PAUL KRUGMAN: The revolt of the American worker
Sunday, Oct. 17, 2021 -- In 2021many of our problems seem to be about inadequate supply. Goods can't reach consumers because ports are clogged; a shortage of semiconductor chips has crimped auto production; many employers report that they're having a hard time finding workers. Much of this is probably transitory. But something more fundamental and lasting may be happening in the labor market. Long-suffering American workers, who have been underpaid and overworked for years, may have hit their breaking point.
Posted — UpdatedAll happy economies are alike; each unhappy economy is unhappy in its own way.
In the aftermath of the 2008 financial crisis, the economy’s problems were all about inadequate demand. The housing boom had gone bust; consumers weren’t spending enough to fill the gap; the Obama stimulus, designed to boost demand, was too small and short-lived.
In 2021, by contrast, many of our problems seem to be about inadequate supply. Goods can’t reach consumers because ports are clogged; a shortage of semiconductor chips has crimped auto production; many employers report that they’re having a hard time finding workers.
Much of this is probably transitory, although supply-chain disruptions will clearly last for a while. But something more fundamental and lasting may be happening in the labor market. Long-suffering American workers, who have been underpaid and overworked for years, may have hit their breaking point.
Earlier in the pandemic, people compensated for the loss of many services by buying stuff instead. People who couldn’t eat out remodeled their kitchens. People who couldn’t go to gyms bought home exercise equipment.
But things will improve. As COVID-19 subsides and life gradually returns to normal, consumers will buy more services and less stuff, reducing the pressure on ports, trucking and railroads.
What seems to be happening instead is that the pandemic led many U.S. workers to rethink their lives and ask whether it was worth staying in the lousy jobs too many of them had.
Given these realities, it’s not surprising that many workers are either quitting or reluctant to return to their old jobs. The harder question is: Why now? Many Americans hated their jobs two years ago, but they didn’t act on those feelings as much as they are now. What changed?
Well, it’s only speculation, but it seems quite possible that the pandemic, by upending many Americans’ lives, also caused some of them to reconsider their life choices. Not everyone can afford to quit a hated job, but a significant number of workers seem ready to accept the risk of trying something different — retiring earlier despite the monetary cost, looking for a less unpleasant job in a different industry, and so on.
And although this new choosiness by workers who feel empowered is making consumers’ and business owners’ lives more difficult, let’s be clear: Overall, it’s a good thing. American workers are insisting on a better deal, and it’s in the nation’s interest that they get it.
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