This analysis shows no role played by wage levels. After all, if there is a shortage of candidates (supply) relative to vacancies (demand), one would expect the price of labor (real wage) to rise. Unskilled wages are where they were before the pandemic while profits have risen:
Looking at the chart in the article it seems that recently the gap between vacancies and unemployment rate has been closing by falling vacancies. It would seem that businesses are deciding to go without new hires. Could it be that the vacancies reported are those that companies would *like* to fill for pre-pandemic real wage levels, but can't fill in today's world without going back to pre-pandemic profit levels?
Who should do what on the basis of your finding that the labor market is inefficiently tight? The Fed should not reduce the EFFR?
This analysis shows no role played by wage levels. After all, if there is a shortage of candidates (supply) relative to vacancies (demand), one would expect the price of labor (real wage) to rise. Unskilled wages are where they were before the pandemic while profits have risen:
https://mikebert.neocities.org/HS-dropout-wage.gif
Looking at the chart in the article it seems that recently the gap between vacancies and unemployment rate has been closing by falling vacancies. It would seem that businesses are deciding to go without new hires. Could it be that the vacancies reported are those that companies would *like* to fill for pre-pandemic real wage levels, but can't fill in today's world without going back to pre-pandemic profit levels?