"Fear of infection or lack of child care kept some workers home, where they discovered that the financial rewards of their jobs weren’t enough to compensate for the costs of commuting and the unpleasantness of their work environment. Older workers, forced into unemployment, decided that they might as well take early retirement. And so on."
That's the myth of "the great resignation," recounted by Paul Krugman in "What Ever Happened to the Great Resignation?" (NYT).
Krugman shows that the great resignation did not happen and observes that's a reason for 1. higher interest rates and 2. more immigration.
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45 comments:
Krugman is not a reliable source. Ignore him.
https://news.harvard.edu/gazette/story/2021/10/harvard-economist-sheds-light-on-great-resignation/
https://hbr.org/2021/09/who-is-driving-the-great-resignation
https://www.hfma.org/topics/hfm/2021/october/the-great-resignation--reality-or-myth-.html
https://www.npr.org/2021/06/24/1007914455/as-the-pandemic-recedes-millions-of-workers-are-saying-i-quit
https://gusto.com/company-news/a-real-time-look-at-the-great-resignation-january-2022
Paul "I resigned all my dignity and objectivity to get Trump" Krugman knows all about the great resignation.
Paul Krugman has been wrong about everything.
This is because he is trying to justify things that are obviously not true.
Government spending without commensurate increase in production causes inflation. The government is always inefficient applying capital.
This is basic law of the universe stuff.
In addition as governments appear more corrupt tax evasion goes up. There is a reason that the government is talking about going to digital currency. The government is obviously corrupt and illegitimate and people are going black market cash.
Krugman is making shit up to hide from reality.
Krugman proves there is money in being the contrarian.
I rarely saw immigrant workers in Missoula fast food joints. Those places can't keep a full staff anymore either. Our favorite taco places have cut their hours back to lunch only or closed down.
Honestly don't know where the workers went. Lousy jobs but the hours work well for students.
I wonder if local parents discouraged them in 2020 and now can't get them out of the basement?
I do sometimes think Krugman is wrong for political reason more often than he's right.
Take his argument on people leaving jobs for better jobs. Yes, I hear employers around here talking about labor churn, churn, not just turnover. The reason? Inflation at rates we haven't seen since Jimmy Carter. Salaries just aren't keeping up with rising costs, so workers are taking even small steps up in pay to try to stay afloat.
Likewise with people returning to work after attempting to retire. Retirement savings that appeared to be adequate for years only a couple of years ago are now doubtful, particularly with the market down as it is. Housing is scary enough, heaven forbid you have to replace a car or have health issues.
As to immigration, is he serious? Immigration fell to new lows almost as soon as Trump took office and now, 4 or 5 years later it's affecting the job market? With the surges we're seeing? How does that explain the labor shortages in the types of jobs that new immigrants don't really qualify to do?
Just another reason to smile whenever you see one of Krugman's opinion pieces and read it only for its entertainment value.
Paul Krugman is an ignoramus. Invert anything he says and you'll get the truth. The reason for higher interest rates is $6T of the "stimulus" spending appropriated by the Congress. That caused the money supply rate to zoom to 25%/yr. Inflation is now running near 10%. The Congress cheapened the dollar. Withdrawing that $6T from the money supply would bring prices back to the Jan/Feb 2020 levels. The Congress could do that by selling Federal land to the private sector and reducing its ownership in Western states.
At the same time, Democrat governors were shutting down their states. A prime example his King Jan Inslee I of Washington. He declared an emergence over two years ago. The Democrat state legislature would not put a limit on emergencies. King Jay shutdown nonessential businesses like restaurants and fined to death any business that dared violate King Jay's edicts.
We do not need more immigration. Krugman is a shill for the U.S. Chamber of Congress and businesses that want low wages. Also, Democrats who don't like the current population and want a more Democrat-friendly, compliant population.
