Has the economy changed

Marvin the Martian

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Indiana is ending all the extras put in place to help unemployed people around COVID. That's fine, I might quibble a bit about people who have had organ transplants and the like because it isn't safe for them to be in general public with COVID loose, but that's a smaller group. For most people, jobs can be had.

But that raises another question, has something changed. Here is a quote from an article from Indianapolis WXIN Fox 59 from a couple weeks ago:

As of the end of April, in Northeast Indiana there are 12,000 open jobs and only 3400 people collecting unemployment. Indiana’s current unemployment rate is 3.9%, which is near pre-pandemic levels. In April 2020, it peaked at 16.9%​
I'll link the article below. We seem to have far more open jobs than people unemployed. Even if those 3400 all went to work, NE Indiana is well short of people.

So that makes me wonder why. Did a lot of people just give up and retire during COVID. I know 3 people laid off in 2008 who were in their low 60s and decided to just retire and call it a day. Has that happened?

I also wonder, has the gig economy taken a lot of workers during COVID and they aren't interested in going back to traditional jobs. I would think sooner or later food delivery will drop dramatically and some might have to. But especially among younger workers the whole gig idea might beat out the more traditional jobs.

Any other thoughts as to why jobs seems to outpace the combined number of workers and unemployed?

 

IUCrazy2

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Indiana is ending all the extras put in place to help unemployed people around COVID. That's fine, I might quibble a bit about people who have had organ transplants and the like because it isn't safe for them to be in general public with COVID loose, but that's a smaller group. For most people, jobs can be had.

But that raises another question, has something changed. Here is a quote from an article from Indianapolis WXIN Fox 59 from a couple weeks ago:

As of the end of April, in Northeast Indiana there are 12,000 open jobs and only 3400 people collecting unemployment. Indiana’s current unemployment rate is 3.9%, which is near pre-pandemic levels. In April 2020, it peaked at 16.9%​
I'll link the article below. We seem to have far more open jobs than people unemployed. Even if those 3400 all went to work, NE Indiana is well short of people.

So that makes me wonder why. Did a lot of people just give up and retire during COVID. I know 3 people laid off in 2008 who were in their low 60s and decided to just retire and call it a day. Has that happened?

I also wonder, has the gig economy taken a lot of workers during COVID and they aren't interested in going back to traditional jobs. I would think sooner or later food delivery will drop dramatically and some might have to. But especially among younger workers the whole gig idea might beat out the more traditional jobs.

Any other thoughts as to why jobs seems to outpace the combined number of workers and unemployed?

Is that U3 or U6 unemployment rate? The most recent U6 rate I saw was for March and was still over 11%. The U6 includes people who are only marginally employed (maybe gig workers like you indicated) and I think that is where the labor force probably ended up. Some early retire, some collecting the roughly $15.20/hr unemployment benefits, some maybe working a job with less hours and subsidizing lost wages with government benefits....

I don't think the U3 is really the best measure of what is really happening but it is usually a much more politically favorable statistic, so it is what gets reported.
 

Marvin the Martian

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Is that U3 or U6 unemployment rate? The most recent U6 rate I saw was for March and was still over 11%. The U6 includes people who are only marginally employed (maybe gig workers like you indicated) and I think that is where the labor force probably ended up. Some early retire, some collecting the roughly $15.20/hr unemployment benefits, some maybe working a job with less hours and subsidizing lost wages with government benefits....

I don't think the U3 is really the best measure of what is really happening but it is usually a much more politically favorable statistic, so it is what gets reported.
Since the gest of the story is on the unemployment benefits I would assume U3. U6 would not cover that.

Aren't people happy that not many in NE Indiana are refusing to work just to collect unemployment? If my gig job theory is true, they are working.
 

twenty02

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The labor participation rate has been dropping for 20+ years now. It took a true nose dive last year.

labor-force-participation-rate.png




Mainly the drop had been (pre-covid) from prime working age men that have fallen out...

 
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Marvin the Martian

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The labor participation rate has been dropping for 20+ years now. It took a true nose dive last year.

labor-force-participation-rate.png




Mainly the drop had been (pre-covid) from prime working age men that have fallen out...

