Accelerated Bad Trends
The economy has experienced accelerated trends in the past six months, housing, used cars, and lumber, and even patio furniture seem to be in a steady but constant price increase.
There is a lot of the media right now about enhanced unemployment hurting businesses, and we agree with it to some degree. However, while researching the possible impact of enhanced unemployment, came back to the idea that labor participation in general has been in a downward trend since the 1960s for male participants, and female labor participation has been almost flat since the 2010s.
Labor participation is a well-studied but ill-understood phenomena. In theory all labor participants should be willing to work at a given wage level, however there are some factors that distorts this dynamic:
For men, the disappearance of many manufacturing jobs and the increase of retail jobs with lower wages have incentivize many men to sit on the sidelines. For Women, childcare and the unfair burden they carry when starting a family have push women out of the labor market.
The Pandemic might have accelerated the trend for both men and women participation in the labor force and therefore accelerated the need to find a solution, male participation might go up with an increase in infrastructure spending and female participation will only go up with an increase in subsidies for childcare and expanded early education.