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Brian Lehrer: It's the Brian Lehrer Show on WNYC. Good morning, everyone, and first of all, thanks to Brigid Bergin, for filling in the last two days. Here we are in the morning where the complicated economic recovery from COVID became even a little more complicated. With another surprising new number as described by MarketWatch. The Consumer Price Index jumped eight-tenths of a percent in April, four times more than economists predicted in a Wall Street Journal poll. That means the April jump pushes the annual inflation rate to 4.2%, the highest since 2008.

Now, this comes after April, surprisingly weak jobs report that came out on Friday, under 300,000 new jobs, fewer by hundreds of thousand than economists had predicted. With the unusual duality therefore of many job openings, but not that many new hires. Those don't seem to fit, fewer new jobs, but rising prices. Then there's the surging growth rate somewhere between 6% and 11% growth in the economy. Wow, but that was expected because things had gotten so slow in the depths of the pandemic, many times close to 0%, that isn't necessarily that big, but it is a big growth rate.

Again, how does it fit in with so many people still hurting, a looming eviction crisis and more? The Federal Reserve to complicate it even more, is predicting it will keep interest rates near zero for years, that's the opposite of what they usually do to tame inflation. Now, one thing we know, the low number of jobs led Republicans to complain that pandemic unemployment benefits are causing people to not take jobs that are available to them forcing President Biden now, to say this.

Joe Biden: Anyone collecting unemployment was offered a suitable job, must take the job, or lose their unemployment benefits.

Brian Lehrer: But it's not that simple according to the President, Biden also said this.

Joe Biden: Americans want to work. Americans want to work.

Brian Lehrer: He also said this.

Joe Biden: Our economy can't achieve its full potential until we get more people vaccinated.

Brian Lehrer: Vaccinated? Since when is that an economic indicator? What the heck is going on with the economy and how might it affect you. With me now, Jim Tankersley, New York Times White House correspondent, self-described economic policy nerd. Author of the book published last year called The Riches of This Land, about the people who built the middle class in this country, and how he says, they are the ones who can get us out of the current economic crisis. Jim, thanks for coming on. Welcome back to WNYC.

Jim Tankersley: Oh, thanks so much for having me. It's a delight.

Brian Lehrer: Can you describe this morning's consumer price index report in some more detail? It's only like an hour and a half old.

Jim Tankersley: Sure. I think that the very basic way to describe it is that we knew there would be inflation showing up this month. Particularly because prices fell a lot last year in the midst of the pandemic at this time. We knew there'd be a big rebound. A year later, the economy is getting back to life again and prices are going up again. The big news out of this report is it's rising faster than we thought, and that's true kind of across the board. It's true that like food and fuel, more volatile parts of the economy, are seeing their prices rise, month over month, not just year over year at a faster rate than forecasters expected. It's also true that things like used cars are just getting much more expensive much faster.

I think the easiest way to read this report is that it's a real sign that right now in our economy, we have a mismatch between the things people want to spend money on and what's available. Whether that mismatch persists and leads to like a long-running big inflationary spiral is an open question right now. Certainly for the moment for lots of reasons that have sometimes very little to do with public policy, there's just a bunch of stuff people want to buy that they can't get enough of and so prices are going up.

Brian Lehrer: We're in such a weird moment of recovery, from a voluntary shutdown of the economy because of the pandemic. How do we know if anything right now predicts longer-term problems or good times?

Jim Tankersley: We don't. I think we know a few things based on some fundamentals of the economy. We knew we were going to see higher year over year inflation. It would look to some degree like a mirage, and there's some of that here, for sure. I think that on the other points, it's really hard to tell and so that's why economists always caution, don't read too much into one month's jobs report or one month's inflation report. Now in particular seems like the right time for everybody to take a deep breath, and then try to wait a couple of months for more data.

