i didn’t say it was
what matters is that we know they do and are on payrolls
the only question is the number.
Allan
a number we can never know.
Allan
youre helping me make my point. thanks
Well you if it explains the decline in ADP Over the last few months it’s about 40,000 fewer than this summer.
Is threre now a labor shortage of 40,000 in those industries?
i dont acknowledge that it would create a labor shortage
How can the employed population decline by 40,000, demand remain the same for that service, and no labor shortage be created?
how do you know the demand remained the same?
you just kinda slipped that in there huh.
Why would demand fall? Did businesses just no longer need workers?
no. but that doesnt mean they are replaced. illegal labor is cheap
That 40,000 is a tiny bump.
Most probable explanation
- Fed prints money
- Money becomes cheap
- Employers decide, “Hey, money is cheap, might as well take a risk and hire a few more summer workers.”
- Turns out to be a bad idea. Money was misallocated.
- Once again, Fed policy was as effective as a broken window.
“Yay, let’s break a whole lotta windows. We’ll really grow the economy!”
.
These people weren’t let go based on decisions by the business. They were removed by government. Your claim is akin to saying the employers needlessly maintained people on their payroll, a dubious idea at best.
Is the misallocation of resources a dubious idea?
I believe the following happens often:
- Gov’t (including the central bank) adopts a bad policy
- Businesses respond rationally, but it does not work out for them or anyone else.
I believe “markets are rational.”
I do not believe "All business decisions always succeed 100% of the time, nor “Everything every private sector actor does is 100% correct 100% the time.”
EX 1:
Gov’t enacts a bad policy triggering a bubble in the stock market, the employment market or the housing market.
EX 2:
Gov’t enacts a price cap, or quota etc. As usual the policy turns out to be bad.
In each of the above examples, private sector actors repsonded to bad gov’t policy by doing rational things that did not work out. It is an axiom in all non-Marxist schools of ecomomics that such things happen.
So the simplified argument here is that companies over-employed people based on cheap money, and then the government came along and solved this allocation problem by removing the employees.
Then the companies realized they didn’t actually need the employees.
Ok then
Please explain this.
No.
The simplified argument is NOT that the gov’t recognized their mistake and then fixed the bad policy/
TEMPLATE;
Gov’t enacts a bad policy like rent control.
Private sector malinvests resources.
The investments fail. They don’t succeed.
Nothing in that template involves the government later recognizing the mistake and fixing it.
Governments can, and often do, continue bad polices for years, even decades
- NYC rent control, (1920s - present),
- agricultural subsidies,(1930s -present)
- Soviet price contiols (1917–1991)
So the government didn’t recongnize the mistake, but as it turns out the government policy of taking away employees helped the company see they didn’t actually need those 40,000 employees.
Ok.
All your intentional misstatements of my beliefs are getting confusing.
(For reference: I believe that a change of 40k employees is a statistical wiggle, but if we must find a cause, the government is, as always, the most likely culprit._
You know that the ADP does not count government employees right?
Simple.
Some business ventures fail.
Sometimes the new Coke turns out to be a bad idea.
Sometimes someone launched “Rocket Pizza” even though they had no business acumen, their only skill set was programming robots for other people.
The teachings of Adam Smith and other capitalists like myself are that the market acts rationally.
Those teachings do NOT rest upon the notion that “every single business decision is the right one 100% of the time, always and everywhere.”