Working Overtime

There are currently 4.2 million more job openings in the United States than the number of people unemployed.

Source: https://twitter.com/charliebilello/status/1468614253125029898/photo/1

In November there were 6.9 million persons unemployed according to the most recent Bureau of Labor Statistics monthly report but there were 11.1 million job openings.

It is yet another indication of how tight the labor market has become in the United States.

There is a reason that you see HELP WANTED signs almost everywhere you go.

Credit: https://archive.sltrib.com/article.php?id=4661371&itype=NGPSID

In fact, have you noticed that a fair number of radio and tv commercials are now advertising for workers rather than customers?

It really is unprecedented in my lifetime.

You can see that there were hints of this problem in the chart above with the strong economy that we had right before the pandemic began in early 2020 but we have entered entirely new territory today.

The tight labor supply market has given workers greater flexibility to change jobs to seek better pay or improve their work situation.

You can see that in this FRED graph that tracks voluntary terminations ("Quits") among private sector employees. 

Quits have never been higher since this data was first tracked.

Source: https://fred.stlouisfed.org/graph/?id=JTS1000QUR,#

Quits are highest in the Leisure and Hospitality sectors. There is a reason that you see so many "Help Wanted" signs for restaurants, hotels and the like.

Quits are also up in Retail where you also see a lot of "Help Wanted" signs.

However, you also see an upward trend in the Professional and Business Services sector.

Contrast that with the Government sector. 

No one ever seems to get fired from a Government job. 

It seems that very few quit either. Why is that?

Source: https://fred.stlouisfed.org/graph/?id=JTS7000QUR,JTS9000QUR,JTS4400QUR,JTS540099QUR,#

Today there was a report out that new unemployment claims for last week were the lowest they had been in 52 years.

Predictably, Joe Biden, the Democrats and the media were extolling the news.

Granted, it is a great headline.

However, considering that there are 4.2 million more job openings than there are unemployed is this really a great accomplishment?

I am also trying to figure out what Biden's economic plan is.

The tight labor market has increased wages which has been responsible for a record number of "Quits" as workers look to improve their economic status.

However, due to Federal Reserve policy, unprecedented government spending, and surging oil and gas prices caused by the inane energy policies instituted by Biden, inflation is outpacing wage growth.

The result is that the wage gains that workers are getting are actually putting them in a worse position than they were before.

Over the last 12 months, average hourly earnings are up 4.9% but the consumer price index is up 6.2%.

Source: https://www.cnbc.com/2021/11/10/inflation-has-taken-away-all-the-wage-gains-for-workers-and-then-some.html

Is that also part of the economic plan?

Throughout the Trump years, hourly earnings outpaced inflation as the chart above also shows.

Now take all of the above and layer this on top of all of the other problems we have right now.

Source: https://www.cbsnews.com/news/4-day-workweek-congress-progressives/

The Congressional Progressive Caucus on Tuesday endorsed a bill by Representative Mark Takano that would create a 32-hour workweek, with overtime paid after 32 hours of work. Takano touted the move as a win for work-life balance and a needed corrective after decades of longer work hours with stagnant pay in the U.S.

"People are spending more time at work, less time with loved ones, their health and well-being is worsening, and their pay has remained stagnant. It's time for change," Takano, a Democrat representing California, said in a statement. 

Is this also part of the economic plan of Joe Biden and the Democrats?

We have 11.1 million unfilled job openings in the United States and only 6.9 million looking for work.

And these Democrats want to worsen the labor situation which this legislation would undoubtedly do.

The current 40-hour work week (with the requirement to pay overtime to certain classes of employees) was part of New Deal legislation in 1938 in the Fair Labor Standards Act.

A significant rationale for the legislation at that time was to provide an incentive for employers to hire more workers in order to lower the unemployment rate which was then at 19%.

By requiring time and a half overtime pay at 40 hours it was thought that employers would consider hiring a new worker for the extra hours at straight time rather than pay the premium wage for overtime hours for current workers.

It seems that Progressives in the 1930's had some strategic sense to their proposals even if they placed government in a place (setting the standard work hours between private employers and willing workers) that many argue is well outside of the role of government. 

You can also see that the United States was in a far different labor market situation in the 1930's than it is today. After all, we were in the middle of the Great Depression.

It is the exact opposite situation that we find ourselves in today where available jobs vastly outstrip willing workers.

Source: https://www.thebalance.com/unemployment-rate-by-year-3305506

As it was, it took six years for the 40-hour work week proposal to be enacted after it was first introduced in 1932 at the height of New Deal fervor. It seems that many Progressives at that time were worried about how far the long hand of government should go into private sector issues even when there might be logical and strategic arguments to do so considering the unemployment rate.

That concern clearly no longer exists among Progressives in this country.

If they have a strategic plan it can only be to totally destroy the private enterprise system and the society that has provided the richest economy in the history of mankind.

And they seem to be working overtime to do it.

Those of us that retain some common sense need to work overtime to make sure they don't do it.