Useful information, thanks for sharing. I like the suggestions at the bottom about how to improve participation. There are a lot of issues at play and we need to work on them. I agree with the article, The First Step Act was a good start, we probably need more in that regard (and the Koch work on that issue has been outstanding). I like the idea of expanding EIC, but I know that won't be popular everywhere. Worker training is huge, I fully support it as part of the infrastructure bill because workers are the infrastructure of business.
 

Cortez88

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I think the current situation is the confluence of several factors. However, as an amateur econ nerd, I’m fascinated by the case study of comparing states that rescinded federal UI and those that didn’t. We should get some real time data in the coming months.
 

IU_Hickory

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Maybe because those jobs are paying well below poverty level??

Poverty level benefits are being taken away so that people are forced to work for a job that doesn't pay enough to pay the bills.

If companies paid a livable wage, then they likely wouldn't have issue finding people to the fill the jobs.
 
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mcmurtry66

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Maybe because those jobs are paying well below poverty level??

Poverty level benefits are being taken away so that people are forced to work for a job that doesn't pay enough to pay the bills.

If companies paid a livable wage, then they likely wouldn't have issue finding people to the fill the jobs.
people are collecting 36k in unemployment, getting stim checks, kid credits, doing cash side hustles. that's why they aren't working. they don't want to work. my FB account is littered with friends posting job opportunities they can't fill. as for paying a living wage - that's a state by state issue. keep bilking companies and they'll move what remains of production overseas or automate same. low paying companies overseas are champing at the bit to fill the void.
 

Marvin the Martian

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Maybe because those jobs are paying well below poverty level??

Poverty level benefits are being taken away so that people are forced to work for a job that doesn't pay enough to pay the bills.

If companies paid a livable wage, then they likely wouldn't have issue finding people to the fill the jobs.
I suppose people have seen the story of the ice cream parlor that raised its wages to $15 and was flooded with applications. https://www.ajc.com/news/ice-cream-...pay-to-15-an-hour/GZ2FZ74EKRD57NCH25KXHCU7NA/

People working $12/hour jobs who must pay full freight for healthcare aren't doing so well. There are stories of restaurants starting to offer health or 401s. The market is responding.
 

Marvin the Martian

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people are collecting 36k in unemployment, getting stim checks, kid credits, doing cash side hustles. that's why they aren't working. they don't want to work. my FB account is littered with friends posting job opportunities they can't fill. as for paying a living wage - that's a state by state issue. keep bilking companies and they'll move what remains of production overseas or automate same. low paying companies overseas are champing at the bit to fill the void.

If you read Twenty's link, this problem predates all the COVID relief measures. And it seems only to be impacting men as women are still working in huge numbers. What about kid credits, unemployment, and stim checks, keeps men from working but women do?
 

El Drado

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It is a very strange time economically. I can only speak from a mfg standpoint. The supply chain fiasco is real, and price increases on metals are bad (good if you are a steel mill)
From my many conversations with suppliers/customers about labor; The only people who are having shortages are the people paying less than $15/hour. I saw an ad from 80/20 wanting machinists for $15....what kind of machinist are you going to get at $15/hr?
 

mcmurtry66

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If you read Twenty's link, this problem predates all the COVID relief measures. And it seems only to be impacting men as women are still working in huge numbers. What about kid credits, unemployment, and stim checks, keeps men from working but women do?
no idea re gender. i've consistently read for causes of labor shortages: 1) govt cheese - gov/unemployment benes are a disincentive to going back 2) some still spooked about covid 3) daycare not sorted out 4) holdouts wanting higher wages

haven't seen anything gender related - not that i'm denying what you write
 

Marvin the Martian

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no idea re gender. i've consistently read for causes of labor shortages: 1) govt cheese - gov/unemployment benes are a disincentive to going back 2) some still spooked about covid 3) daycare not sorted out 4) holdouts wanting higher wages

haven't seen anything gender related - not that i'm denying what you write
In Twenty's link above is this chart. Men 25-54 have declined, women have held pretty steady.

wLFPrateCompar021320.jpg
 
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could trumps immigration policy's have had a effect? Mexicans generally fill the lower paying jobs , farm , kitchen type work etc. Thinking of it I don't think in my life experience, I've ever met or seen a Mexican who would have what I would describe as a desirable job or career. IMO the real crisis were going to face in the next decade is finding skilled labor.
 

