America is fully employed, or so say the statistics. Federal Reserve officials think the job market is strong enough to justify higher interest rates. They’re afraid inflation will get out of control.
But if inflation is a problem, it’s not yet apparent in the average worker’s paycheck. ‘Just wait,’ the inflation hawks say.
Like many economic dilemmas, this one includes several big assumptions. One is that having a job means you have a steady income. Maybe you want more, but you at least have some kind of reliable baseline.
A pile of evidence says that may no longer be a good assumption. If so, Janet Yellen and whoever follows her will be making a huge mistake. We all need to get ready for it.
Persistent Puzzle
We all know people who are unemployed or underemployed – probably more than the stats say we should. Are the official numbers wrong?
Yes, they could be flawed. But even if they’re right, it doesn’t mean everyone is happy about it.
Maybe you lost your job because your company went bankrupt. No other employers in your area need your skills. You can’t sell the house and move because you’re underwater on the mortgage. With no better choices, you take a lower-skilled job at half your former pay.
This post was published at Mauldin Economics on JUNE 13, 2017.
Follow on Twitter
Recent Comments