Expanding benefits, especially more vacation time and paid family leave, helps explain job shortages and declining productivity. 
During the Pandemic, Average Hours Rose. And Fell.
The Atlanta Fed reports During the Pandemic, Average Hours Rose. And Fell.
According to payroll survey Data from the US Bureau of Labor Statistics (BLS), average weekly hours per job rose during 2020 and 2021 and have since returned to close to their pre-pandemic average levels.
However, the payroll survey’s measure of average weekly hours is an estimate of the average hours paid per job, not the hours worked per job. Looking at hours worked provides a better perspective on the supply of hours going into producing goods and services in the economy than looking at the hours paid does. To estimate average hours worked, the BLS adjusts the payroll survey’s hours-paid data to an hours-worked basis (and broadens the scope to include self-employed workers). The adjustment accounts for paid time off (sick leave, paid vacation, holidays, and family leave) as well as unpaid, off-the-clock hours worked.
This measure of average hours paints quite a different picture from the payroll survey measure: not only is it lower than average hours paid, but the gap between the two measures has grown as average hours worked has drifted lower—especially after 2015. Average weekly hours worked was 33.7 in 2006, 33.5 in 2015, and 32.8 hours in 2023. As a result, the gap between average hours paid and average hours worked has increased by almost an hour a week since 2006.
The primary driver of the divergent trends in hours paid and hours worked is the increasing prevalence of paid time off as a part of employee compensation.
A Word About Productivity
Many economists believe productivity numbers are understated. I have not been in that camp.
This data along with demographics (boomers retiring, replaced by less skilled workers demanding more benefits), explains the productivity picture.
I downloaded supplemental data to create the following chart.
Percent of Civilian Workers With Benefits
The percentage of people with paid sick leave, wellness programs, and especially paid family leave is on a tear.
The only thing declining is medical insurance, down over five percentage points since 2013.
Health Care Costs Are Soaring, So Why Does the CPI Show Falling?
In case you missed it, please note Health Care Costs Are Soaring, So Why Does the CPI Show Falling?
Hello Obamacare advocates, the decline in medical insurance should send a message about affordability.
Unfortunately, it won’t.
Job Quits by Sector in Thousands
30 Percent Raise Coming Up!
Quits rose in Leisure and Hospitality, and Accommodation and Food Service. Quits generally declined elsewhere.
The number of quits in L&H and food service is elevated. Those groups cannot work from home and will readily jump for higher wages.
For discussion please see Minimum Wage for Fast Food Workers Jumps 30% to $20 Per Hour in California
If McDonalds pays $20, why take $15.50 elsewhere?
New Corporate Ultimatum: Come to the Office in 3 Days, Quit, or Be Fired
Despite the above data, white collar employers have finally had enough with work-at-home benefits.
As noted on October 22, the New Corporate Ultimatum Is Come to the Office in 3 Days, Quit, or Be Fired
Of course, that does not apply to restaurants and the hospitality sector whose workers never had the chance to work at home.
Workers Hammered by Inflation Again as Real Earnings Sink 0.4 to 0.6 Percent
On September 13, I noted Workers Hammered by Inflation Again as Real Earnings Sink 0.4 to 0.6 Percent
I do a post like that nearly every month for years.
Regardless of whether or not increases in wages and benefits are justified, paying people more to produce less is a decline in productivity and thus inflationary.
To those pissing and moaning, as if I do not understand what’s going on, please see:
Workers Hammered by Inflation Again as Real Earnings Sink 0.4 to 0.6 Percent
link to mishtalk.com
Every Month I do a report like that. Every month for years!
Yet, at the same time I stand by what I said, the increase in wages and benefits reduces productivity and thus is inflationary.
I know that productivity takes a hit every time management tries to improve it with a new policy or online paperwork. Employees who were highly productive now have to re-learn processes. People early in their careers become distracted from expanding their subject matter knowledge to learn how to fill out paperwork for a management team that still won’t know what to do with all the data in front of them. Contractors are paid lots of money for their skills and spend time ramping up for every gig. Technology is moving too fast for organizations to keep up with the pace of tool development.
All great points, and I feel we can also add in the potential attitude change of once productive team players, to why bother attitudes.
I also feel as though, intended or not, technology has played a negative role in many cases, and helped add to the detriment of a new program or role out.
The constant feel to have to keep up, and do better, causes many to go way outside their lane, and in some cases fail as a result.
Sorry… got lost in it as usual.
It’s really hard for me to compare any of the raw numbers from 25 years ago, and forward to today. They have been so skewed in so many different ways, that it makes it very difficult to be compared in so many ways.
