CHICAGO | General Discussions

[LouisVanDerWright]

^^^ Or it means the economy is coming up with new ways to put workers to better use. For example, uber, instacart, etc. I use the example of my sister who just graduated from PA school and had a job that started 4 months after her graduation. Instead of sitting on her ass for 4 months or trying to find some sort of a part time gig that was fine with her disappearing after 4 months, she did Instacart. That's labor slack that didn't exist previously and it's entirely possible that slack such as that exists throughout the economy and we are slowly pulling it tight. Another example is Uber, how many single parents struggled through a second job or even tried to hold down a first job at a minimum wage establishment only to keep having issues because of other obligations in their life (i.e. 3 or 4 kids or something like that)? Well all of the sudden you have gigs like Uber where, yeah you can just turn your job off to go get the kids without being fired. That job might pay the same overall as McDonalds, but the flexibility adds real value to that single parent's life.

Finally, there may just be an issue with the way we measure things like wages given the radical shifts in the economy since 2008. Do you really think our economic models have kept up with things like Uber? Is it really that easy to measure all these suddenly decentralized businesses? What about the fact that something like Uber cannibalizes a formerly more lucrative career like cab driving? Sure people might be quitting McDonalds to drive Uber, but that's destroying higher paying jobs at a Cab company and holding down overall wage growth.

There is no scenario where "the rich" can just hold down wage gains by having some sort of handshake agreement not to give raises. At some point you run out of workers and wages will go up, that's not a question. It just might be that we've entered a new era of economics where the natural rate of unemployment has fallen slightly because of innovations like the gig economy. Perhaps the economy can employ more people before wage inflation kicks in because there's more flexible roles out there like Instacart that turn my sister, as highly educated and productive of a member of society as she supposedly is, into a worker for 4 months where she would otherwise be sitting on her hands. Think of how many people around the country might be picking up shifts on similar apps, probably hundreds of thousands or millions of workers, that certainly moves the needle. Economics is simply never as cut and dry as "this one statistic so everything". Yes real wages were essentially flat last month, but they've been showing signs of life over the last 24 months. There are too many moving parts for you to say "well every other economic indicator is positive, but this one indicator isn't therefore there's a huge problem"...


PS: as we've said a dozen times, stop harping on the participation rate because it literally does not mean what you think it does. Are you going to cop to having spouted that nonsense about "women joining the workforce" causing the participation rate to increase starting in the late 1960's or are you going to acknowledge that the baby boom seriously skewed that stat?