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The Hill: Shaken and Stirred: Back to Work in the ‘Snow Globe Economy’

From The Hill: Two years into the COVID era, the economic data show us creeping back to something like the before-times. We’re saving less, spending more, and getting back to work. While some Americans remain on the sidelines, the number of U.S. jobs is near its pre-pandemic peak. March was the month many employers finally welcomed (or dragged) many of us back to the office. Back to normal? Hardly. Even if we are taking the same elevator up from the parking garage, we are not the same people walking back to our desks or stepping behind the counter. The lauded “V-shaped recovery” — the fastest rebound from a modern U.S. recession — can’t account for our post-COVID brains, where the future of the labor market is taking root. In a recent conversation unpacking what we’ve been through, an economist colleague at the Minneapolis Fed offered up the metaphor of a snow globe: Things are finally settling down, but we’ve been mightily shaken up and we’re not landing where we started. That inspired us to reach out to other economists studying how COVID has changed our approach to work. First, take all this quitting. A record 47 million people quit their jobs in 2021, and in 2022 workers continue to say “hasta la vista” at rates un-heard of before COVID. Now consider that for each of those 47 million, a bunch of coworkers watched them walk out the door. University of California, Berkeley, economist Benjamin Schoefer told us workers are typically oblivious to the earnings of others, even those in similar jobs. We learn when we or our colleagues job hunt or land a new job elsewhere. This happened at an incredible pace in the past two years because of mass layoffs followed by mass quitting. The pandemic was an eye-opening moment — especially for lower-wage workers, when some of these usual “information frictions” fell away. That information can be power. Nick Bunker, research director at the job-search site Indeed, sees the historic quitting trend as a bargaining chip for employees: “You can go to your current employer and say, ‘Hey, look, there’s all this demand out there and all these people are quitting their jobs. It’d be a shame if I left.’” Read more at The Hill.