Just a few examples over the past 5 years alone, shows how bunched up everything is to even attempt to makes sense out of it.
A large segment of the population, has had “Many Payments” stopped, but exactly for how many, for how much, for how long, for when started up again, Etc. is a total mystery. We are talking Monthly Rent, Student Loans, Co-Signers of Debt, and so much more!
How do all of these open ended, unimaginable, ever changing Numbers and Rules get factored into any equations correctly, or even close is a mystery to me…
This comes out today:
– The Biden administration appears to be moving toward a narrower student loan relief plan, months after a Supreme Court ruling.
> You don’t really even have to work at this crap. They are so reckless, so emotional, so unattached and disengaged, that it’s like shooting fish in a barrel…
Living standards have been going up worldwide for several hundred years. There are many reasons for this, but a short list would include: better education, science and tech advances, and an abundance of cheap fossil fuels.
Of course the improvement in living standards is not an upward straight line, has plenty of ups and downs along the way, and is not very evenly distributed worldwide. Largely because of educational differences.
Mish is identifying some demographic forces that are currently making it difficult to improve living standards in the US. There are plenty of other forces at work as well.
However, there is nothing that an individual can do about these forces. All an individual can do to improve their personal living standards is to keep improving their education, knowledge and skills and then apply those improvements.
That’s my focus. Always trying to learn more to improve my personal situation. Another good day in the markets today.
Papa, in your list (better education, science and tech advances, and an abundance of cheap fossil fuels) you failed to list the new ability to speculate endlessly on the stock market, making piles of money and contributing little to nothing to society. Yes it is a better life, but only for the winners, for a while. It would be better to fund IPOs or purchase new issues where the money goes to the companies. Even new issue corporate bonds (gulp) would be better.
I failed to mention thousands of other worthwhile endeavours. That does not mean I do not participate in them. My focus was on the primary reasons for living standard increases.
In addition, I am very content with the positive contributions I have made to the world over my lifetime.
As I frequently say, the world would be a better place if we each focused on improving the lives of our selves, our family and our friends. That is far better than sitting on your butt and complaining endlessly about things you cannot change.
Again, my focus here is primarily on increasing “my” wealth. I don’t really care if that bothers you.
Another good day in markets for me. Sweet!
Please let us know about all the new issues you are participating in, to make the world a better place. I would like to follow your actions.
Right on!!!
PapaDave, not sure how you got to the conclusion that education is the answer. Look around and see that education with lots of debt gives you a McDee job flipping burgers.
So since theoretically Mcdonalds will have all the help it can use and hence faster service perhaps they can offer a few menu items that dont send me straight to bed after eating them. Which is why I dont go there unless its before bed. But since the lockdown you cant find one in my area open past 11pm. To be fair I wouldnt want to deal with all the drunks either.
Amazon prepare army of 750,000 robots to eliminate human workers.
link to naturalnews.com
No more hair in my curly fries.
Next up, Amazon prepares an army of robots buying stuff from Amazon on credit.
Oh, wait…
The interview of Danielle Dimartino Booth on the Todd Sach show was very informative. they discuss housing, student loans, auto repos, job openings, etc. was very informative and worth listening to. We’re in for some major changes between now and 2025.
link to youtube.com
She’s a rare voice of reason from someone inside the system for sure.
But what I’ve come to realize over the years is that reason, caution and responsibility aren’t the forces ruling the world.
It’s speculation, crony capitalism, corruption, central planning, deficit spending and financial repression.
When even macro data isn’t accurately reported then if it appears nothing can be trusted, well….nothing can be trusted.
This is why I like reading these posts. It gives me insight that these stupid headlines are just propaganda.
Revision after revision, it’s almost as if reports are released for headlines and political purpose, rather than stating fact.
And as Mish reports, that’s been going on for decades.
The fact is that real earnings aren’t keeping up with inflation.
Not even the manipulated rates of inflation, because if you put back shelter, food and energy in the basket, my oh my…..it’s a disaster.
At some point, something will break.
If it isn’t 22% interestrates on creditcards, 8% mortgages 7 to 12% on carloans on top of ridiculously inflated new carprices, retail-theft, rising unemployment,
or record low levels of housingaffordability…it’s going to be social unrest.
I don’t think I’ve ever seen this much chaos everywhere.
And I have a gutfeeling that it’s going to get far far worse.
Chaos never sets foot off the asphalt. Rural life is secure behind well armed patriots.
If you don’t have a well and septic you’re not independent.
(Ok, cistern and cesspool, but they’re nowhere near as nice.)
