Time March14/March21, 2022 pp18 |THE BRIEF NEWS|GOOD QUESTIONS|”Why isn’t inflation ending? Byline Alana Semuels
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Figure from The Washington Post December 29, 2021
An interesting brief that seems to have identified the root cause of what, according to his thesis-Ron Hetrick-An Economist from Burning Glass-a labor market and analytics company, is an inflation trend that won’t go away until more workers enter the workforce and/or demand for goods and services declines.
Demographically what’s happened is America has, like much of the wealthy world, seen a dramatic decline in birth rate. Consequently, “states like Maine, New Hampshire, West Virginia are already ‘super-aged’ … [and] … the entire U.S. population will be superaged by 2020” says Olu Sonola (Fitch Ratings). Super-aged means that 20% of the population is older than 64.
Impacting inflation even more is that the Baby Boomers, born between 1946 and 1964, have stock-portfolio wealth, high home values and with COVID have opted out early from the workforce. Of the estimated 5 million shortage of American workers, “early retirement account[s] for 3.4 million…” Meanwhile immigration, a source of more workers, has declined from a peak of more than 1.6 million in 2017 to 559,000 in 2021.
Hetrick caps his thesis “If we do not get the boomers back and immigration does not improve, I’m just telling you the math-I’m not sure how we get back to growth.”
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