Kate, what did the labor market teach you this
week? I think overall it still is moving in
the right direction because we want to see is continued
job growth. Um but not so much that we
think we're risking, overheating. And I think hitting
at 209,000 jobs added with unemployment at 3.6 does seem
to meet that mark that shows that there's still room
to grow, there's still jobs being added, but
it is not so much that we should really be
worried yet. So Kate, what, what,
what I find hard to also understand is that the
typical signs that the job market is going to roll
over aren't necessarily the signs that we're seeing, right
? Like manufacturing jobs increased, construction jobs increased in
the jobs data are the signals that we need to
look for different this time around. Um That's a
good question. Um I think, you know,
we are looking for signals but I don't see those
. So I think your read is actually pretty correct
. Um I think, you know, in particular
, as you know, the construction and manufacturing are
growing. Another good sign is that service sector jobs
are growing, particular government jobs are growing. If
we compare it to the great recession, it really
lagged in public sector work. And this is a
really critical sector for ensuring we have a resilient economy
. Since a lot of public sector work is the
work that make, makes other work possible. And
so I think, you know, it is still
moving in the right direction. We don't really see
that decline. Sorry. Is this still full unemploy
? Is this still full employment? If you were
at the Fed, would this look like full employment
? This does look like full employment? But when
you ask about the Fed, that's a pretty critical
point because what we have seen in the past few
years, um is that even though we might be
nearing full employment, um that, that does not
seem to be leading to the wage pressure that is
leading to inflation. So making gains, there might
be full employment and evidence of those wage gains that
workers are making, but it is not impacting inflation
. And so that's the key part that the Fed
should be looking at, look so wages can go
up because wages are not leading inflation, that link
is a little bit broken. So then it's ok
. That's what I think. I mean, that's
sort of my read of date. I think that's
what we've seen in the past few years. There's
not a lot of evidence that wages are leading to
inflation. Wages are going up. Um, and
one thing I, you know, I think I
like to bring up over and over is that we
are facing, you know, decades of increasing income
inequality. We used to have a much less,
any unequal labor market. Um, and now it
seems as though, you know, the past two
years we should found the past two years has reversed
almost a quarter of the past four decades of growth
and income inequality. Do you, do you not
worry that we're starting to see minorities though. Um
have their unemployment rates start to rise? That that
is something that the fed has talked about in the
past. It, it wants to have a broad
labor market. It wants more people to participate and
benefit. That's a good point. Um And I'll
sort of look to the late economist Bill Riggs who
passed away recently, who always looked at that sort
of gap between black and white unemployment rate. Black
unemployment did go up last month and over the past
three months, it went up a full 1% point
and that was statistically significant. Um But that is
also compared to the fact that the black employment rate
, so not the unemployment rate, but the employment
rate is now only 1.5% points lower than the white
employment rate. And that is historically close for employment
rates between black and white workers. So when you
look at both the unemployment rate and the employment rate
. What I see is there's probably more room for
growth for black workers but they have made major gains
in the past year or so. I mean,
this might be too short term but the repayment of
student loans that are going to kick in in the
end of August beginning of September. What's the risk
that, that really dense, that and skews that
labor data even more, um, that will remain
to be seen. I think where we might see
that is we've seen a lot of people going into
better jobs. They've been, they've been more effective
at searching for better jobs and finding jobs that pay
them better. Um When workers are facing more costs
like debt repayments, they might be a little backed
in a corner and have to accept a worse job
. So I think that's the risk we see is
that when workers have more monthly payments, they might
accept a worse job because they can't spend as much
time searching for a good job. But I think
that really will remain to be seen, Kate.
One of the issues remains that we have a supply
side issue in the labor market. What is policy
currently doing enough to address that supply side, what
could be done in addition to what is already being
done to improve it? Um I really like this
question actually because I think we've seen employer demand and
that's good. That's where we see these wage gains
but we also need to impact the supply side.
And I think that is where we think that a
lot of government policy would be effective um because you
need both sides of that equation. And so government
policies that I think would help the supply side are
things like making sure jobs are safe and secure,
particularly for older workers. Um making sure that people
have access to benefits like um paid leave, paid
sick time, the type of things that workers need
to ba balance their full lives. And so I
think if we want to impact the supply side while
we have this strong demand, we really need those
wrap up brown types of uh job quality measures.
What do you make then of the strikes that are
happening, particularly say at UPS um Southern California is
also undergoing some issues. Like, how do you
think, why do you think this keeps happening now
? And is that indicative of something else? Um
I mean, I think there's a big pent up
demand for labor action might be how I interpret it
, that workers have not had the stability to really
ask for what they need at work. And because
the labor market continues to be strong, there continues
to be a lack of evidence of a recession that
gives workers the leverage to ask for the things they
probably they always want it. Um And so when
we talk about these Ups workers, they've been asking
for things like air conditioning and trucks, which is
really a basic workplace safety issue for them for 20
years. Um And so I think, you know
, these are things they've always wanted, but they
finally have the leverage because the labor market continues to
be very strong when the recession comes. Do you
think that labor will be able to, what extent
will labor be able to retain some of the benefits
that we have seen being ascribed to it as a
result of the tight labor market that we see currently
Kate, is this a one off or is this
going to be sustainable? Um I think that sort
of remains to be seen but depends a lot on
the policy environment. Um I think the degree to
which we can bake in the recent gains will depend
on how much there is government support and institutional support
for those gains. Um And so we've not seen
sort of, you know, wide scale changes to
our labor policies in the past few years, we've
really been relying on those competitive forces, but in
order to sure those are maintained, we do need
things like policies that ensure that they are baked in
. And so, you know, my quick list
of those would be things like a higher minimum wage
um making it easier to unionize a workplace, um
enforcing the labor laws we already have on the books
better than we currently are. And so we really
need those institutional changes to make sure that the recent
gains are lost.