Daily Archives: February 24, 2022

This week, as South Africa awaited the budget speech to hear what the government deems as the countrys financial priorities for 2022/23, small-scale fishers from the West Coast were preparing to go head-to-head with Searcher Geodata in the Western Cape High Court on Thursday.

The goal is to end the companys seismic operations, which pose a significant threat to coastal livelihoods. Anyone who still touts oil and gas as a positive game-changer is conveniently ignoring how resource curses have already led to a significant deterioration in living conditions in a number of African countries. Research showing this should be evidence enough that investing in oil and gas will not improve South Africas economy.

Research indicates that on average, countries with an abundance of non-renewable resources (or minerals) tend to suffer from the resource curse, which means they have lower levels of economic development and growth than those without such resources. In addition, countries rich in extractive resources such as South Africa tend to have higher levels of inequality, lower levels of democracy and increased levels of corruption.

The reality is that these countries tend not to reinvest their wealth to develop their own economies. This is largely the result of weak political institutions and underdeveloped civil societies which make it possible for political elites within mineral-rich countries to monopolise the ownership of these resources, thus redirecting much of the income to themselves. This often-deliberate mismanagement of resource revenues means that mineral resource-rich countries tend to underinvest in education and other important public goods, much as we see in South Africa. This underinvestment is exacerbated by the neglect of taxes as a source of revenue because extractive revenues are so high.

In addition, resource-rich countries fail to adequately diversify their economies, often prioritising the quick gains that come from extraction, over more sustainable, long-term economic planning. This often results in the agricultural sector being neglected, leading to increased poverty in rural populations. It also leads to underemployment as jobs are not created in other economic sectors. All of this is further compromised by the volatility of mineral resource prices, which causes unstable revenue streams, a situation made worse by commodity trading, since this attracts more speculative and short-term trading activity.

It is therefore unsurprising that this unstable and chaotic context gives rise to conflict between different political forces within countries over access to mineral profits. Seriously compounding the problem of the resource curse is the phenomenon known as Dutch Disease the paradox that occurs when non-renewable resources, such as the discovery of large oil reserves, harm a countrys broader economy which more often than not leads to economic recession.

The oil and gas industry exemplifies this disturbing trend in Africa. But more than this, African countries also tend to suffer a double whammy, because, coupled with the resource curse, this resource-rich continent also suffers from the presource curse as it is dubbed by a World Bank Working Paper. This is where countries that are targeted by oil and gas companies, such as those in Africa, experience slower economic growth but more social problems than those with fewer mineral resources. The World Banks research analysed 12 sub-Saharan African countries which had found oil and gas deposits during the period 2001-June 2020, and it was found that all these countries fell short of the inflated forecast expectations.

There were three reasons for their presource curse.

First, the commercial viability of the oil and gas resources for all countries was overvalued. These overestimations result from companies wanting to emphasise positive results to inflate their share prices. This, of course, results in governments and other companies exploring the same areas and being misled by these inflated potential results.

Second, oil and gas projects frequently run late and end up costing more than budgeted. In Africa especially, these overruns are likely to make extractive projects even less commercially viable.

Finally, African government revenues tend to fall significantly short as much as 63% lower than initial forecasts due to incorrect production rates, which are always lower than what was initially forecast. There are also challenges associated with taxation on production.

Nigeria, for instance, the largest oil producer in Africa, is an excellent example of the resource curse in action. For a long time, Nigeria was one of the top 10 global oil producers and the countrys estimated earnings are said to be between R5,822-billion and R8,733-billion in oil revenue since 1960. However, despite the enormous wealth oil has generated for this country, Nigerias Human Development Index (HDI) value for 2019 was 0.539, ranking at 161 out of 189 countries and territories. Compare this with Costa Rica, a country with considerably fewer mineral resources, which ranks 62 on the HDI.

The World Bank calculates that Nigerian per capita income is R32,456, compared with a global average of R266,349, while the adult literacy rate is only 62% (2018). According to a 2019 Poverty and Inequality in Nigeria report, 40% of the total population, or almost 83 million people, live below the countrys poverty line of 137,430 naira (R5,556) per year (National Bureau of Statistics, 2020).