We just don't know, for example, if a whole bunch of workers are going to come in off the sidelines and start taking jobs once they're fully vaccinated. We think they will, that's what history suggests but we're not sure, and that number is going up every month. We also don't know if right now, the restrictions that are still in place on things like restaurant capacity, are driving up prices in restaurants to a greater degree than they will be when everybody can reopen fully. Like you said, it's an unprecedented time for those of us who follow this stuff.

Brian Lehrer: Listeners, help us report this story. Put some of your individual stories on the bones of this economic data from the last few days. Number one, are you seeing prices rise, or if you own a store, or otherwise sell things, are you raising prices? If so, what kinds of prices are you seeing rise how much, or what kinds of prices are you raising by how much and why? 646-435-7280. Is anyone not taking jobs that are available to you because of pandemic unemployment benefits? You don't have to use your real name 646-435-7280.

Conversely, is anyone not taking available jobs because of pandemic uncertainty regarding the virus itself, as the President indicated, or your childcare as the President also indicates? 646-435-7280. Is anyone listening right now, an employer having trouble finding workers? Tell us your story. 646-435-7280. Is anyone listening right now not taking available work because the pandemic has made you fundamentally question what you want to do with your life? We're going to talk about that too in this segment, 646-4357280, or your own economics nerd theories or questions for Jim Tankersley, from The Times, at 646-435-7280.

Jim, what do you think of Biden's relating the low job numbers to needing a higher vaccination rate, because people are still uncertain about the safety of many workplaces, we know that, but does it relate to this?

Jim Tankersley: There's definitely an effect. I think whether it is the dominant effect that explains the miss on Friday between what economists had expected and what we actually saw, I'm not fully sold on that. The numbers are stack, it's more from the time that the jobs report data were compiled in mid-April until when they were released another I think 20 plus million Americans got fully vaccinated and that's a lot, working-age Americans. That's a lot of people to suddenly be available, perhaps to go to work who hadn't felt safe doing so. I think obviously, we've seen in the last several weeks is a declining rate of vaccination.

If that is really what is holding people back, I think we will see that reflected in a pretty strong number next month. Okay, people are vaccinated, they want to go back to work, they're going to. As you alluded to, it's not just whether people feel like they are safe going back into the office or taking a job at a restaurant again. It's also about whether they are physically able to do it because they have some somewhere safe to send their kids, whether that's to school or childcare. There I think we still have pretty good evidence that there is a supply constraint in the economy of childcare. That that is holding back, in particular, working women in a way that could be resolved, hopefully in the next few months but could also be a real drag on this recovery.

Brian Lehrer: Let's take a phone call. Linda in Nassau County, you're on WNYC. Hi, Linda. Thanks for calling in.

Linda: Hi. I just wanted to say that my husband is a contractor and a business owner. The supply of things like plywood, anything you need, any kind of building materials, any kind of doors, even the hardware, everything is backed up. Of course, there have been reports on the ports in California having weeks of backup there, and then you put on top of that the whole computer chip problem and the fact that they just didn't produce things last year. Last year was a tremendous year where things just were not produced. If you pull back production, and then you would expect that when the economy starts to open up, and people want to go back to work, and they want to produce, get their jobs done in a timely manner. I f the product for your business is not there is a tremendous mismatch.

Brian Lehrer: This is a piece of it that we didn't even mention, so far, product unavailability, that's something like a contracting business would need in order to go forward. Jim, I'm curious for you as an economics reporter, have any question that you want to ask Linda before I let her go?

Jim Tankersley: First off, Linda, I think you're really well describing a phenomenon we've seen. I'm just curious of your husband business, has he seen a surge in demand for people who want his services over the last few months?

Linda: Of course, yes. Right. People want to fix. First of all they're getting their tax returns back, they got stimulus money. A lot of people in our area have worked all the way through and just happened to be very lucky in that respect. Then the other thing, when you talk about child care, and the people that are unemployed may be holding back. If you look at the amount of money that somebody gets in the New York area on unemployment, you can't survive on it. I don't know, maybe in a very low-income area they could survive on it, but you cannot survive on unemployment in New York. All unemployment pays for its health insurance.

