Power Shift

As economies around the world start to reopen after the pandemic, American media have featured story after story about employers suffering from a labor shortage—in other words, having trouble filling job openings. Firms across the U.S. are offering prospective hires signing bonuses and higher wages. Economic data reveal an unusually high number of workers quitting their jobs—or saying they’re considering changing their jobs or even careers. But another way to read this data is that workers are gaining greater control over their job choices and their workplace conditions—after a period of 40 years when the real wages of most U.S. workers barely rose, despite huge increases in worker productivity. Is power shifting in the American job market?

According to Mike Konczal, the director of macroeconomic analysis at the New York-based Roosevelt Institute, workers are returning to the labor force under much more favorable conditions. Not only are they securing higher wages, they’re getting more training and a greater say in the workplace. As Konczal sees it, policy choices—such as increased unemployment insurance and spending in pandemic relief bills, as well as increases in the minimum wage in states and cities—are largely responsible for the new dynamic. But it’s unclear whether the stronger position for workers will only be temporary. The keys to lasting gains for workers, Konczal says, are translating momentary individual advantages into stronger collective bargaining power, and not getting complacent when the unemployment rate returns to the pre-pandemic level.

Michael Bluhm: What’s happening in the U.S. job market?

Mike Konczal: As a result of large, sustained, and significant fiscal stimulus, we’re coming out of this recession in a generationally unique set of circumstances. The last three to four recessions largely had jobless recoveries; unemployment would go very high and then very slowly come down.