Cortez88

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We used to yell at low wage workers that they shouldn’t expect to actually live off the wages from those jobs. They are entry level or for high school kids. Not career jobs. Now we are yelling because those same people don’t want to come back to those low wage jobs.
 
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We used to yell at low wage workers that they shouldn’t expect to actually live off the wages from those jobs. They are entry level or for high school kids. Not career jobs. Now we are yelling because those same people don’t want to come back to those low wage jobs.
what I have always wondered is what do you do with the Lucy's of the world. Its easy to say just bust your ass and eventually you will get ahead. Some people are limited and no matter how hard they try will never find success. Factory jobs and Unions used to help that type of person now if your not skilled or highly educated in some area your really behind the 8 ball.
 

mcmurtry66

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We used to yell at low wage workers that they shouldn’t expect to actually live off the wages from those jobs. They are entry level or for high school kids. Not career jobs. Now we are yelling because those same people don’t want to come back to those low wage jobs.
I read an article in Fla that 1/3 of hospitality workers said that Covid was an epiphany and that they had no intention of returning to that industry. Maybe a portion of people used the time to regroup and move into new fields. I wonder if the shortage is concentrated in certain industries such as hospitality
 
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Marvin the Martian

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We used to yell at low wage workers that they shouldn’t expect to actually live off the wages from those jobs. They are entry level or for high school kids. Not career jobs. Now we are yelling because those same people don’t want to come back to those low wage jobs.
And that has been a bit of a myth, from The Hill:

One of the complaints made about minimum wages in earlier periods was that many of those receiving the benefits were just high school kids working part-time jobs for pocket money. What was the policy benefit of raising their wages?​

From the NYT:

Minimum-wage workers are older than they used to be. Their average age is 35, and 88 percent are at least 20 years old. Half are older than 30, and about a third are at least 40.​
...​
Many have kids. About one-quarter (27 percent) of these low-wage workers are parents, compared with 34 percent of all workers. In all, 19 percent of children in the United States have a parent who would benefit from the increase.​

 
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larsIU

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In Twenty's link above is this chart. Men 25-54 have declined, women have held pretty steady.

wLFPrateCompar021320.jpg
I'm not a smart man but....could the increase in men 55 and older still in the workforce (women too) be causing some of the issues? That number has increased over the past 20 years or so. Could be a back end thing (people aren't retiring at 65 anymore) but if people are staying in jobs longer that means that job doesn't become "open" either.
 

Cortez88

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what I have always wondered is what do you do with the Lucy's of the world. Its easy to say just bust your ass and eventually you will get ahead. Some people are limited and no matter how hard they try will never find success. Factory jobs and Unions used to help that type of person now if your not skilled or highly educated in some area your really behind the 8 ball.
Good point. We have also taken a lot of “office” jobs and stuck a degree requirement on them for no reason. I’m sorry, but a degree shouldn’t be required for $30,000 a year jobs.
 

Marvin the Martian

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I'm not a smart man but....could the increase in men 55 and older still in the workforce (women too) be causing some of the issues? That number has increased over the past 20 years or so. Could be a back end thing (people aren't retiring at 65 anymore) but if people are staying in jobs longer that means that job doesn't become "open" either.
I do not know that, but it certainly stops advancement. I saw a stat the other day that, at their age, millennials are way behind other generations in wealth. Some of that is they are trapped by Boomers working longer.
 

mashnut

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I'm not a smart man but....could the increase in men 55 and older still in the workforce (women too) be causing some of the issues? That number has increased over the past 20 years or so. Could be a back end thing (people aren't retiring at 65 anymore) but if people are staying in jobs longer that means that job doesn't become "open" either.

I do not know that, but it certainly stops advancement. I saw a stat the other day that, at their age, millennials are way behind other generations in wealth. Some of that is they are trapped by Boomers working longer.

