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Can the West’s perplexing employment miracle continue?

economist.com

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Re: Can the West’s perplexing employment miracle continue?

#61

Post by ajross »

ivalm wrote: post #43
ajross wrote: post #24

Earlier quoted context omitted.

> We know inflation should start decreasing within a year or so, but you cannot predict how millions of people will react to suddenly not being able to afford stuff. If people in aggregate are suddenly unable to "afford" things, then you're not talking about inflation. People (again, in aggregate) have more money (not wealth) than they did a few years ago, which is what "inflation" means. On average, it's a rescaling…

It’s not just rescaling, overall production is not constant and is dependent on interest rates/economic activity/etc. eg after COVID there was all kinds of weird price dynamics due to supply/demand mismatches.

Again, that's wrong. Inflation is by definition the scale-dependent part of price changes. You're right that prices can go up because of a reduction in supply too, but that's measures as part of numbers like GDP; which, importantly, are routinely expressed using inflation-adjusted numbers to avoid precisely the conflation you and the grandparent are making.

So, sure, if you want to rephrase and lament that people are unable to afford stuff because of the recent drop in supply (or increase in demand) for the products they want, that would be logically consistent. But it would be factually wrong, as in fact in aggregate[1] world GDP is doing pretty well right now.

[1] As above, specific products and markets are always moving. Something is always more expensive than it should be and there's always a glut in something else. People were complaining about eggs last week, IIRC.

Re: Can the West’s perplexing employment miracle continue?

#62

Post by roflyear »

almog wrote: post #50
roflyear wrote: post #38

Earlier quoted context omitted.

seems the consensus is "a little more inflation" is better than "a bigger recession" which is probably true. People are still trying to get on their feet, and inflation is "felt" a lot less than losing your job (and not being able to find a new one for a long time).

Claiming that "a little more inflation" is preferred to "a bigger recession" is an opinion, I'm really not sure it's a consensus, though even if it is a consensus, it's not a good argument for or against it. I think it comes down to whether we soon realize we're near hard landing (recession) or no landing (ongoing inflation). As far as I know (though I'm really not well educated when it comes to economy), in the enti…

Well yes, but like I said, it seems like most people feel this is the good approach in my experience. I dunno if it is a good thing or not...

Re: Can the West’s perplexing employment miracle continue?

#63

Post by creato »

jongjong wrote: post #48

My theory is that bullshit jobs are one of the mechanisms by which large corporations maintain a protective anti-competitive moat around their businesses; instead of letting unused labor roam freely in the markets to potentially compete against their interests, corporations provide as many jobs as required in order to keep as many people's time fully occupied in order to minimize the number of people who can compete…

I can't believe this theory is so widespread. There's no high level conspiracy to hire people to keep them away from competitors, such a thing could not be kept secret, and it's a ridiculously expensive thing to do (even for a FAANG) for extremely dubious value that might be realized a decade down the road and no real way to know if it's working.

Bullshit jobs exist because mid level managers are very averse to killing projects or firing low performers, because that would shrink their fiefdom. That basically only ever happens when there is extreme pressure (e.g. layoffs).

Layoffs happen in clusters because even a few layoffs greatly increase the leverage employers have, and as soon as they have a little leverage, a layoff looks better than it would otherwise, so it's a positive feedback loop.

This is a much, much simpler and realistic explanation than "a grand conspiracy of media monopolies and regulatory capture is cheaper than hungry hungry hippoing all the engineers".

Re: Can the West’s perplexing employment miracle continue?

#64

Post by jongjong »

creato wrote: post #63
jongjong wrote: post #48

My theory is that bullshit jobs are one of the mechanisms by which large corporations maintain a protective anti-competitive moat around their businesses; instead of letting unused labor roam freely in the markets to potentially compete against their interests, corporations provide as many jobs as required in order to keep as many people's time fully occupied in order to minimize the number of people who can compete…

I can't believe this theory is so widespread. There's no high level conspiracy to hire people to keep them away from competitors, such a thing could not be kept secret, and it's a ridiculously expensive thing to do (even for a FAANG) for extremely dubious value that might be realized a decade down the road and no real way to know if it's working. Bullshit jobs exist because mid level managers are very averse to killi…

I don't think it requires explicit conspiring. I don't think the corporate executives who make decisions are necessarily aware of this effect. For the most part, it's probably a case of "this strategy seems to have been working so far, or at least it's not a problem, so let's keep doing it... And the people over at McKinsey insist this is the right way."

