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.
But the fed and the ECB have only expanded their monetary stimules since then. You can see on their balance which I linked, that they've kept on buying bonds since then, which decreases real interest rates for companies, much more than what's possible trought just lowering the federal funds rate or EONIA (which is what's usually meant when people are refering to low interest rates).
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.
But the fed and the ECB have only expanded their monetary stimules since then. You can see on their balance which I linked, that they've kept on buying bonds since then, which decreases real interest rates for companies, much more than what's possible trought just lowering the federal funds rate or EONIA (which is what's usually meant when people are refering to low interest rates).