Just came back from D.C . Food prices were 30 % higher than my semi rural hamlet in So. Oregon. We were there for a week . During that time there were 5 murders . One policeman was purposely run down and had his legs amputated according to nightly news there . Another officer was shot in the chest and in critical ( perp was killed) and another officer was gut shot walking into the station to begin his morning shift . All in 6 days . To me that crime capital is the canary in the coal mine to watch for civil unrest . The “defund the police “ mayor is currently doing a u- turn . I will also be watching for hijacked food semi trucks .
My town has very few rentals available,as I would imagine a lot of towns across America have . What are we going to do with another 5-7 million economic migrants streaming across the border ? As I write another 5 thousand or so are making their way north to the land of wasted wealth .
Bidenomics is insanity running amok
Inflation is always and everywhere a monetary phenomenon –
Uncle Miltie
Not about the butcher, baker, candlestick maker.
Friedman’s observation was superseded by Jim Rickards who showed how lots and lots of money was created but never released into the economy, creating no inflation — thereby making “monetary phenomenon” incorrect. Then Jim said inflation is indicated by the increasing velocity of money (velocity of M2 — check the graphs), which dropped like a rock the last few years giving us zero inflation. Then the inflation of 2022 & 2023 occurred but the velocity of money was still dropping, so I really dont know who to listen to anymore concerning what causes or indicates inflation. They’ve all been wrong.
The route to true happiness:
link to smbc-comics.com
LOL, I wish I could post a picture of myself this morning. I love this.
The funny, it is very true.
Good Grief
Do you ever read anything I post or do you just complain when I do not repeat myself in every post?
Try This for starters.
Workers Hammered by Inflation Again as Real Earnings Sink 0.4 to 0.6 Percent
link to mishtalk.com
Every Month I do a report like that. Every month for years! Get a grip.
They are paid more in nominal terms to do less work.
You are pissing and moaning as if I never discuss real terms, accusing me of not understanding.
My headline is 100% accurate. The average person does not even understand Real.
enough of this
I’m also amazed by the rethoric coming from a tiny minority that ‘works from home’.
Somehow, they’ve magically come to believe this is sustainable.
Or that it’s a human right to work from home.
Who exactly can work from home?
-Plummers?
-Carpenters?
-Surgeons?
-Health care personell?
-Factory workers?
-Construction crews?
Or is it perhaps a tiny group of keyboard magicians that work in the tech-sector and have relocated to rural areas and overpaid for a property that they’ll lose for sure when reality returns?
I feel like we’re still dealing with the delusional period during and after the pandemic.
But employers aren’t messing around anymore and demand a return to work.
It’ll be interesting to see how this will end. But it will end.
Thanks for the ad hominem Greg.
Clearly you’re not reading what I or Mish wrote and clearly you have some issues with my take on the work-from-home insanity.
That’s fine.
How did we possibly manage prior to the last three years?
Somehow, working from home will solve everything?
Shortage of workers or increase in prices will all magically be solved by working from home?
What exactly has working from home to do with inflation, high cost of hiring a professional?
I’m reading your comments and I just can’t connect the dots or follow your logic,
other than the fact that the last 4 years have dramatically changed society.
Perhaps the work from home crowd has completely lost touch with reality AND people, which would perfectly explain your comments.
In my experience…. over the years I’ve gone from an office, to a cubicle, to a smaller cubicle, to an open office desk, to an open office shelf. I laid down the law, said I was being paid to do very taxing and complicated work and I required space for about 50 books, quiet, and decent computer monitors. Said I had all of that at home and none of that at work, and I wasn’t going to take a hit for the project going sideways because I couldn’t be productive. Surprisingly, I have to come into the office only one day a week. Of course, that reduces my productivity by 20% since it’s impossible for me to accomplish anything but I can understand why my boss would want to see if I’m still alive and a “team player”.
I suspect the deterioration in the quality of the workspace has been an issue in reduced productivity, if it really is reduced. I’m not less productive because I get a few extra days of vacation each year.
The “kitchen table” concept of “open” office space has been a disaster for years. I was an early victim in these experiments and like you pointed out it progressed to the point of a huge open space surrounded by a few “fishbowl” glass walled meeting spaces. Just a free for all, no reserved space, find an open spot style of “office” is absolutely the worst.
We have regressed back to those old 30-60’s pictures of a vast hall of desks with a typewriter on it and a phone.
Lots of productivity there, the AI produced in that environment should be a winner!
I know a ton of people who work from home, some full time, some half and half home and office. Many of their employers have already gotten rid of the office space, which is reflected in the commercial property market’s woes. Employers include data management for scientific research, health insurance companies, state agencies, and defense contractors.
biden pumps up debt
$25 billion to convert offices to low cost housing
were do I sign up