Re: Can the West’s perplexing employment miracle continue?

#65

Post by vuln »

Gibbon1 wrote: post #40
lr4444lr wrote: post #8

Isn't this the long arc of the sub replacement birthrates?

Also immigration is slowing and we're about to see the decline in births after the 2008 recession show up four years from now.

Immigration is not slowing it could be peaking but we're seeing double even triple the number of monthly encounters at the southern border alone.

https://www.cbp.gov/newsroom/stats/southwest-land-border-enc...

Re: Can the West’s perplexing employment miracle continue?

#66

Post by jameshart »

yasp wrote: post #7
jameshart wrote: post #5

Earlier quoted context omitted.

Ask whom? The missing 10m? Might be hard. What with them being ‘missing’.

Ostensibly they are missing from the labor force, not from the planet.

So the trouble is, there's a lot more than 10m people outside the labor force of the relevant countries - that's true even if you only consider people who are actually in those countries, let alone the people who live in other countries who have not migrated there. The trick is figuring out which 10 million of those people are the ones who would have been participating in that labor force.

Re: Can the West’s perplexing employment miracle continue?

#67

Post by marcosdumay »

flkiwi wrote: post #37
bluGill wrote: post #20

Earlier quoted context omitted.

This isn't a high interest rate ecconomy, this is normal interest rates. Rates have been absurdily low for a while so you may not remember it, but history provides a record.

Historians in 500 years will stare in wonder at the stunning evidence we did not, in fact, build ALL the infrastructure, physical and otherwise, during the last ~25 years of absurdly cheap money.

Well, maybe in 500 years people will have an explanation for why people don't create fundamental things in low-interest times. Lasting investment seems to be very strongly and positively correlated with rates.

Re: Can the West’s perplexing employment miracle continue?

#68

Post by pclmulqdq »

marcosdumay wrote: post #67
flkiwi wrote: post #37

Earlier quoted context omitted.

Historians in 500 years will stare in wonder at the stunning evidence we did not, in fact, build ALL the infrastructure, physical and otherwise, during the last ~25 years of absurdly cheap money.

Well, maybe in 500 years people will have an explanation for why people don't create fundamental things in low-interest times. Lasting investment seems to be very strongly and positively correlated with rates.

Here's a theory for you: the increased cost of capital doesn't cause people to stop seeking or loaning out capital, it just directs that capital toward shorter-term projects. A bridge or a skyscraper pays off a lot faster than a startup.

Re: Can the West’s perplexing employment miracle continue?

#69

Post by ceejayoz »

b33j0r wrote: post #58
roflyear wrote: post #38

Earlier quoted context omitted.

seems the consensus is "a little more inflation" is better than "a bigger recession" which is probably true. People are still trying to get on their feet, and inflation is "felt" a lot less than losing your job (and not being able to find a new one for a long time).

This conversation needs someone fiddling in the background. No one had a normal economic life for several years. It’s a miracle that these levers have been adjusted to the point that everyone is like “well no one going to work for three years had no impact! What over-reactionaries!”

> no one going to work for three years

Where did this happen?

Re: Can the West’s perplexing employment miracle continue?

#70

Post by marcosdumay »

ajross wrote: post #61
ivalm wrote: post #43

Earlier quoted context omitted.

It’s not just rescaling, overall production is not constant and is dependent on interest rates/economic activity/etc. eg after COVID there was all kinds of weird price dynamics due to supply/demand mismatches.

Again, that's wrong. Inflation is by definition the scale-dependent part of price changes. You're right that prices can go up because of a reduction in supply too, but that's measures as part of numbers like GDP; which, importantly, are routinely expressed using inflation-adjusted numbers to avoid precisely the conflation you and the grandparent are making. So, sure, if you want to rephrase and lament that people are…

Well, monetary changes maintain the mean purchase power. But people being able to buy necessities is more about median purchase power, or really the details of its distribution.

The mean purchase power has a very small impact on society.

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