Unemployment is pretty low right now, it’s going to rise when interests rates go up.
I don't think there's enough slack in the market to allow for it. The pinch is going to have to happen in real estate or admin pay, unless you can run a business with zero employees. We might try and pivot to serfdom by way of non-compete contacts. But we don't have enough warm bodies to tolerate layoffs.
At a certain point, the Labor Theory of Value raises its ugly head.
I don’t think there’s enough slack in the market to allow for it (...) But we don’t have enough warm bodies to tolerate layoffs.
I don't really understand what you're trying to say, but but you can't deny that more people will become unemployed as more businesses go bankrupt, which undoubtedly is going to happen when interest rates go up. In 2021 there was a historically low number of bankrupcies , because the low interest rates kept zombie-companies going. When interest goes up, those companies lose their only lifeline. Other companies won't be willing to hire all the newly unemployed workers and thus a bigger reserve army of labor will "discipline" workers in to accepting worse employement-conditions.
you can’t deny that more people will become unemployed as more businesses go bankrupt
Demand for stuff will persist. We already did a huge business consolidation over the 90s/00s. Unemployment didn't fall, people just started working for larger businesses. Hell, the COVID crash failed to produce any long term unemployment. It just accelerated retirements, further contributing to the labor shortage of today.
The real pinch will happen in the real estate market, as the threat of bankruptcy drives down rents.
Interest rates were already low when COVID hit and we still had a short term spike.
But the spike created a long term worker deficit. It wasn't just the interest rates. There was a real surge in labor demand, particularly in the tech sector.
A rise in rates will force a pinch in other sectors. There's no more room to cut staff without giving up significant profits.
the rising price of labor, and the success of unionization efforts and other labor actions
Both of these things can be explained by low unemployment as a result of low interest rates: lower unemployment increases the bargening position of workers, resulting in better pay and a higher succes-rate of collective action.
I don't think there's enough slack in the market to allow for it. The pinch is going to have to happen in real estate or admin pay, unless you can run a business with zero employees. We might try and pivot to serfdom by way of non-compete contacts. But we don't have enough warm bodies to tolerate layoffs.
At a certain point, the Labor Theory of Value raises its ugly head.
I don't really understand what you're trying to say, but but you can't deny that more people will become unemployed as more businesses go bankrupt, which undoubtedly is going to happen when interest rates go up. In 2021 there was a historically low number of bankrupcies , because the low interest rates kept zombie-companies going. When interest goes up, those companies lose their only lifeline. Other companies won't be willing to hire all the newly unemployed workers and thus a bigger reserve army of labor will "discipline" workers in to accepting worse employement-conditions.
Demand for stuff will persist. We already did a huge business consolidation over the 90s/00s. Unemployment didn't fall, people just started working for larger businesses. Hell, the COVID crash failed to produce any long term unemployment. It just accelerated retirements, further contributing to the labor shortage of today.
The real pinch will happen in the real estate market, as the threat of bankruptcy drives down rents.
Because of low interest rates. Unemployment will go op if the fed raises interests.
Interest rates were already low when COVID hit and we still had a short term spike.
But the spike created a long term worker deficit. It wasn't just the interest rates. There was a real surge in labor demand, particularly in the tech sector.
A rise in rates will force a pinch in other sectors. There's no more room to cut staff without giving up significant profits.
And what's your evidence for that claim?
Personal experience, anecdote, the rising price of labor, and the success of unionization efforts and other labor actions.
Both of these things can be explained by low unemployment as a result of low interest rates: lower unemployment increases the bargening position of workers, resulting in better pay and a higher succes-rate of collective action.
We had low interests rates as far back as 2008. We're only just now seeing labor actions 14 years later.
The low unemployment isn't just due to lending. There's a serious shortage of physical bodies.