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- Scoop Market Mysteries 10-23-22 (Labor Movement)
Scoop Market Mysteries 10-23-22 (Labor Movement)
🔎 Market Mysteries: Will a recession kill the labor movement?
Market Mysteries of the week
Will a recession kill the labor rights movement?
Answer:
Stagnant wages, increased health risks, and rising living costs have given way to an explosion of labor strikes and unionization across the country.
As the economy slows and companies demand fewer workers, labor may lose some of its bargaining power.
What's happening in the labor market?
, but there aren't enough people in the workforce to serve businesses' needs. This has led many to say
there is a labor shortage
. Because of that, policymakers are trying to slow down the economy and businesses' labor needs.
The
unemployment and labor force participation rates are the two most important terms
to understand how policymakers monitor the jobs market. The labor force is everyone who is defined as employed or unemployed. The participation rate is that number divided by the whole working-age population.
Notably,
the government only defines those who have actively looked for a job in the past four weeks as unemployed.
The unemployment rate does not track those who have stopped looking for a job, like discouraged workers or someone who stopped working to care for their children or elderly parents. So while a declining unemployment rate sounds good,
a declining participation rate might indicate structural problems keeping people from working.
Is there a labor shortage?
Economics can often dehumanize problems, but
there is more demand for workers than supply.
Calling it a labor shortage puts the onus on the number of working-age Americans to keep up with endless corporate growth. Corporations are starting to face the limitations of perpetual consumption of earth's finite resources, humans being one of them.
More people are working in the US today than before the pandemic,
but there are nearly
. There are almost
. So the demand has rapidly exceeded the available labor.
Economists think the unemployment rate is about as low as it can go right now.
There will never be a zero-percent unemployment rate because people are naturally constantly changing jobs. However, many point to the decreased rate of labor force participation as an untapped supply of working-age Americans who could be working.
Why are fewer working-age people working?
The pandemic brought on a lot of changes in workforce participation.
With more kids home from school, an aging parents generation, and more frequent illness, many families went from
so that one parent could manage
increased caregiving needs
. Women have left the workforce at
to focus on child caregiving.
Working through covid has shifted the culture of health.
People are now
, including mental health, and refuse to work in conditions that put their physical, mental, or emotional health at risk. Many are struggling to find jobs that can accommodate their health limitations. The estimates of the number of Americans held out of the workforce due to long covid symptoms range
.
The pandemic also pushed many into early retirement,
as many as
Many had built up financial cushions during lockdowns.
have limited our ability to offset the labor losses of an aging population.
What does a worker shortage mean for wages?
It should mean workers get paid more.
Since corporations can't solve the participation problem, they have to battle over the available pool of workers, raising wages to gain an advantage. Salaries have grown in the past year,
but the buying power of our wages has decreased more quickly.
That means our
in the past twelve months.
in America, while
.
This past year,
workers have seized the opportunity to demand higher wages and better working conditions
, leading to more protests and unionization. Support for unions is
.
Employees have voted to unionization for the first time ever
at huge employers like
,
,
, and even
. Labor strikes have grown common, stalling
,
,
, and even
Many employers have been accused of trying to suppress unionization e
fforts through
such as
and offering attractive
s. Large employers realize the enormous threat that employee unionization has to profit.
What happens in a recession?
A recession is not good for workers.
, the Federal Reserve controls our money system and economic policy. Policymakers are tasked with keeping inflation and unemployment low - in that order. If they're worried about persistent inflation,
they're willing to sacrifice employment to keep prices from rising too quickly for too long.
The Federal Reserve is actively
trying to bring the demand for labor more in line with the supply
by cooling off the economy. That means making it harder to do business and slowing spending, so companies reduce their job openings.
Policymakers will keep restricting the economy until unemployment starts to increase.
As demand for workers decreases, employees have less leverage to push for higher wages and better benefits.
The wage gains we've seen so far might slow even more.
Does your company pay a living wage?
âš¡The Share Scoops Team
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