{"id":11663,"date":"2023-05-04T08:00:32","date_gmt":"2023-05-04T12:00:32","guid":{"rendered":"https:\/\/americancompass.org\/?p=11663"},"modified":"2024-01-24T07:07:23","modified_gmt":"2024-01-24T12:07:23","slug":"a-guide-to-labor-supply","status":"publish","type":"post","link":"https:\/\/americancompass.org\/a-guide-to-labor-supply\/","title":{"rendered":"A Guide to Labor Supply"},"content":{"rendered":"\n

Any discussion of the labor market\u2019s condition, challenges, and opportunities should begin with a review of the basic data. So many think pieces and cocktail conversations depend upon smart-sounding formulations like \u201cThe Big Quit\u201d and \u201cSecular Stagnation\u201d and \u201cThe Rise of the Robots\u201d that even quite sophisticated analysts begin to assume some evidence must underlie the painfully self-contradictory pontification. As we all know, so many workers are abandoning the labor force that employers cannot find the needed labor. Also, automation has rendered workers superfluous so quickly that employers have no need for them. And didn\u2019t you know that wages have stagnated because productivity stopped rising? Do try the tuna tartar.<\/p>\n\n\n\n

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RETURN TO ONE SIMPLE TRICK FOR RAISING WAGES<\/a><\/div>\n<\/div>\n\n\n\n

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The data tell a much less interesting story, though fascinating in its own right: None of these narratives is true.<\/p>\n\n\n\n

Part I: The Post-COVID Labor Market<\/h2>\n\n\n\n

The COVID-19 pandemic, and the response by governments, caused huge disruptions in the American economy. Millions of workers temporarily exited the labor market, and many were slow to return. In parallel, inflation surged to levels not seen in decades, and economists and employers began warning that a \u201clabor shortage\u201d was both fueling this inflation and threatening the economy\u2019s longer-term prospects.<\/p>\n\n\n\n

Clearly, the days of shutdowns and quarantines wreaked all manner of havoc, but whatever trends seemed to be emerging have since faded away. The trend that has persisted is one of wages declining in real terms.<\/p>\n\n\n\r\n

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