The Labor Leverage Ratio, a Measure of Wage Bargaining Power, Is in Retreat

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The Labor Leverage Ratio (LLR) is the number of quits divided by the number of discharges, firings, and layoffs initiated by employers.

The BLS comments “the quits rate can serve as a measure of workers’ willingness or ability to leave jobs.”

The LLR is a refinement to the quits rate.

There is almost no difference between the Private LLR and Nonfarm LLR as the chart shows. Nonfarm includes military and pubic service workers in nonfarm occupations.

Labor Leverage Ratio Nonfarm and Private

This data series only dates to December of 2000.

LLR drops in recessions. Few workers want to quit in search of greener pastures.

Labor Leverage Ratios Select Services and Months

For more on the latest Job Openings and Labor Turnover Summary JOLTS report please see Job Openings and Quits are in a Steep Plunge. The Fed Will Be Pleased.

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Mike Shedlock

You sound almost a little sad that for the first time in 50 years, due to demographics (dropping numbers of 65 and 16 year olds for the next 15 years), labor is actually in a position to get something rather than almost nothing. Minimum wages blown away. Retirement plans. Pensions? People getting health insurance the normal way vs. people getting much more expensive health care thru emergency rooms and Medicaid.

More doom & gloom, however this is today’s ADP report:https://www.calculatedriskblog.com/2023/08/adp-private-employment-increased-177000.html

The proles must be kept down. The Land of Opportunity is only for those born rich.

Our government isn’t known as “The War Party Of The Rich” for nothing …..

Has there ever been a government of the poor?

The only way to increase wealth is through productivity gains. Simply paying more because of supply/demand imbalances is a mirage. Companies pay more, but then they have to raise prices commensurably, so people end up with salaries that buy the same amount of stuff as before.

This isn’t about how much wealth there is. It’s about who gets to keep it.

There have been productivity gains since 1980. What DIDNT happen was an increase in workers wages, which have been flat after inflation since 1980 (40 years!) It would be nice to screw over the rich finally and get some of those lost wages.

yea and we’ve become wealthier. We live far better than we did in 1980.

It’s ok if my union gets more money first. /s

So when Wrong-Way-Joe shut off a large fraction of the supply of oil and its distribution, the mirage kicked in and the effect has now stabilized itself? LOL.

Most voted for it

If this is accurate and the trend continues it would indicate that wage inflation is going to decline which would at least temporarily slow the wage inflation spiral that’s been going on especially in services.

It will be interesting to see how long this pattern continues.

This is exactly what I expected. Inflation will come “down” temporarily or “transitory” and then it will spike back up. It is following the late 70s early 80s inflation paradigm to a T. God help us all if the Fed decides to cut because that will unleash pent up demand for housing and cause a higher wave of inflation.

A combination of retirements, de-globalization, supply chain disruptions, trade wars and overall ego-political instability will rear its ugly head in 2025 and maybe late 2024.

The late 70s paradigm began in 1965 and this is nothing like it. This looks like 2007. Or post-war 1940s.

There are far more parallels to the 70s now. Back then baby boomers were aging into family formation age. Right now Millenials and Zoomers are in family formation age, this is what is driving housing demand and housing prices.

When people buy houses they spend money filling it up with crap. I would say this period is worse than the 80s because we now have 50 million boomers that won’t be working but collecting social security and medicare and on top of that we have 70 million millenaials/zoomers trying to buy houses. There is “double” demand with 1/4 less labor over the next decade.

If you’re not pooping your pants now with how bad things are going to get, you will be soon enough in a few years and you cant think back to this post and wonder why how I knew and what I did to get ahead of it but it’ll be too late for everyone else by then. The early bird gets the worm.

A lot of them have figured out they can’t afford any of that, so household formation will be dependent on the stupid and the wealthy.

Long TP and porta-potties.

If you’re not pooping your pants now with how bad things are going to get, you will be soon enough in a few years and you cant think back to this post and wonder why how I knew and what I did to get ahead of it but it’ll be too late for everyone else by then.

Realist (Papafraud, mpo, imgreenscam, jeffgreenscam) buyhighselllo

Did any poop can come out your pants after you really got it up the poop scoop with your investment in Plug Power. Hopefully no one else got it up the poop scoop either by listening to your advice to buy Plug Power, Ballard Power at the highs a few years ago. Im really curious as to wonder why and how you knew and what you did to get ahead and buy at the high to get ahead of it before everybody else.

https://www.linkedin.com/pulse/anatomy-fraud-plug-power-enron-hydrogen-alexander-richmond/

1) The lowest LLR is in construction. Construction 3y average is also the smallest. 2) Demand for carpenters, roofers, electricians…will rise in FL, GA, and SC.3) Dalia spins counter clock. After Dalia bitchs around FL, GA, SC it might rollover to the east coast to create more havoc for the Insurance co.4) LLR breached 2018 high @2.11.5) LLR Lazer is coming from 2010 to 2017 lows, Once LLR crosses the Lazer it might test 2020 low.6) Demand for blue collar workers is rising. Demand for UAW workers will rise after the flood.

Idalia is hitting areas with little development. Once it hits the more developed east coast, it will be a lot weaker. The increased demand for construction will be a lot lower than for other recent hurricanes.

This is where “quiet quitting” turns into “I better not lose this job”. Seriously, the only way for labor to reacquire the advantage is to make it scarce and hence valuable. Demographically we are in the opposite of what the Boomers experienced where labor was abundant and consequently there was continual pressure on wages leading to decades of wage stagnation. With the natality bust we are looking at a future where labor is scarce and it should be in a better bargaining position vis a vis capital. Massive immigration could nullify it but if history is our guide then draconian immigration restrictions is in the works.

The trade off has always been between food and shelter (labor) and debt payments (capital).

The eternal triangle.

sounds a lot like trickle down economics , and we know how that worked. less debt and more productivity is the answer I think but they will spend, spend ,spend.

There are still 1.5 job openings per unemployed person. Wages will continue to increase. Furthermore, housing costs continue to climb for the majority of workers, and the money to pay for that will only come from wages.

“The Labor Leverage Ratio (LLR) is the number of quits divided by the number of discharges, firings, and layoffs initiated by employers.”

“The BLS comments “the quits rate can serve as a measure of workers’ willingness or ability to leave jobs.”

The LLR is a refinement to the quits rate.”

After all: Abandoning the Titanic for the North Atlantic, sure was a sign of how much “leverage” those crewmembers had…..

You can’t make this level of utter stupidity up……. The cluelessness is genuinely beyond imagination….

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