2008 ruined the retirement plans of a significant chunk of that generation. Many of them have no choice but to keep working at this point.
 

jet812

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It is a very strange time economically. I can only speak from a mfg standpoint. The supply chain fiasco is real, and price increases on metals are bad (good if you are a steel mill)
From my many conversations with suppliers/customers about labor; The only people who are having shortages are the people paying less than $15/hour. I saw an ad from 80/20 wanting machinists for $15....what kind of machinist are you going to get at $15/hr?
This is not entirely true. We start people at more than $15/hr for entry level/ low skill positions & still face shortages throughout all mfg operations. There are several factors that play into it but $15 is not a “magic number”, at least in my area...
 

IUJIM

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2008 ruined the retirement plans of a significant chunk of that generation. Many of them have no choice but to keep working at this point.
The vast majority of 401K participants were back to even within a couple of years after 2008. The next 10 years, the market has experienced tremendous gains. If somebody was planning on retiring in or around 2008, and are needing to continue at this point, they obviously made some grave errors along the way.
 

Cortez88

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I read an article in Fla that 1/3 of hospitality workers said that Covid was an epiphany and that they had no intention of returning to that industry. Maybe a portion of people used the time to regroup and move into new fields. I wonder if the shortage is concentrated in certain industries such as hospitality
I’ve wondered how many furloughed/laid off employees simply found something else to do. Inertia is a real thing and if you were in the restaurant business for a long period, couldn’t work for months, maybe you moved on and liked your new job.
 

mcmurtry66

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I’ve wondered how many furloughed/laid off employees simply found something else to do. Inertia is a real thing and if you were in the restaurant business for a long period, couldn’t work for months, maybe you moved on and liked your new job.
i wouldn't be surprised.
 

UncleMark

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Good point. We have also taken a lot of “office” jobs and stuck a degree requirement on them for no reason. I’m sorry, but a degree shouldn’t be required for $30,000 a year jobs.

This is a huge factor. On top of the low pay, many of these same people are saddled with student debt as well.
 

mcmurtry66

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This is a huge factor. On top of the low pay, many of these same people are saddled with student debt as well.
This is true but debt is also a choice. you don't have to go away to a fun, expensive school. here you can go to juco for $2,500 a year then the university of missouri stl for 10k a year. that's $25k for a degree. but some will go to slu instead and the same degree will cost $200k.

sadly for many americans gone is the idea of liberal education at some idyllic place for edification. too damn expensive. absent some compelling reason i'm pushing state u for my kids if they want to go away to school (which i will certainly push as i'm already old and want them out)
 
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UncleMark

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This is true but debt is also a choice. you don't have to go away to a fun, expensive school. here you can go to juco for $2,500 a year then the university of missouri stl for 10k a year. that's $25k for a degree. but some will go to slu instead and the same degree will cost $200k.

sadly for many americans gone is the idea of liberal education at some idyllic place for edification. too damn expensive. absent some compelling reason i'm pushing state u for my kids if they want to go away to school (which i will certainly will push as i'm already old and want them out)

The bottom line is that there are a lot of jobs out there that don't require a degree -- but they do, and a lot of kids going to college because they can't get any kind of decent job without that degree they don't need but have to have. It's a racket.
 
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TheOriginalHappyGoat

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I fear a lot of folks in this thread have looked past what I consider the most interesting part of Marvin's post: that the number of available jobs far outpaces the number of people drawing unemployment.

I'm not opposed to cutting off the added benefits. In fact, I support it. But let's not pretend that's going to magically fill all these jobs.
 
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UncleMark

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I fear a lot of folks in this thread have looked past what I consider the most interesting part of Marvin's post: that the number of available jobs far outpaces the number of people drawing unemployment.

I'd posit that a lot of those "available jobs" are bogus to begin with. It was posted here somewhere that one outfit is looking for machinists -- for $15/hr. That's not an "available job", that's a fantasy.

