last summer. And as people get hired, their earnings rise and they consume more.
Women are driving this labor force boom. With rising pay and more flexibility to work from home or adjust their hours, they are surging into the workforce. Labor force participation for women ages 25 to 54 hit an all-time high this summer, far surpassing pre-pandemic levels. There are especially strong gains for mothers of young children. The sectors on hiring sprees lately — health care, social assistance and government — are also ones where women have historically found the most opportunities. The result is women now make up half of all U.S. employees. That milestone was reached only twice before in modern U.S. history: just before the pandemic, and in 2009 after the Great Recession destroyed so many “muscle jobs.”
It’s clear that Americans still want to work, contrary to narratives that took root in recent years. There’s also an important message here for employers: Workers are a lot more eager to join companies that pay more and provide some flexibility.
This post-pandemic readjustment of the labor force could also spur a productivity boom. Data released this week showed a sizable jump in output per hour during the second quarter. There has been a mass migration away from low-skilled, low-paying jobs into higher-skilled, higher-paying jobs. Workers also say they are the happiest they have been in decades as they are in jobs that better suit their interests and lifestyles.
While much of this good news is the result of a tight labor market and an economy normalizing from the pandemic, the large government stimulus also played a role. We were among the skeptics who believed President Biden’s $1.5 trillion American Rescue Plan was too big. And it did contribute to high inflation. But there’s a case to be made that the government spending is helping sustain the job market — and propel growth — now. State and local government hiring has rebounded significantly, and there has been surprising strength in construction (which added close to 200,000 jobs over the past year) thanks to investments in infrastructure and manufacturing. Mr. Biden’s push to increase legal immigration as much as possible has also helped. If Congress would finally act on a comprehensive immigration plan, the benefits could be even larger.
CNBC Reports “The iconic American hard hat job that has the highest level of open positions ever recorded.” An excerpt:
The construction industry in America is facing an extreme labor shortage, roughly 650,000 workers, slowing completion of construction projects from residential homes to infrastructure to hospitals.
The solution, according to experts, is a balance between immigration policy, greater use of technology, and efforts to raise the profile of construction as a career path.
Loud and proud everyone. Joe Biden is a good President. The country is better off. The Democratic Party is strong. Loud and proud! - Simon