Better US Jobs – A Revolution Against Low-Paid Work
Mike Konczal (Roosevelt Institute) and Shahin Vallée (German Council on Foreign Relations) evaluated the US labour market at our XI. New Paradigm Workshop.
PUBLISHED10. OCTOBER 2022
READING TIME2 MIN.
Mike Konczal, who leads the Macroeconomic Analysis at the Roosevelt Institute, presented labour market data to describe the post-pandemic economic trajectory in the United States. Here, the economy has bounced back at unprecedented speed after the pandemic. Compared to the Great Recession, people were brought back into work at much quicker rates. Recently, the employment-to-population rate has returned to pre-2008 levels. The labour market recovery has benefited employees across the board and taking account different societal factors. In particular, workers in low-wage jobs have benefitted from high real wage growth. High labour demand has empowered workers in a long time in decades. In addition, fiscal stimulus policies such as the expanded unemployment checks have created opportunities for many Americans to secure higher-paying jobs. This enormous reallocation is sometimes dubbed “great resignation” or even “quiet quitting”, which according to Konczal fails to acknowledge the scale of new jobs created and the economic benefits achieved through higher wage floors. He showed that the US is experiencing the highest job growth in four decades. In his view, this has contributed to a unique recovery and to the reemergence of good jobs.
“There is a real sense that a lot of low-wages workers (...) are finally getting an even stake at the table.”
“There is a real sense that a lot of low-wages workers, who were particularly squeezed by weak and employer-centric US labour law, by the weak recovery and mass unemployment of the 2010s and by technology undermining the capacity of workers to organize themselves, are finally getting an even stake at the table and are increasingly unionizing a lot of work forces who have been traditionally hard to unionize”, Mike Konczal explained.
‘Bidenomics’ policies such as the American Rescue Plan seem to have proved successful in contributing to a full economic recovery. Shahin Vallée (Director of the geoeconomics program at the German Council on Foreign Relations) commented that there might be a lesson for Europe, where policymakers generally seem more fearful of wage-price spirals. Mike Konczal added that corporate markups, especially from firms with market power, are a substantive yet often neglected contributing factor to inflation.