I don't have access to the article so I'm commenting blind. (many of you might say I do that regularly)
Krugman is a fool. He's a Nobel Prize laureate who has gotten way off of his area of expertise and has spent years with the former paper of record getting things wrong on a regular basis. He's been wrong so many times about so many topics, people have taken to writing columns and blogs highlighting the worst of his 'expertise'. And this is not a new phenomenon. It's been going on for years.
Being an 'expert' these days is great work if you can get it.
HIs column will be forgotten long after we enter recession territory. In the meantime, there are numerous reasons for people leaving the labor market. But as I cannot access the article, I'll just list a few here. Covid opened the door to full-on remote work. Many found that they loved it. In fact, so many that office space in Chicago and Manhattan (and elsewhere) is entering dangerous levels of low occupancy. What to do? Companies are not renewing leases for large spaces, if for any spaces at all. Those who have moved to the remote side of things are either staying with their company (if that company lets them stay remotely), or they have gone rogue- that is- independent. Some find other companies, but many are selling their services as independents, which often do not show up in labor statistics.
Then there are those like me. I was looking at working two more years. I traveled and did group presentations all over the country. When covid hit, the offices I used to meet with closed up. Many of them cut their teams by half or more, and had the remainders working remotely. Some of them just went out of business- such is the plight of small companies. Many industries cut back on people- not just mine. Law firms got smaller and more nimble. Doctors offices are still feeling the strain of people who left during covid. Retail is a mess, since covid cleaned the house.
I had the option of spending my last two years doing zoom presentations, but I said no. The fun of my work was traveling to the different cities, getting in front of live people and seeing that spark in their eye when I got through to them. Seeing them get juiced up by what we did. On Zoom, people would drift off. There was no electricity that you get doing things live. I said, f*** it. I'm done. So I, and thousands of others like me just went away a year or two early.
Then there's the changing work environment. Tech has changed everything. And hence, our old work models no longer apply for much of the nation. You need new skills to bring to this marketplace. And a new generation is coming out with a different concept of how work should be. Unfortunately for them, not every workplace is going to be like Google, but that's the standard in many minds, nonetheless. And anything that falls short of that has a hard time of bringing in people.
Then there is the unreal expectation that you "deserve" a livable wage. You neither deserve it, nor is it a right. And who decides what level is 'livable' anyway? Paul Krugman? The NY Times? Please. Serious programmers, code writers for large tech firms make extraordinary salaries, bonuses, benefits. There's so much of that that is in the news, online, and social media that the younger generation has an outsized idea of what their worth is in the marketplace. A burger flipper does not have that much value, but there is value in learning to show up and do that work- every day- until you gain new skills, more experience. That's how we used to climb up the ladder. But today there is no ladder. Today it's perceived to be everyone having a right to a good life, a good wage, great benefits, and no reason to have to pay back school loans.
There is a large gap, a disconnect between reality and expectations. Our workforce lies somewhere in between. Unless, of course, you can get work as an 'expert'. That field seems to have no shortage of participants.
I would like to hear Krugman discuss the inversion of the 2 year and 10 year interest bond note yields.
That would be truly entertaining.
Krugman is a joke.
More like the “great small business kill-off” happened. Rule of thumb used to be that 80% of all jobs were in small businesses. Then the COVID shutdowns, applied unevenly, closed mom & pop businesses while national chains like Target and Walmart stayed open making record profits. Something happened to 12 million jobs overnight and only about half have returned. Delays for “going back” have been attributed to generous temporary government benefits and exasperated by lack of child care to handle suddenly at-home instruction. The recovery of these losses mostly took place during last six months of Trump’s first term and have essentially stalled with an historic high number of people who have given up looking for jobs and fall off the “unemployment” rolls. Krugman is clueless.
Paul Krugman? Here's my rebutal: Enron
'nuf said
Krugman shows that the great resignation did not happen and observes that's a reason for 1. higher interest rates and 2. more immigration.
I'm not paying for a subscription to the NYT to read one article (Aside: Why can't I pay a quarter to just read the damn article. Why do I have to sign up for a subscription?)
So HOW does he show it?
Oh, look, through some internet trickery I'm able to read the article. Let's delve in.