Brian Lehrer: Linda, thank you so much for your call, really informative. Jim to her last point, I read a stat that the only people who refuse jobs are low-paid workers well below the national median income, which doesn't even account for the higher cost of living in an area like New York, those national stats. There's an argument that if lowly unemployment benefits are better than pay at a job, it shows employers are getting over on their workers way too much with low wages. How much do you agree with that? Maybe Linda's call is a little bit of evidence of that, or see it as an analysis of an economic reality in this country of why people aren't taking jobs?

Jim Tankersley: Well, just to step back for a second, I don't think that's what the policy was meant to do. The policy was meant to help people who had lost jobs due to no fault of their own. Then to help people for whom it wasn't safe to return to work yet, and to try to replace their lost wages. It wasn't meant to be a sword wielded at companies to force them to raise wages to get people back. Although some progressives have embraced that argument, I think, in recent weeks. I think it's important to remember, the point here was to try to keep people whole if they were tossed out of the job market.

Then there's a separate question about whether wages are sufficient. I think for a lot of people, they obviously aren't. We have way too many people who earn way too little, not a middle-class income in this country. I think, what is happening right now is much more complicated than that. It's not just, oh, companies aren't paying enough to their workers and they need to do that if they want to get them off the sidelines. It's that there's just been these huge changes in supply and demand, like Linda was talking about. In some places, workers are in huge demand, and they're having to raise wages a lot to try to get people in, and they can't get the materials to sell to the customers that they want.

You're not seeing the boom in construction jobs, for example, you might like to see, because those are very high-paying jobs and their wages are going up. For example, in the hospitality sector, wages are having to go up because restaurants are having to find ways either through signing bonuses. My colleague, Jeanna Smialek, and I wrote about this this week. Signing bonuses, other enticements, to get people to come to work for them because they have more options, or they are able to still collect unemployment or they're still nervous about returning to work and companies have ways of trying to get people over those humps and they're turning to them.

The thing that they do not seem to be doing as of yet across the economy is like wide scale wage increases like what you're talking about.

Brian Lehrer: Let's take another call. James in the Bronx. You're on WNYC with Jim Tankersley, White House correspondent and economics reporter for The New York Times. Hi, James.

James: Hi there. Thanks for taking my call Brian, big fan. One of the things that I don't think is really being taken into account is the individual agency of workers. In the pandemic, for people who didn't lose their jobs, we've had an opportunity to see a different future for what employment could look like. We've had the opportunity to see what a flexible hybrid option is. A lot of employers are just expecting now that vaccinations are up, and wages are back, that workers are just going to be chomping at the bit to return back to work and that's not the case.

I left my job, I took a buyout option during the course of the pandemic, just so I could focus on finishing my master's degree. One of the things that I'm looking for in the job hunt right now is not just a standard 9:00 to 5:00, that's not what I'm interested in. I've had the opportunity through internships to view alternative possibilities. I want that in my future career. I'm young enough that I want that. No employer really seems to be interested in providing that to me at the moment. I'm going to keep hunting until I find it. I'm not interested in going back to work for Starbucks or Chipotle for $15 an hour when the possibility exists for more. Thank you.

Brian Lehrer: Thank you, James, in the Bronx. How about James in Washington, what do you think about that?

James: Actually, my friend, Heather Long, who is an economics writer for The Washington Post, had a really interesting piece on this on Friday. Basically, this idea that there's a great reassessment going on among workers across the economy. People saying, "Hey, I don't necessarily want to go back to the job that I was shoved out of a year ago." I do think some of that has to do with questions of like, remote work and more flexibility. I know big companies, including The New York Times are juggling that with their workers' demands right now.