To reiterate, investing in an oil and gas industry does not bode well for South Africa, a country with unprecedented poverty and unemployment levels, which continue to deteriorate. The time has come to stop the madness of chasing after elusive game-changers which are in fact game-spoilers and being naive or ignorant about the curse that oil and gas will bring to South Africa.

The time has come for the government to look at the evidence around us and to consider what it is our society really needs: to focus on the real game-changers such as investing in South Africas care economy and the just transition. DM

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OPINIONISTA: The curse of oil and gas, and the unfulfilled promises of resource-based economic development - Daily Maverick

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Opinion: Will the B.C. Economic Plan do enough to remove barriers that are holding back homegrown talent from joining the sectors such as agritech, life sciences and digital media that will drive our province forward?

It wasnt that long ago that in this province you could work in a family-supporting job with a high school education.

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My grandfather grew up on a farm in Surrey and worked in the mills along the Fraser River. He provided for his family and was active in the trade union movement, fighting to establish better working conditions and wages.

My father was employed in forestry and mining, and eventually moved the family to Campbell River, where many of my high-school friends worked at the local mine or mill after graduation. These jobs paid well and afforded them the opportunity to buy a home and support their own young families. We were competing and winning in a resource-based economy.

Times have certainly changed.

Within a generation, these resource-based jobs once the lifeblood of our province and accessible for many have significantly declined, shifting instead to technology-focused roles, often in a digital space.

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The barrier to employment in these sectors is high, with the vast majority of employment opportunities today requiring at least a post-secondary education.

The newly released B.C. Economic Plan promises investment in training for the jobs of tomorrow, but will this plan do enough to remove barriers that are currently holding back homegrown talent from joining the economies that will drive our province forward?

At Invest Vancouver, we know jobs in sectors such as agritech, life sciences, digital media and entertainment will be a substantial part of B.C.s future economy. Occupations in these and other high-tech or digital sectors benefit the residents of our region as they are generally well-paying, provide competitive benefits and are relatively future-proof but almost entirely inaccessible without at least a university degree.

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Post-secondary education is often expensive and time-intensive, which can be a challenge to most workers looking to retrain or upskill, but even more so for those who are low income, women and minorities. Indigenous people have a critical role in this provinces economy, yet are often marginalized from accessing education.

If education has become an unavoidable barrier between people and high-paying, family-supporting jobs, then how do we ensure that job-ready skills training is attainable and equitable?

The economic benefits of making skills training more accessible are clear a well-trained workforce can attract outside investment. In Invest Vancouvers recent analysis of our regions clean transportation sector, firms overwhelmingly reported that highly specialized local talent draws them to Metro Vancouver in the hydrogen sector, the engineering expertise in our region leads the world. Yet very few training opportunities exist in the province to support these jobs so much so that students are often recruited before they graduate from their programs. We must be mindful that an inability to keep up with workforce demands means we may lose clean transportation firms looking to establish themselves in our region.

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In its economic plan, the province stated it will advance inclusive and clean growth to create a low-carbon economy that works for everyone.

By focusing on how to advance broadly shared prosperity for all, supporting the export-oriented sectors where we have productive advantages and addresses barriers to future economic growth, we are on a better path to supporting our provinces workforce and attracting investment to our region. However, we must do more to establish an education and talent system that is accessible, connected, scalable and supportive of the jobs that will sustain the families of the next generation in B.C.

Just as the generation before me could not imagine a time when high-tech jobs would replace the once-prosperous mill in the town where I grew up, I dont know exactly what the future of work will look like for my own kids. However, I do know that we are transitioning to a technology-driven economy at a rapid pace. Equitable and expeditious access to agile digital skills training is imperative for us to ensure shared prosperity for the residents of this province, while we establish ourselves in the global economy of the future.

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Jacquie Griffiths is the executive vice-president of Invest Vancouver, a regional economic prosperity service of Metro Vancouver with the objective of attracting strategic investment and laying the foundation for a region where every resident can thrive economically in a fast-changing economy.

