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We Are Rethinking Our Relationship
Markets change and people do too!
I love teaching macroeconomics! Not really sure how and when that happened since I am an applied micro-economist. My research examines individual decision making around household finances. My first research love was mortgage markets, probably influenced by my work in the mortgage industry during the housing boom (2003-2006).
I have been teaching principles of macroeconomics since 2007. Every year, I fall more in love with teaching it. This year has been exceptionally exciting. There is so much going on as we “recover” from the pandemic recession. Staying on top of the economic changes can be challenging.
If you are looking for a trusted source for macroeconomic news, and the Fed specifically, check out Claudia Sahm’s newsletter and Twitter. As you saw from my post a couple of weeks ago, there is a lot of misinformation out there and trusted economic sources are important.
Lately, I have been fielding a lot of questions from the public through Twitter and Instagram DMs about the labor market shortages. I love getting your questions, so keep them coming. It helps me understand what topics interest you and what topics to write about.
You can also learn a lot about public sentiment by how they frame their questions. I have received questions asking and I quote:
Have stimulus checks made people “lazy”?
Why don’t employers just pay higher wages?
Do people not want to work any more?
Will the U.S. economic system collapse because no one wants to work anymore?
Are We Rethinking Our Relationship with Work?
Access the graph https://fred.stlouisfed.org/series/JTSQUR
In short, Americans are quitting their jobs at a higher rate than ever before. They are often leaving their jobs without another one lined up. This has been received less favorably by the public and, specifically, by employers as they try creative ways to attract employees.
Jadrian Wooten has a good post on Framing the Great Resignation. I recommend you subscribe to his Substack for more economic content.
I am not sure if increased pay or improved work environment is going to change the labor shortage. Americans, and the world in general, are rethinking what work means to them. From my perspective, the Anti-work movement is really just a “What do I want to do with my life” movement.
Americans, and the world in general, are rethinking what work means to them.
The pandemic has shook us in many ways, and it has allowed us the opportunity to reevaluate how we want to earn our income, and also rethink the labor-leisure tradeoff. I think this trend was already happening but Covid expedited the process. I read somewhere that Covid caused markets to jump 5 years forward on their pre-Covid trends. If this is true, maybe labor force participation rates were heading to 61.6% anyway?
Access the graph https://fred.stlouisfed.org/series/CIVPART
Our changing relationship with work is going to impact the overall economy. While most people have a dismal view about the possible outcomes, I am not as pessimistic. I think we will face some pains in the short-run with a mismatch of expectations in the labor market. In the long-run, it is not as clear what will happen. Call me naive, I think most people want to work, and they want to do work that they love and are passionate about. Given the option, they don’t want to work just to pay the bills. When people do jobs they love they are more likely to innovate and experience increased productivity.
I think most people want to work, and they want to do work that they love and are passionate about.
We are experiencing a structural change in the labor market, and I love it! It will take sometime for hiring managers and employers to adjust to this change. Society will be split by how we define work. Some will think it is entitlement to want a job that you love, while others will avoid jobs that do not give them a sense of purpose.
Have you started to rethink what work means to you?
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