I also think it's this question of people have a little more ability maybe to step back and take a little bit of time to think about those things, because they've gotten a lot of help from the government over the last year. We've seen typical American savings have actually gone up in the pandemic because of the large amount of government aid. If right now you have a few more weeks to be choosy about which job to take, maybe you're doing that. We don't know for sure in the data that's what's happening. I think it's a very plausible story for why you might see the rebound in job creation to be a little slower than we thought.

Brian Lehrer: Angel in Trenton, you're on WNYC. Angel, thanks for calling in.

Angel: Hi, thanks for taking my call. I'm concerned primarily with the living wage, as well as, is there a different living wage for people whose children are below school age? In other words, people who need to pay for care for their child. It would almost be illogical when taking worker agency into account to expect the person who is taking care of their child now. Not receiving a government stipend if they returned to work, to then resume paying for their childcare. If their child is in hybrid learning, they would now have to be paying an additional sum for a school-aged child who is not being seen in-person in a school district more than two and possibly three days per week.

In order to return to work, they would have to pay more than they were prior paying for childcare, while possibly not even making a living wage. It would almost be illogical for anyone to return to work while making a nonliving wage if they have school-aged children or children under the age of school age.

Brian Lehrer: That's such a great point. In fact, it's one that the President himself makes. He's got this family's plan. That's part of the big two-part infrastructure plan, with affordable childcare to working families and the preschool for three and four-year-olds. It makes intuitive sense. If people have kids in hybrid school or uncertain about September reopenings, plus everything else that Angel just said there from Trenton. They don't know how much they can work, Jim.

Jim Tankersley: Yes. I think actually, this is one of the more overlooked parts of the American rescue plan, the $1.9 trillion aid package that the President signed into law in March. There's actually a lot in there to help with child care, to help lower and middle-income families afford it. There's a tax doubling of a tax credit for it. Then there's this monthly stipend to all parents whether their kids are in childcare or not. Up and down the income spectrum with a pretty high cap, actually. Almost everybody who has a kid in America is eligible for some form of it.

It's not enough to dramatically change the living wage calculation for all parents, particularly parents who are just earning a median income, but there's a lot there. There's thousands of dollars a year there for people and that could make a real difference. That's a one year program that's why the President's pushing for this American Families Plan which would be a much more sustained effort to reduce childcare costs, to give more money to parents to make the expansion of the Child Tax Credit permanent.

The White House, even today is going to lean into that argument and basically say, "Look, we need more of this. We need an economy where parents have the support they need to work to the degree that they want to, that's going to make them more productive."

Brian Lehrer: We're continuing a minute on the weird, contradictory economic realities of this moment and how they affect you, with Jim Tankersley from The Times and your calls. Stay with us.

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Brian Lehrer: Brian Lehrer on WNYC with Jim Tankersley, New York Times White House and economics correspondent, as we talk about all the contradictory new economic numbers out there today. We'll get to the Federal Reserve Board and why they aren't considering raising interest rates if inflation is suddenly a problem. The new Consumer Price Index report that just got released this morning if you haven't heard this, shows prices increasing at a more than 4% annual rate. Which is more than we've seen in this country for overall prices for a long, long time. It may be a blip because of COVID recovery, or it may be something more serious.

This is part of what we're talking about, along with many job openings that people are not taking and things like that. Many people are calling in with your stories. That's great. Our lines are full. Hang on. I'm not going to give the number again right away with many people waiting to tell a story. Jim, you wrote an article yesterday about Rehoboth Beach, Delaware, as a microcosm of the high unemployment yet trouble finding workers. The article called IPA that's not IPO, which is initial public offering, this is the beer. IPA signing bonuses and free subs. Tell us about that story.

Jim Tankersley: First off, I'm from Oregon, and we never mess up IPA versus IPO, really [chuckles]. Second off, sadly I didn't get to go to [crosstalk]

Brian Lehrer: Either can be dark, but anyway go ahead.

