What the ‘big quit’ tells us about inflation


Why do we work? Why did we choose to do the work that we were hired to do? For most of us, the two questions are simple and straightforward. Yet in the controversy over “great departure” or a “major downturn”, as is well known, is often confused, disrupting the message of inflation and economic policy.

We work because it pays off debt, or we enjoy it, or because the job offers a better way in life than real methods. Our choice of employers is a completely different question. While most people have their own reasons for staying in the job they are given, in the end it depends on how the service is used, including our pay.

The same difference applies to retirement. Leaving a job to get a better job is not the same as deciding to quit.

When people have a good chance and tell their boss, “you can take the job and push”, it is a strong signal of a labor market, which could lead companies to pay more in the coming months with lower prices. results. Mu paper for the Peterson Institute this week, Jason Furman and Wilson Powell, point out that in the US, the resignation rate has already given a positive signal for a pay rise. It is on a regular basis. The Federal Reserve should be aware.

UK has resignation notices, but in the third quarter of this year, Brits told employers to push for a domestic group. This was much stronger than in the past than in the US. This is a sure sign that inflation is not possible as fast as the Bank of England may want and the monetary policy should cool slightly.

If drop prices tell a clear story in the US and UK, the message from the numbers of participants in the labor market is very confidential. Most importantly, there are significant differences between countries.

Italy has long suffered from a workforce of less than 50 percent; France and Spain are also weak in encouraging more people to work. There is no indication that economic policies are too tight here and instead all point to the need to promote more jobs as part of the promotion of participation in the labor market. This could increase the availability and demand in these economies without the obvious consequences of inflation.

The 15+ (%) Covid-19 market participation index has less impact on active participation than it is in the long run in some countries.

For a large economy with more than 60 percent of the workforce – US, UK and Germany – changes in the Covid-19 era are smaller due to long-term developments. The increase in participation in Germany has come as a result of making the work more enjoyable for women. The same in the UK has been driven by the changing labor market and the penalties for the protection of the unemployed. In the US, by contrast, the decline in the number of participants in the last decade has been due to a lack of proper child care for people with responsible care and the development of diseases and disabilities, especially among men.

With the exception of the law that long-term participants are from the US. The epidemic has seen many people decide that the labor market is not theirs, which leads to a the amount of retirement. While this may be a small indication of inflation, it does not indicate a significant downturn in the labor market and a sharp decline in strength.

The major exceptions are the combination of two different issues: the transformation of cheap labor and political neutrality in participation. If you are looking for guidance on rising prices, look for employee engagement and look for what you have left. It’s not a beautiful picture.

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