And if Arwa Mahdawi were an economist

That folks don’t know about economics is fair enough - there are blindspots among economists about football, needlepoint, literature and how to get the tops off jars - but there do sometimes occur those moments where economists get told what they already know:

I am not an economist, but it seems to me that one way companies can end the labour shortage is by paying people more and treating them better. A few forward-thinking employers are trying this unusual strategy. For the most part, however, companies seem to be demanding that the government bail them out by creating conditions that give them their pool of desperate and easy-to-exploit workers back. The US’s largest lobbying group, for example, is trying to pressure the government to end unemployment benefits.

Even in the US no one is arguing for the end of unemployment benefits. Rather, the end of the extra payments, the widened definition of who qualifies, which leads to some 25% (some say 50%) of the American workforce having higher incomes from not working. As Richard Layard has been known to point out, if you pay people not to work then people will not work.

But to the larger point being made. When there’s a shortage of labour then why not pay people more? Well, yes, this is what Karl Marx was rabbiting on about with his reserve army of the unemployed. If there are those crustless waifs a’wailin’ outside the factory gates then the capitalists never do need to raise wages in order to gain more labour. Thus improvements in productivity and profits accrue solely to the capitalists.

The moment full employment is reached - something that depends upon the structure of the labour market as to what actually is full employment - then in order to gain more labour to exploit, to expropriate from, the seeker after more labour must offer a better deal than can be got elsewhere. Further, that better deal needs to be on offer to the current workforce to stop their leaving for it elsewhere.

This is the very mechanism by which wages rise with productivity over time. This is the how and why of rising living standards. This coming with our usual observation that if even an economist as odd as Marx can get this right then the rest of us should find it easy enough.

The observation works the other way too. The number of those quitting their jobs for others is a good guide to how close to full employment we are. Which is why the number is tracked in a monthly report. Graphed even. And, if we’re getting a record high number of quits - that indicator of full employment - while we still have an unemployment rate of 5.8% - which isn’t full employment - then we must be doing something to screw up the structure of the labour market as to what actually is full employment.

Seeing one sign of full employment while not having full employment is indeed that signal that something is wrong. Actually, it’s the proof required to start muttering about how the expansion and extension of unemployment insurance benefits needs to be curbed.

That not everyone knows economics is just fine, as with knowing how to take the tops off jars. But it does grate when the “what if?” supposition is exactly the point that economists have considered, have thought through and have come up with an answer to.

Why does the US have record quits and also a high unemployment rate? Because unemployment benefits are currently too high.