Jim Tankersley: Either can be dark, yes. I didn't get to go Rehoboth and drink any beer. My colleague, Jeanna, got to do that while I called people from my house. What we found was really interesting. A lot of employers throughout the course of the last several months have been warning and then increasingly in the last month, have been saying, "We can't get people to come back and we think it's because they want to just stay home and receive their government benefits and not come back to work." We just talked to a lot of economists and to a lot of people, actual employers, actual workers in Rehoboth.

What we found was a little more nuanced than that, that it's true, there are a couple of places that report they're having a hard time getting people because of unemployment benefits, but it seems more like a mismatch. There's a hesitancy from employers to give people actual higher hourly pay, raise their wages, because they don't think this surge in people coming back to our restaurants, or brew pubs, or wherever is going to last. It's like, "Okay, everybody's flush with money and dying to go out. It's going to work through the system, and then it's going to go back to normal."

What they're willing to do is pay people a signing bonus, a one time deal to get them back into the workforce. Whereas workers are expecting, "Hey, this could be permanent and if I'm going to come back off the sidelines I want wages to make it worth my while." There's almost a classic economics textbook mismatch here between what the employers are willing to offer in terms of an actual wage and what employees are willing to take. You end up with what looks like a labor shortage.

Brian Lehrer: Lores, in West Orange, you're on WNYC. Hi Lores.

Lores: Hi, Brian, thanks for taking my call. I'm coming up on a year of unemployment. I lost my job last June. I've been in arts administration for a long time, and everybody knows that industry completely shut down last March. I have a complicated relationship and it's multipronged complications going back to work right now. I send out dozens of resumes and cover letters every week and I haven't gotten anywhere, so I'm doing what I need to do.

Right now I'm looking at, oh, I have a 10-year-old daughter who's in virtual school all week. She's at home and can't be home by herself. The bus line that I would have taken in to take work in New York City shut down over the summer, so I no longer have reliable transportation for a job in the city. Right now we're looking at Yay, Broadway is opening in September, which is fantastic news for everybody. Broadway is the indicator for regional theater, too. Do I take a job outside of my industry if I get an offer next month or do I hang tight and wait a few months and see if things come back and be a part of the rebuild in a post pandemic world?

Brian Lehrer: How are you answering that question for yourself so far?

Lores: I'm not answering that question. There's a lot of anxiety.

Brian Lehrer: That's the problem. Lores, thank you so much. I'm going to go right to Jennifer, who it looks like is calling from the Caribbean. Is that right, Jennifer? And if so, where in the Caribbean? It's a big place with many countries.

Jennifer: I'm in Barbados, Brian. I'm in Barbados but I miss my home New York.

Brian Lehrer: I'm so glad you're listening. Go ahead.

Jennifer: My story is that I came-- Sorry, I came here to find work because America doesn't want to hire older people anymore. Is this a chance to pivot? Is it a chance to give us the opportunity to get back into the workforce so we don't have to leave to go outside to work? Why are we being put aside Jim? Is there a chance?

Brian Lehrer: Calling the guest by name, Jim, it's on you.

Jim Tankersley: No, no I think that that's right. I think what we're seeing is-- I can't hire that many people myself. I don't know that it's on me. The stats tell us that we have seen a wave of what appear to be retirements of older workers in America, because of the pandemic. Either they lost their jobs and they've retired, or they're having a hard time getting their way back into the workforce. I think the longer this goes on that there are 8 million jobs open across the economy, and not enough workers to fill those, the more the opportunity should be for workers who have been in the labor force a lot longer, older workers to be able to successfully gain those jobs.

I think, obviously, this is something that is not new to this recovery. I think there may be a real chance here, especially in the next couple of months, for older Americans who want to get back into the labor force to do so.

Brian Lehrer: Jennifer, are you finding it easier to find work in Barbados?