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Jacquie Griffiths: Opening skills training gate to will lead to path of prosperity for B.C. - The Province

DUBLIN, February 23, 2022--(BUSINESS WIRE)--The "Trend Opportunity Profile: B2B Sharing Economy" report has been added to ResearchAndMarkets.com's offering.

Businesses have already realized that sharing assets will bring not only multiple, sustainable added values but also financial and social benefits. Consumption within businesses will shift from the ownership model to the usership model.

Businesses have realized that reducing the use of natural resources through sharing helps bring down CO2 emissions and carbon footprints. Shift in consumption model from ownership to usership within businesses, rapid adoption of digital technology, the realization of economic benefit through collaborative consumption, and crowd-sourced assets and services will drive the growth of B2B sharing economy in the future. Sharing economy also opens up new avenues of revenue generation through renting or sharing idle capital-intensive equipment. There has been a surge in the number of start-ups in this space, enabling easy and secure sharing of resources.

B2B sharing will pace up like what B2C sharing is today in the next 10 years: B2B sharing economy will be recognized by big organizations as being one of the profitable routes to revenue from the capital-intensive idle equipment. Smaller and medium-sized enterprises will see B2B sharing economy as a way of reducing cost and minimizing initial set-up investment. Emerging regions will see more growth of the B2B sharing economy. The APAC region will have the highest potential for growth of B2B sharing economy in the next few years. Company and consumer willingness to share assets is highest in this region. Companies functioning within the B2B sharing space will continue to witness increased funding.

This is a comprehensive study on the present and future scenario of sharing economy models within the B2B space and is a detailed analysis of the various business models in the B2B sharing economy space. This research service also covers analysis on the level of investment or funding being injected into the B2B sharing economy space a and the regional prospects of the B2B sharing economy, and the industries which will see the upsurge of the B2B sharing economy. The study also captures future growth opportunities within this space.

Story continues

Key Issues Addressed

What do we understand about the B2B sharing economy and what are the different business models within this space?

What is the investment and funding potential of the B2B sharing economy over the next decade?

Which industries will see the highest adoption of the B2B sharing economy model and what will be the future impact of this model on these industries?

What new innovations and functionalities will be emerging in this space over the next decade?

What are the key growth opportunities to watch out for in the next decade?

What are the critical success factors for growth, primarily for companies seeking to enter this space?

Key Topics Covered:

1. Strategic Imperatives

2. Growth Environment

3. Sharing Economy in B2B

Trend Opportunity Overview

Key Themes of B2B Sharing Economy

B2B Sharing Economy Model - Marketplace-based Model

B2B Sharing Economy Model - Access-based Model

B2B Sharing Economy Model - On-demand Model

Evolving Trends by Industry

Trend Opportunity - Attractiveness Analysis

Trend Opportunity - Regional Exposure

Trend Opportunity - Industry Implications

Trend Opportunity - Levers

Case Study - Flexible Shared Workspaces

Case Study - B2B Crowd-funding Platform

Case Study - Fleet Sharing

Case Study - Rental-as-a-service

Case Study - Sharing Medical Resources

Case Study - B2B Sharing Marketplace

Trend Opportunity - Impact and Certainty Analysis

Trend Opportunity Matrix - Trend Innovation Index

Innovation Attractiveness Score

Trend Opportunity Matrix - Trend Growth Index

Growth Attractiveness Score

Trends - Beets Implications

4. Growth Opportunity Analysis

Growth Opportunity 1 - B2B Sharing that Enables Supply-chain-as-a-Service for Increased Asset Utilization and Operational Efficiency of Firms within the Supply Chain

Growth Opportunity 2 - Human Resource-as-a-Service will Ensure Huge Cost Savings in the B2B Landscape

Growth Opportunity 3 - Manufacturing-as-a Service with B2B Sharing Model for Greater Economic Returns

Critical Success Factors for Growth

Conclusion - The Way Forward

For more information about this report visit https://www.researchandmarkets.com/r/nafa03

About ResearchAndMarkets.com

ResearchAndMarkets.com is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.

