There’s an article on Jobs and Inflation that posits to explain in laymen terms why full employment doesn’t mean no unemployment posted on Bloomberg today.
Regardless of the basis for initial impressions, I believe I am justified in criticizing it, with a cynical slant or otherwise, starting with,:
If unemployment falls too much, inflation will rise as employers compete to hire workers and push wages up too fast.
This hypothetical is painfully oversimplified, leaving out even broad and generalized details of the circumstances that would cause inflation to accelerate if unemployment falls at the sort of glibly defined rate of “too much”. It is stated with such certainty too…
There really needs to be other supply side factors at work, productivity issues and resource constraints in order the statement to be true, and it seems like a rather far flung assumption to make under the conditions of having near historically low LFPR, with a huge pool of potential employees to tap. Given that many complex factors play off one another in creating inflation, how low unemployment can go before the economy reaches a true full utilization state and inflation accelerates as a result is really just a guess; and inside that guess is a lot of room for error.
More importantly, we’re not talking about filling up landfills here. We’re talking about employment which translates to a means of survival, independence and real freedom for hundreds of millions of people. And this article fails to appreciate that fact or take into consideration what hope there might be for the people who are involuntarily unemployed if the guesses about the meaning of full employment are inaccurate. In the absence of full consideration of the issue at hand, there is a possibility of creating or prolonging unmet basic human needs for large swaths of the population.
To go a little farther, I ask why we are so concerned, nay obsessed, with inflation at this particular point in history as to combat it well after it has been pummeled into the ground and subjugate our fellow countrymen to unnecessary hardship as we encourage the pounding of rumors of individual price rises into the dirt for good measure as a matter of public policy, while maintaining some level of unnecessary unemployment does not help anyone and harms everyone, some more than others.
After reading this hard to finish article, the question comes to mind of whether the elites so worried about a half of percent of inflation getting the way of their consumption that maintaining unnecessary levels of unemployment is worth the pain to average people. Or should I just ask that question of “the swamp,” because I really do not know from whose irrationality and or stupidity this sort of public harm comes in the form of debunked and bankrupt (literally) economic IQ regression.
Speaking of filling up landfills, Bloomberg shouldn’t be littering the internet with such trash.
P.S. A family in my neighborhood lost their lost their home to foreclosure two weeks ago. They had been neighbors since the year 2000. When I drive by the house on my way to work every morning it stirs up memories of narrowly avoiding that same tragedy back in late 2010. I feel very lucky, but at the same time more resolute than ever to be sure that everything that can be done to prevent it is done – starting vanquishing the Phillips curve nonsense.