BOSTON, Nov 17 (Reuters) – Millions of “gig” workers may not be accounted for each month in U.S. government employment reports, which Federal Reserve officials say will affect the job market and its This could affect how inflation risk is assessed.
Whether they’re driving for Uber to make ends meet or taking piecework jobs after retirement, temporary contract workers are self-employed, according to research prepared for the Boston Fed’s Labor Market Conference. It turns out that many people do not consider themselves “employed” or even part of the workforce.
As a result, they answer government survey questions in a way that can significantly undercount the people who are working, said economist Anat Bracha, associate professor at Hebrew University Business School in Jerusalem and senior at the Boston Fed. Economist Mary A. Burke concludes: The research paper will be presented at Friday’s conference.
The number could be in the hundreds of thousands at the most restrictive estimates, or as high as 13 million, including perhaps a 5 percentage point change in the proportion of the adult population working at least part time. There is also gender. Banks are watching closely.
While this indicates that the labor market may be “tighter” than we thought at any given time, the researchers found that the economy actually has room to increase jobs and production without causing inflation. He said he feels that means something, and that this is an example of the Fed giving more to the labor market. A room where you can run.
Specifically, in the years before the coronavirus pandemic, “inflation was not accelerating, despite the substantial amount of hidden informal work that we document,” Blaha and Burke write. . As a result, “the standard of full employment could simply be adjusted upward.”
The study included reviewing detailed responses to the New York Fed’s survey on “informal labor” from 2015 to 2022.
A comparison of one section of the survey targeting jobs and contract work obtained via online platforms with another section similar in structure to the Department of Labor’s monthly employment survey found that responses were often not tracked. There was found. As a result, millions of people could have slipped through the statistical cracks.
This is critical data for economists who have spent the past decade debating, rehashing, challenging, and revising the long-held idea that inflation is often driven by low unemployment and concomitant increases in wages and spending. It’s a gap.
As Blaha and Burke pointed out, the unemployment rate continued to decline throughout the 2010s without inflation rising, a fact that caused the Fed to reconsider its approach to monetary policy. He urged people not to assume that inflation will rise. There has been no dramatic increase in the unemployment rate recently, and inflation has been declining.
greater possibilities
Federal Reserve Chairman Jerome Powell and other U.S. central bank officials still see a link between unemployment and inflation, and feel they need to increase labor market “headroom” to control inflation. There is.
But how much slack is there?
As of early 2013, most Fed officials believed the “long-term” unemployment rate, a measure of unemployment consistent with the central bank’s 2% inflation target, was between 5.0% and 6.0%. . In projections released in September, Fed officials had put it at between 3.5% and 4.3%, a dramatic change.
Without some dramatic change in immigration policy, is the U.S. likely to experience a permanent labor shortage, or will we enter an era of telecommuting, new automated technologies, and other job market conditions? The pandemic has perpetuated this issue as the Fed attempts to assess the Change results in more and more productive workers than expected.
For example, the total number of working women exceeded its pre-pandemic peak of 74.9 million in January, after concerns that the pandemic would permanently restrict women’s employment, and an additional 1 million since then. increased. The participation rate among women aged 25 to 54 reached a record high of 77% this year.
Researchers at the Boston conference say women could contribute more to the country’s labor supply by strengthening family and childcare policies.
Some studies have looked at how job training and policies can help hire people with criminal records.
Braca and Burke said they could also offer more to gig workers. Their research found that many gig workers want additional formal employment, suggesting further growth in the untapped labor supply.
“Our results indicate that potential hours worked and potential GDP were likely higher in recent years compared to official employment estimates,” the researchers wrote.
Boston Fed President Susan Collins said in her opening remarks at the two-day conference that employment estimates are central to the Fed’s ability to achieve its dual mandate of stabilizing inflation while maximizing employment. He said that it is important to understand the value correctly.
Collins said that if the labor supply is higher than expected or is likely to expand as the job market tightens, “this may call for monetary tightening, even at high levels of economic activity during such periods. “Additional price pressures may not arise.” “And higher levels of activity and participation benefit those entering the labor market and contribute to a vibrant economy that works for everyone.”
Report by Howard Schneider.Editing: Dan Barnes and Paul Simao
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