View source version on businesswire.com: https://www.businesswire.com/news/home/20220223005694/en/

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ResearchAndMarkets.comLaura Wood, Senior Press Managerpress@researchandmarkets.com For E.S.T Office Hours Call 1-917-300-0470For U.S./CAN Toll Free Call 1-800-526-8630For GMT Office Hours Call +353-1-416-8900

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Global B2B Sharing Economy: Human Resource-as-a-Service will Ensure Huge Cost Savings in the B2B Landscape - ResearchAndMarkets.com - Yahoo Finance

As the world moves towards an increasingly digital future, expanded connectivity infrastructure has become a defining feature of a modern economy.

By Steve Briggs, chief sales and marketing officer at Seacom

It allows people and businesses across the globe to connect with and access a world of digital innovation. Whether its for social media and entertainment, or improved business performance through digital processes, connected technologies are now part of nearly every aspect of our daily lives.

Connectivity is vital for the growth and future success of every global economy, the economic benefits of which have been widely researched in many countries.

Only recently, however, has a thorough study been conducted on the economic impact of connectivity delivered by submarine fibre optic cables in South Africa.

The study, which was conducted by RTI International, finds the overall economic impact of connectivity to be significant, leading to increases in GDP and improvements to the likelihood of being employed.

But these economic gains were not broad-based because many South Africans still do not have access to or cannot afford fast and reliable Internet services. So, why are subsea cables so important to our economy, and what can we do to get more South Africans connected?

Transitioning to a digital-first economy

Over the last few decades, South Africa has transformed from a resource-based economy relying on rich mineral reserves, to an economy driven largely by tertiary sectors such as financial and business services, transport and communication, and manufacturing. Unlike more labour-intensive and low-skilled sectors, these sectors all rely heavily on ICT infrastructure that requires connectivity.

The study by RTI International demonstrates this, finding that subsea cable connectivity led to a 6,1% increase in GDP per capita between 2009 and 2014. This can be attributed to factors such as technological innovation, access to international markets, and improved education for people living in connected areas.

Connectivity also has a role to play in addressing unemployment, which remains one of South Africas most pressing socioeconomic challenges. In the aftermath of the pandemic, unemployment rose to a record high of 34,9% by the third quarter of 2021. The RTI International study finds that people were 2,2% more likely to be employed if they lived within 500 metres of the fibre network.

The study also highlights that connecting South Africas most densely populated areas would translate to the greatest increases in total employment.

Connecting Africa with the world

Subsea fibre optic cables are the backbone of the Internet. But before Africa had a subsea cable system, the entire continent relied on sporadic satellite connections that made Internet access largely inaccessible and expensive.

At the same time, South Africas telecommunications market suffered because it did not have a competitive structure, which changed in 2008 when a court ruling allowed other industry players to build infrastructure and provide Internet services.

One year later, Africa saw its first commercial undersea cable. The Seacom cable spans 17 000km and connects the eastern and southern coasts of Africa with the rest of the world with faster and more affordable fibre connectivity. The RTI International study credits this subsea cable for disrupting the market, resulting in a substantial decrease in wholesale prices for direct fibre and an increased uptake of broadband connectivity.

Since then, South Africas fibre-to-the-home connectivity has expanded significantly, connecting over 600 000 homes in a market that was growing more than 30% per year in 2019. Now, 90% of South Africas population also lives within 10km of a fibre line because of our extensive domestic network in most major cities and towns.

But, even though widespread fibre penetration is eminently achievable, only 1,2% of households in rural areas had access to Internet at home in 2019, compared to 15,4% of households in metropolitan areas.

And, despite the fact that mobile broadband coverage reaches over 95% of the population, more than 30% of South Africans still do not use the Internet.

One reason for this is the prohibitive cost of mobile data, and the lack of incentives for last-mile infrastructure development beyond the existing fibre network. While fibre connections require a higher initial investment, fibre ultimately pays its dividends by being orders of magnitude cheaper than prepaid mobile data and providing a much faster and more reliable connection.

