The Debt Ceiling
The federal government’s debt ceiling has been back in the news (again). As the government approached its legal borrowing limit (again) the POTUS and the Speaker of the House turned the issue into political theater (again) and each came up with a few concessions (again) while we held our collective breath (again).
Regardless of the outcome of these sorts of discussions and concessions, any such resolution must be approved by the House of Representatives and the Senate. The representatives and senators were on a 24-hour recall over the Memorial Day weekend, which sounds like a good way to get a resolution passed. Who among them would want to spend a lot of time in session over a holiday? As of June 1, a debt ceiling bill had been passed by the House of Representatives and was on its way to the Senate.
Although the NASDAQ has been on an upswing over the last month or so, the Dow Jones Industrial Average and the New York Stock Exchange composite index slipped quite a bit throughout May. It’s about time for the federal government to heed the words of Calvin Coolidge (“The business of America is business.”) and either take some serious action to reduce the debt or eliminate the debt ceiling. Putting everyone on edge over the federal debt every few years is simply unnecessary.
Ten years ago, U.S. employers had 4.1 million open positions. As of March 2023 (the most recent data available), they had 9.6 million job vacancies. Meanwhile, the unemployment rate has been less than 4 percent since January 2022. The U.S. simply doesn’t have enough workers to fill all the available lots.
It’s not hard to see what’s going on here. The baby boom kicked off in 1945, and by 2010 the oldest among the boomers were approaching retirement age. Each passing year saw a few more head for the exit. The baby boom lasted 20 years; we’re now in the 13th year of the wave of baby boomer retirements, so this trend has several more years to go.
Another factor that changed a few things in the employment sector, one unrelated to the baby boom, was COVID-19. The toll in the U.S. was grim; the pandemic resulted in more than 1 million fatalities. By one estimate, 25 percent of the people it felled were of working age. Many others decided it was time to retire. Others left the workforce to care for family and some who were displaced found that they could get by on less than full-time employment.
The outcome? Based on the employment trend from 2011 to early 2020, the U.S. workforce should number slightly more than 160 million these days. The actual level is about 5 million short of this mark (see Figure 1). That doesn’t sound like much, in that it’s a shortage of only 3 percent, but this came after 13 years of retirements related to the baby boom.
The worker shortage is nothing new, but it’s getting worse and it will continue to prevent the economy from reaching its full potential. It also will keep some upward pressure on wages, meaning that the rate of inflation won’t come down as quickly as it would otherwise. On the upside, if the economy cools a bit as interest rates rise, it might not result in a big wave of unemployment.
Let’s Be Careful Out There!
It’s proven that workplace injuries rise during the summer months. Workers are often a bit distracted, thinking about the next weekend or an upcoming vacation. Another factor is the increased use of temporary workers to fill in for workers taking scheduled time off. Everyone can do his part by mentioning this to supervisors and workers alike, putting a little more emphasis on safety briefings, and so on.
Memorial Day weekend is the traditional start of the summer season, so the time is right to put the word out.