Monday, July 9, 2018

The headline writer at The Hill gets it wrong, but the article author gets it right

People returning to labor force in droves — a key step for the economy, says the headline, but the article says no such thing.

The story author makes many astute points, which the headline writer obviously doesn't understand.

The labor force is growing, but gradually, as is the percentage of the population actually working. We ought to have north of 62% working as was true before the Great Recession instead of 60% now, but the direction is up, if gradual.

This means we are NOT at full employment. People who dropped out are dropping back in, looking for work, and finding it, gradually.

This is dispelling the myth that the decline in the labor force was structural, and permanent. It isn't.

This also explains why wages aren't rising dramatically. Employers still have bodies to choose from as people who formerly sat on the sidelines get back in the game. Employers still do not have to pay dramatically higher wages to keep the employees they have. They still have employees to choose from.

In a nutshell, it's not a boom, but it is overall a return to the right direction.

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