WFIU radio has a round table discussion show at noon every Friday. Today's show was about the "labor shortage" and the guests were owners of two local restaurant groups, the spokesman for the Indiana Restaurant and Hospitality Association (or some such thing) and an IU Econ prof. Everyone had some sort of idea about what was at the root of the shortage and what might be done to solve it, but not a single one suggested paying better wages and providing better benefits. When a listener sent in a comment to that effect via Twitter, the panel got defensive and shitty, deriding the questioner as having some sort of agenda.
 

JamieDimonsBalls

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It is a very strange time economically. I can only speak from a mfg standpoint. The supply chain fiasco is real, and price increases on metals are bad (good if you are a steel mill)
From my many conversations with suppliers/customers about labor; The only people who are having shortages are the people paying less than $15/hour. I saw an ad from 80/20 wanting machinists for $15....what kind of machinist are you going to get at $15/hr?

resin and lumber is worse than metals. You cannot even get machinists at $20+ per hour right now in many pockets of the country. I’ve talked with CEOs in the MW, SE, SW… many have the same excuse as it relates to people not wanting to work because of stimulus.

I cannot validate this based on Marvins prior explanation of how UE works (it doesn’t logically make sense to me) but that is what I’m hearing.

also the biggest group of non participation seems to be younger people, not the parents with kids.
 

TheOriginalHappyGoat

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I'd posit that a lot of those "available jobs" are bogus to begin with. It was posted here somewhere that one outfit is looking for machinists -- for $15/hr. That's not an "available job", that's a fantasy.

WFIU radio has a round table discussion show at noon every Friday. Today's show was about the "labor shortage" and the guests were owners of two local restaurant groups, the spokesman for the Indiana Restaurant and Hospitality Association (or some such thing) and an IU Econ prof. Everyone had some sort of idea about what was at the root of the shortage and what might be done to solve it, but not a single one suggested paying better wages and providing better benefits. When a listener sent in a comment to that effect via Twitter, the panel got defensive and shitty, deriding the questioner as having some sort of agenda.
Business owners are generally scared of dramatic wage increases because of what it will do to prices and might do to demand. They are a conservative bunch. Don't rock the boat. What works, works.

But we are going to have to face that bridge sooner than later. Most of the lowest paid people in this country are the same people who we decided were essential workers during the shutdown, and those two facts are hard to square away. So we are going to have to pay them more, and that means we are going to have to pay more for the goods and services they produce.
 

TheOriginalHappyGoat

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resin and lumber is worse than metals. You cannot even get machinists at $20+ per hour right now in many pockets of the country. I’ve talked with CEOs in the MW, SE, SW… many have the same excuse as it relates to people not wanting to work because of stimulus.

I cannot validate this based on Marvins prior explanation of how UE works (it doesn’t logically make sense to me) but that is what I’m hearing.

also the biggest group of non participation seems to be younger people, not the parents with kids.
If you think the stimulus is keeping people away from $20/hr jobs, I have ocean-front property in Wyoming to sell you.
 

IU_Hickory

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I fear a lot of folks in this thread have looked past what I consider the most interesting part of Marvin's post: that the number of available jobs far outpaces the number of people drawing unemployment.

I'm not opposed to cutting off the added benefits. In fact, I support it. But let's not pretend that's going to magically fill all these jobs.

Businesses want the benefits cut so their low paying jobs look more appealing. Otherwise they would have to offer higher wages to attract people. Wouldn't want to cut into the ceo's salary.
 

JamieDimonsBalls

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The waivering of work search requirements is a key component of the dislocation in labor supply and demand.

In many places, you do not need to provide proof of seeking work. Luckily, that is ending in May in many states, if it hasn't already:

FL


MI


AZ


NV (ended)

 

IUCrazy2

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I fear a lot of folks in this thread have looked past what I consider the most interesting part of Marvin's post: that the number of available jobs far outpaces the number of people drawing unemployment.

I'm not opposed to cutting off the added benefits. In fact, I support it. But let's not pretend that's going to magically fill all these jobs.
Yes, but that was kind of my argument about what rate is used. Another thing that impacts the available worker pool is disability payments. There are some people who are capable of working but do not because that benefit is more lucrative.

The numbers are baked a bit by what is considered the available workforce. These people did not suddenly disappear after a year. They were available to fill the jobs just one year ago...