NPR’s Steve Inskeep speaks with Arin Dube, professor of economics on the College of Massachusetts Amherst, about how wage progress is breaking down some boundaries within the job market.
LEILA FADEL, HOST:
Proper now, on this nation, there is a story of two job markets, so to talk. We reported on lots of high-profile layoffs within the tech and media areas, together with right here at NPR. However different sectors are nonetheless sizzling, and so they’re racing to search out folks. We reached out to companies trying to recruit and retain workers. Lauren Schenning is the expertise acquisition supervisor with Coakley & Williams Building in Fairfax, Va. She says they’re prepared to rent folks from throughout the nation.
LAUREN SCHENNING: We’re a common contractor, so there’s a workforce scarcity within the development trade.
FADEL: Steven Cramer, president of the North American Buyer Service Administration Affiliation in Phoenix, Ariz., says the rising request for distant work is hampering efforts there.
STEVEN CRAMER: Some corporations are actually making an attempt to deliver folks again into the workplace, in order that turns into a problem for the employers.
FADEL: Let’s flip now to Arin Dube. He is an economist with the College of Massachusetts Amherst and a analysis affiliate on the Nationwide Bureau of Financial Analysis. Good morning. Thanks for being on this system.
ARIN DUBE: Good morning. Thanks for having me.
FADEL: So let’s discuss the place the job market is sizzling proper now.
DUBE: So following the pandemic, now we have had a really tight labor market, particularly for low-wage employees. Employees within the service industries – suppose hospitality, for instance, and eating places and motels. This has been a sector that has seen very quick wage progress. And that has led to one thing that is very fascinating. We have truly seen wages rise quicker on the backside than the highest, lowering wage inequality. In order that has flipped the script…
FADEL: Attention-grabbing.
DUBE: …On rising wage inequality for during the last 40 years.
FADEL: So does this, then, make it a extra truthful job market, the place low-wage earners are able to demand higher pay?
DUBE: I feel given how poorly wages rose for these on the backside and the center of the distribution for therefore lengthy, this tighter labor market that has led to sharper wage progress on the backside would appear to be as truthful to many individuals.
FADEL: So is that this breaking down different boundaries, as nicely?
DUBE: Yeah. So one fascinating factor can be that we have seen the hole fall by way of wages of Black employees and white employees, once more, a spot that had been truly rising over many a long time. Equally, now we have seen some discount within the hole between ladies and men, lowering the gender pay hole. So usually talking, a tighter labor market tends to do good issues to employees, particularly those that are much less privileged.
FADEL: Are jobs the perfect indicator when the Federal Reserve appears to be like for clues to inflation, rates of interest, the chance of a recession?
DUBE: Definitely, the labor market tightness has been cited by the Federal Reserve as one probably crucial determinant of rising inflation. I feel in lots of analysis, economists nonetheless stay divided on precisely what position wages have performed. In our personal work, now we have discovered that it is performed some position however not essentially the dominant position explaining the rise in inflation in the previous couple of years. However actually, the Federal Reserve will likely be paying shut consideration to that query.
FADEL: And what do you anticipate to see within the job market within the subsequent few months?
DUBE: So I feel, clearly, there are a lot of variables – exhausting to say. I do suppose that there is some likelihood of – that the labor market is getting much less tight. However total, I feel there is a good likelihood that we will see the smooth touchdown that the Fed has been actually after.
FADEL: Economics professor Arin Dube at UMass Amherst, thanks a lot.
DUBE: Thanks.
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