In short he says Labor Participation rates are back to 2019 levels. So nobody resigned they just quit their jobs for another job. I'd ask Mr. Krugman to look up the definition of resign, and apply his big economist brain to the costs to productivity to masses switching jobs. He assumes the switch is for better pay. I would want to point out to Mr. Krugman that "better" doesn't always mean more pay. It could for example, be "more flexible".
He then tries to tie that into immigration by saying meanie Trump stopped all those hard working immigrants from coming into the country and taking payroll(?) jobs.
So his prescription is that we should let even more immigrants in to pump up the stats, and raise interest rates because secretly the economy is really "overheating".
Based on Krugman's wrong prognostications in the past I think this is probably a guarantee that we're heading into a whopper of a recession.
There, I saved you a quarter.
Krugman is a fool.
Are Americans embracing male breadwinning and female homemaking (in the context of marriage)? And, if so, which Americans?
I don't believe that Black women and educated White women are dropping out of the workforce. There is a shortage of "marriageable" men in the African American community and among well-educated whites. We know this. These unfortunate women can't stop working. This is probably the main reason why Black women and educated White women vote Democrat and are enraged 99% of the time.
Never bet against the United States of America.
"Likewise with people returning to work after attempting to retire. Retirement savings that appeared to be adequate for years only a couple of years ago are now doubtful, particularly with the market down as it is."
But the market isn't down. Yet. When it does head south, retirees are really going to be hurting.
As to Krugman, his analyses aren't worth the time required to read them. They are not honest attempts to explain current economic conditions.
"In short he says Labor Participation rates are back to 2019 levels."
Really, Paul? Good grief.
We are still 6 million + workers short- actual people working- than we would have had if employment growth had just followed the working age population growth since January of 2020.
Krugman is an idiot and a liar.
“Government spending without commensurate increase in production causes inflation. The government is always inefficient applying capital.”
I will respectfully disagree, to some extent, as I think that your statement is too simplistic. As I see it, the deficit spending, per se, isn’t the problem, when it comes to inflation, but rather how that deficit spending is financed. The first problem is that the Democrats have spent literally $Trillions$, that we didn’t have, wastefully. And second, that those who have been, for their own reasons, buying our sovereign debt, are no longer buying as much of it.
When I took Monetary Economics so many decades ago (about the time that inflation was tamed last time around), things were a bit different. We were taught that the Treasury financed deficit spending by selling debt instruments of one type or another. And the Federal Reserve bought them, either by printing money, or by crediting accounts of banks. In either case, the money supply increased by multiple times the amount of new money produced by the Fed through a Monetary Multiplier, which, long term is essentially equal to 1/RR (reserve requirements). You get there with an infinite series expansion, where if the first bank gets an $X deposit, they can loan out $(1-RR)X, and the bank taking that deposit can loan out $(1-RR)*(1-RR)X, etc. Summing those terms, as they extend to infinity, simplifies to $(1/RR)X. Thus, a 20% Reserve Requirement translates, ultimately to a 5x increase in the money supply, which, since by definition, MV=PQ, M↑=>↑P (price level), since V(Velocity is weakly, but positively, correlated with P, and Q (quantity of goods and services produced) is a real world value.
What has changed in those 40+ years is that the Fed has ceased to be the only purchaser for US sovereign debt. As long as China, and others around the world were buying our sovereign debt, the Fed didn’t have to. And part of why they all were buying it was that the US$ was, and still is, the world reserve currency. But recent deficit spending has been so massive, that the Fed has been forced to buy more Treasury debt, creating money, growing the money supply, and ultimately causing inflation. And we thus have inflation - Too much money (M) chasing too few goods(Q).
But, as has been pointed out, if it is possible to screw things up, FJB is going to do it royally. Recently, he has seemingly done everything that he could to destroy the US$ as the world’s reserve currency, by, for example, not allowing our currency be used to buy Russian oil and gas. His Administration sought to hurt Russia by preventing them from selling their oil and gas. But that isn’t about to work. Too many countries need those products. Instead, their trade is now in other currencies, most notably their own. China, seeing how this is working, is looking at doing similarly. That ultimately is likely to reduce the demand for both US$ and US Treasury instruments, forcing the Fed to buy even more of our Treasury debt.
