@SteveRoth @Alon @jamisonnbishop @ryanlcooper i think this is maybe restating @Alon’s point, but one conjecture would we are experiencing a labor bargaining power hangover. “labor hoarding” is the phrase the US press uses, but what it means is that businesses perceive labor relations as precious, potentially hard to replace or scarce, rather than disposable and replaceable on demand. so they err on the side of retaining workers, rather than dismiss and rehire them. 1/

@SteveRoth @Alon @jamisonnbishop @ryanlcooper this would be a pro-employment result of the US’ extraordinary fiscal support during the pandemic. over the last few years, workers experienced getting by without current work — it became thinkable — and they accumulated savings that, even for a while after supports ended, meant “take this job and shove it” remained on the table. 2/

@SteveRoth @Alon @jamisonnbishop @ryanlcooper thanks to state support, workers were (qua @Alon / Meidner) perceived as having wings, rather than hiding desperately under shells praying for the beneficience of employers. 3/

@SteveRoth @Alon @jamisonnbishop @ryanlcooper in the stupid Econ 101 imagination, there is only price and quantity, and labor supports can only shove the supply curve outward, reducing quantity employed. 4/

@SteveRoth @Alon @jamisonnbishop @ryanlcooper but it is policy that determines the *character* of labor as an economic commodity. in a Dickensian world, labor is disorganized, disposable, a burden you take on only when needed and shed as quickly as possible. 5/

@SteveRoth @Alon @jamisonnbishop @ryanlcooper in a civilized world, labor is people, employment is a relationship, employers who become available then unavailable, “sleep around” looking to replace you, are employers workers can and do avoid. 6/

@SteveRoth @Alon @jamisonnbishop @ryanlcooper for the first time in 50 years, from 2021, US employers have got a taste of a civilized labor market. even as household employment declines (gig workers find it harder to hire themselves), employers retain the relationships they’ve established, are less likely to let go. 7/

@SteveRoth @Alon @jamisonnbishop @ryanlcooper in a civilized world, what that leads to is a profits recession, not a labor recession at all, profit margins (i think still near double historical norms) normalize while workers remain employed and employable. 8/

@SteveRoth @Alon @jamisonnbishop @ryanlcooper it remains to be seen how civilized our country is willing to be. what if the stock market declines even while employment is tight and interest rates are steady? is that even thinkable? /fin