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The Job Market Is Very Weak And Very Tight

Scott Sumner profile picture
Scott Sumner


  • Employment is still far below pre-pandemic levels, but it’s now pretty clear that I was right. There really is a labor shortage.
  • The labor market is weak in the sense that total employment is low, and tight in the sense that it’s hard to find workers and wages are rising fast.
  • It’s also worth noting that the payroll figures will likely be adjusted upward.

Pensive man working on laptop in office

miniseries/E+ via Getty Images

Last year, I began talking about labor shortages. Lots of commenters suggested that it was just employers griping because they didn't want to raise wages. They pointed to the fact that total employment remained far below pre-pandemic levels.

This article was written by

Scott Sumner profile picture
Bio My name is Scott Sumner and I have taught economics at Bentley University for the past 27 years. I earned a BA in economics at Wisconsin and a PhD at Chicago. My research has been in the field of monetary economics, particularly the role of the gold standard in the Great Depression. I had just begun research on the relationship between cultural values and neoliberal reforms, when I got pulled back into monetary economics by the current crisis.

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Comments (5)

Plan Man profile picture
When you take a economy like the US that is famous for growth, and population growth is largely based on immigration, then remove immigration and retire a bunch of older workers and others who made their fortunes would cause a worker shortage. We can compensate with automation or more immigration.
det.sci profile picture
The government can't afford high rates on this much debt.
With so many Baby Boomers reaching 65 everyday, and there aren't enough people to replace them, it should be obvious for the reason we don't have enough workers.
Green Elmo a.k.a. User 48289781 profile picture
"Full employment is not a fixed number, it moves around due to "real" factors, such as Covid."

In other words, you don't have a clear definition of full employment.
The new full employment is where people need 2 jobs to survive.
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