Jennifer: Yes, I am. I live between the US and Barbados, have been for years. It is crazy that I work remotely, I am tech savvy, I am very astute at business, I do business consulting, and I have tried repeatedly to get work. I'm hoping this is a chance, this is an opportunity for us older girls and guys to get back out there.

Brian Lehrer: Jennifer, thank you and please call us again from Barbados, or if you come back home to New York. Call us again. Jim, she mentioned older workers, you mentioned some things with older workers. Is there a fear of COVID that runs along an age spectrum? Because older people are more vulnerable to getting really bad COVID if they get it, that they're resistant to returning to work for that reason?

Jim Tankersley: I don't know, actually, I haven't seen data on that fear of returning to work broken out by age. What we do know, though, is that older Americans were faster to get vaccinated. If anything, they should have less competition in the ranks of the vaccinated versus younger workers who have had to wait a little bit longer. In particular, I would think that you might see that a little bit, if you're going to see it, you would see it in this month's jobs report for May. Because that's where the gap is starting to close and the younger workers, or younger Americans who want to work and want to be vaccinated are basically catching up now.

There was this window when there really were more people over the age of 50 or 60, getting vaccines than certainly people over the age of 18.

Brian Lehrer: This has been a gender uneven recession with women being hit much harder than men, the opposite of the great recession of 10, 12 years ago. Of course, it's women who also do the most childcare. Our caller Angel, from Trenton was talking about this before, but how do you see the recovery so far in gender terms in the job market. Are the jobs for women that got lost disproportionately coming back disproportionately?

Jim Tankersley: I think what we're seeing in the job market is that women continue to bear the brunt of this child care crunch in the country. Particularly, mothers are just not returning to jobs as fast and that is a real problem for the economy. If we can't figure that out and solve it, we are going to permanently lose, or for a long time lose an incredibly highly skilled group of workers. Who because of social expectations are the ones being forced to bear the brunt of a broken child care system across the country right now.

There's obviously a lot of debate in Washington about what to do about this, but I think the data are really clear. We need and want more women to be able to return to work, and we just haven't gotten there yet.

Brian Lehrer: Here's a tweet that says, "As an architect who specializes in affordable and supportive housing in New York City, we experience incredible difficulty getting appliances and construction materials and increases in prices this year as we were finishing up building." That's just another report from the construction industry.

One more call then we're going to be out of time and we have Mayoral Hopeful Kathryn Garcia standing by Andrew in-- Oh, I think I have a phone's problem. We can't get the caller up, okay. I will ask you a closing question, Jim, and that is the Fed and interest rates. They said recently that they're going to keep interest rates near zero for years to come. Usually, when inflation starts to rise, that's one of the tools for knocking it back down is rising interest rates so is that a mismatch that you can explain?

Jim Tankersley: I think what we're seeing right now is two big things. One, the Fed is looking past these monthly numbers and saying, "Hey, we've got to keep the big picture in perspective here." I think they're very much preaching this idea that a lot of these surges in prices are going to be temporary, they're going to wear off, and the economy is going to be fine.

The second thing is the Fed is willing to tolerate a little bit higher inflation than it has in the past, because we've been having lower than normal inflation or lower than what the Fed considers desirable inflation for going on a decade now. What the Fed is signaling is, "Hey, we're going to keep interest rates low, and maybe let inflation run at 2.5% a year as opposed to their target of 2% for a little while to catch up and keep the labor market hot and keep the economy growing for people."

Brian Lehrer: Jim Tankersley, New York Times, White House correspondent self-described economic policy nerd and author of the book The Riches of This Land about the people who built the middle class in this country and how how they are the ones who can get us out of the current economic crisis. Jim's article that you may have seen in the Times yesterday about Rehoboth Beach, that beach economy as a microcosm of what's going on nationwide now with offering people free subs and IPA beers and stuff like that to get them back to work. Jim really informative thank you so much.

Jim Tankersley: Thank you.

 

 

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