Last Friday's
Non-Farm Payrolls report came in weak, and immediately that
started a debate about whether the expansion of Unemployment Insurance was holding back the pace of hiring in a significant way.
The evidence doesn't seem to be a slam dunk either way. There's certainly a lot of anecdotal evidence that all kinds of retailers, restaurants, hotels and other parts of the service economy are having a hard time hiring. That we know.
On the other hand, Leisure & Hospitality Employment actually accounted for more than all of the jobs gained in the month, with the sector adding over 330K people. Other sectors, on net, lost jobs. So that doesn't scream tight labor markets caused by UI.
On the flipside, this sector bore the brunt of the job losses. And there's still a big hole to climb out of relative to pre-crisis levels. So you could make the argument that, given the pace of reopening, we would be seeing much faster job growth in the absence of the UI expansion.
It's also a possibility that there are other factors constraining supply besides UI, such as availability of childcare and the ongoing hesitancy to return to workplaces amid a virus.
Regardless of what's going on, the whole debate is very revealing. It's obvious that many people (businesses owners, but also economists and general observers of the world) just take it for granted that there's always going to be a virtually unlimited supply of cheap labor. Just like people assume that when you turn a faucet water will come out, people assume that if a restaurant or a store puts up a Help Wanted sign, they will be inundated with applications. When a tech company is looking for an engineer we assume they're going to have to fight tooth and nail to fill the position. People don't make that assumption when a restaurant is looking for waiters.
Acknowledging this reality precedes the whole UI discussion. Alex Press at
Jacobin has a report on the litany of allegations of labor law violations against Chipotle in New York City and elsewhere. Among the allegations is that the company didn't comply with laws regarding predictable worker schedules. Even if you take a completely laissez-faire stance towards labor, and believe that any employment contract entered into is voluntary, that doesn't change the fact that numerous modern business models are predicated on there being a pool of precarious workers with minimal bargaining power. Whether it's fast food, gig-workers, e-commerce warehouses, their existence is assumed.
So for the first time in awhile -- whether it's due to UI or not -- we might be getting a glimpse of what an economy looks like where that can't be taken for granted, and businesses actually have to scramble to find labor, or in some cases maybe it isn't available at all.