In the end, deficit spending is causing inflation, but only indirectly. We can afford some of it, if we keep the US$ strong and it’s position as the world’s reserve currency equally as strong. But much more deficit spending has been going on, esp with Dems controlling both Houses of Congress and the Presidency, while the FJB Administration is going out of their way to weaken the US$.
I'm not going to open the article but just in the quoted premises I am failing to see his point. Great resignation is NOT about people leaving the workforce, it's about employee turnover reaching unheard of levels across all sorts of industries. That churn is truly an amazing thing to see.
As another poster mentioned, I still am trying to understand the impact these turnover rates are having on productivity. In many very institutionalized businesses I work with, turnover rates from 10-15% per year to 25-30% per year. What does it mean to go from 9/10 staff well-trained and up and running at any time to 7-7.5/10 staff the same. I have to imagine that's a huge productivity loss (10%?) combined with a much higher HR onboarding/training cost. It's not just 15-20% less well-trained/operating staff, it's the staff doing the work that are also now spending more time training and overseeing new staff.
Meh.
Krugman will cover for the leftist agenda even if it makes him look stupid.
And it usually does...
Stay tuned for Everybody Loves Krugman
Our daughter works as a recruiter. When Trump was in office, they found it impossible to fill every job opening because there was so much demand. Her boss said that in 30 years in the business he had never seen so many job openings.
Then Covid, then she was laid off.
She now works to recruit most tech people and reports that every single candidate wants to work remotely and with flexibility. Maybe half of applicants say they would maybe consider a hybrid of a few days in the office and a few days work from home.
My husband is an attorney who works for a government entity. Working from home was forbidden except for rare circumstances. Then Covid. Everyone worked from home and the current policy has changed, apparently permanently, where employees will be permitted to work remotely for at least two days a week. That's a change all for the better.
"The first problem is that the Democrats have spent literally $Trillions$, that we didn’t have, wastefully."
Really? The Democrats did that, without any help from the Republicans, in one year in office? Baloney.
If you really care about cutting expenditures, demand that Congress CUT the war budget, not to keep increasing it each year, usually for more than is asked by the War Dept. Both parties are shamefully complicit in this theft of the people's money to put in the already swollen pockets of the death merchants. Our war budget needs to be cut at least 75%, if not more.
Krugman is ALWAYS wrong.
I think he's paid to be wrong.
If Krugman told me water was wet, I'd ask for a second opinion.
"The first problem is that the Democrats have spent literally $Trillions$, that we didn’t have, wastefully."
Really? The Democrats did that, without any help from the Republicans, in one year in office?
Yes, the did. And they did so using legislative trickery. At least until even Manchin got fed up and put a stop to it.
Our war budget needs to be cut at least 75%, if not more.
Yeah, now is exactly the right time to lay down our arms given how peaceful and cooperative the world is today.
Why do you seek the destruction of America Comrade Marvin?
From 2004: "You may not recall, but it’s my contention that whenever the economy goes well, Paul Krugman kicks his cat." Jonah Goldberg.
For a while there was at National Review the Krugman Cat Index, which followed the altitude of Krugman's Cat into low earth orbit as the economy improved under GW Bush.
The internet has swallowed all images of this as far as I can tell.
Krugman's degeneration into partisan hack well predates Trump.
Ann- why would you post anything from this hack? he is never right
Economists here. FWIW, 4 million plus people quitting every month since May seems pretty Great to me. Has never happened before -- though there are data suggesting (the current data set does not go back this far) we came close a few times in the 50s and early 60s.
'Really? The Democrats did that, without any help from the Republicans, in one year in office? Baloney.'
When one party controls congress and the White House, that party 'owns it.'
Doesn't matter who helped.
Those are always the rules...
mikee said...
