- by New Deal democrat
Imagine a game like musical chairs, except that some players are the chairs (employers) as well as people who want to sit in the chairs (potential employees), and players, both sitters and chairs, are continually entering and exiting the game.
The game would be in equilibrium if the number of sitters and chairs are always equal. If there are more sitters than chairs, sitters will be unsuccessful (unemployed). If there are more chairs than sitters, the chairs will be empty (unfilled job openings). In the former case, we would expect wages to go down (or at least increase more slowly vs. inflation); in the latter, we would expect wages to increase more sharply.
The JOLTS report for November, released yesterday morning, continued to show that there are far more chairs than there are those wanting to sit in them. As a result, wages have continued to increase sharply - even accelerate a little more.