For a while there was at National Review the Krugman Cat Index, which followed the altitude of Krugman's Cat into low earth orbit as the economy improved under GW Bush.
The internet has swallowed all images of this as far as I can tell.
https://www.nationalreview.com/corner/krugman-cat-index-jonah-goldberg/
but no, there doesn't seem to be any pix
Krugman writes that he is correcting his own prior conclusion of a great resignation. And for those who hate his prose you can click for the great graphs and do you own analysis. And then click his links to others.
I'm not sure how Krugman can claim the great resignation didn't happen when the data he presents shows that it did happen. The labor force participation rate, which is people in prime working years, who are working or actively looking for work is down.
As for the workforce size. Yay! We're back to the 2019 level. But guess what? His own chart shows a steady trend upward since at least 2017. If you extrapolate to 2022, we are down 6 million employees from trend. Against about 150 million workers, that's 4%.
But the market isn't down. Yet. When it does head south, retirees are really going to be hurting.
Original Mike, my conservative 401K investments are down nearly 4%, with enough storm clouds on the horizon to expect greater losses over the next few years. Prices up, retirement savings down, not a pretty picture if that expectation comes true.
BTW, someone mentioned they didn't want to subscribe to the NYT to read the article. I didn't. I got into the article, did a select all (CNTL A), copied it and read it a Word document.
Sorry, Krugman has no intellectual honesty and I don't believe he can 'show" (i.e., prove) anything in a brief article written long before we know the consequences of the last 2 years on America's labor force. Krugman is to economics what Tribe is to Con Law -- a highly credentialed person who will stop at nothing to make his ideological points.
Looking at it in another way, we don't actually need to live in a world where everyone eats lunch at a Chipotle or grabs a sandwich from some "healthy" but not healthy place, because there were until Covid lots of immigrants who will make those made-to-order meals for you. Used to be you took a sandwich you made yourself to work, and maybe even your own coffee in a thermos. Absence of low-paid workers at Starbuck and office-worker-lunch-places is not a reason to change immigration policy. It may be a reason to see Starbucks and Pretend a Porter disappear. Especially since work-from-home will allow folks to make their own breakfast and lunch and eat what they want. Have you seen the prices at Starbucks, Pret a Porter etc? For 30% you can make it yourself the way you want it. Ugh.
Also, retirees are hurting not necessarily because the stock market is down but because what retirees always relied on for their nest egg -- muni bonds, UST bonds and corporates -- have paid ZERO -- literally ZERO -- the last 4 years. Imagine having spent 35 years accumulating a "nest egg" of, say, $500k and expecting you could get $20 K each year to supplement your SS and pension if you had one. Then the FED took it away from you because....because banks. Because hedge funds. because Wall Street. Because BlackRock. Because stocks. This was extremely cruel to many over 65's and, imho, broke the social contract.
Also, retirees are hurting not necessarily because the stock market is down but because what retirees always relied on for their nest egg -- muni bonds, UST bonds and corporates -- have paid ZERO -- literally ZERO -- the last 4 years. Imagine having spent 35 years accumulating a "nest egg" of, say, $500k and expecting you could get $20 K each year to supplement your SS and pension if you had one. Then the FED took it away from you because....because banks. Because hedge funds. because Wall Street. Because BlackRock. Because stocks. This was extremely cruel to many over 65's and, imho, broke the social contract.
Working, instead of staying home to run the house/kids, has always been dubious, from a spread sheet result kind of decision making.
But its taken me most of my life to realize there is more to life decisions than money.
It is hard to argue the world is a better place with two parents working and child care is hired out. The extra money is often used for stuff like Disney World, or toys, like a boat.
Anybody who takes Krugman seriously,is not a serious person! Of course, persons whose world view was informed by 60's protest music are, also, not serious persons.
So many bars and restaurants and small businesses closed. What happened to the people who worked there? What happened to the people who owned or ran such enterprises? I don't know if there was a "great resignation," but I suspect a lot of people may have given up looking for work.
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