Looking forward

Digital technologies are evolving rapidly, which is why we need a modern approach to policy and regulation to keep up with other digitally driven economies. Our policy and regulatory environment in the telecommunications sector has been characterised as sluggish and uncoordinated, such as the failed attempt to deliver universal broadband access through SA Connect.

But there are many reasons to be optimistic. Our government has recognised the importance of the Fourth Industrial Revolution (4IR) for the future of our economy, and at a BRICS meeting on 11 November 2021, our Minister of Communications announced a fast-track programme that aims to connect all South Africans to the Internet within 24 months.

Additionally, government agencies will be funding the development of affordable Internet access for low-income neighbourhoods. Other initiatives like Project Isizwe are also helping provide local communities with uncapped Wi-Fi for as little as R5.

Theres no doubt that South Africa needs more partnerships between government, NGOs, and the private sector to help narrow the digital divide. By allowing more people and businesses to participate in the digital economy with affordable connectivity, we can create more jobs, accelerate economic recovery, and pave the way forward to a more connected future.

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Coal yard.

Korba district in Chhattisgarh has 13 operational mines. Four more mines are in the pipeline. Of the operational ones, as many as 10 are loss-making, and just three are profitableGevra, Kusmunda and Dipkaproducing 95% of the coal.

It is a quintessential example of an economy that will need to immediately think of what to do when India starts to 'phase down' coal as promised at the annual global climate change conference (COP26) last year.

Coal, part of the fossil fuel basket, is the largest contributor towards emissions and hence planned to be phased down as part of climate action to restrict emissions so that the global temperature rise is restricted to 1.5-degree Celsius.

The latest study has found that Korba's coal-centric economy has stymied the growth of other economic sectors, including agriculture, forestry, manufacturing, and services even as the poor socio-economic status and high dependence on the coal economy make it highly vulnerable to the unplanned closure of mines and industries, leading to severe socio-economic consequences.

Keeping in mind that India's biggest coal and power districts will face energy transition challenges much earlier than anticipatedit is predicted that Korba will reach its peak in 2025the economic restructuring and development intervention will be essential, the latest study by International Forum for Environment Sustainability and Technology (iFOREST) has pointed out.

'Korba: Planning a Just Transition for India's Biggest Coal and Power District' was launched earlier this week.

"Our study of Korba in Chhattisgarh essentially shows just transition in India is about re-development of the coal regions. Major policy and legal reforms in land, labour, and finance will be required to enable a smooth just transition. We need to develop a strategic roadmap for this and secure necessary finances to support it, both domestically and through international cooperation," Chandra Bhushan of iForest said.

Very clear why Bhushan says so. As mentioned in the report, with declining coal production, for the mining companies (here, South-Eastern Coalfields Limited (SECL)) shutting down all eight unprofitable mines in Korba district in the next few years is a win-win situation as the resources saved can be diverted to start a just transition in Korba.

Despite having coal mines and multiple power plants and other industries such as Balco Plant, the district is a Schedule V district with over 40 per cent tribal population and declared 'Aspirational District' with 41 per cent people living below the poverty line and over 32 per cent of the district's population being 'multidimensionally poor' with limited access to healthcare, education, and basic amenities.

The numbers are alarming considering the fact that Korba produces over 16 per cent of India's coal and is also an electricity hub, with 6,428 MW of thermal power capacity. Clearly, the coal-based economy did not do justice to the poorest of the poor and that makes the task of transition harder in view of the human resources.

The study points out that Korba has an aging formal workforceat least 70 per cent of SECL and National Thermal Power Corporation (NTPC) workers are 40-60 years of age.

"Their retirement can be synchronized with plant and mine closure, making the transition of the formal workers less of a challenge. The biggest challenge is the re-employment of informal workers, who constitute over 60 per cent of the workforce in the coal industry. They will require job support and reskilling. Skilling for the new green economy is another challenge," the report mentions.

Speaking at the launch of the study report, Secretary, Coal Ministry, Anil Kumar Jain, had said, "A place-based approach is an answer to ensuring a just transition as districts have different issues. A strategic approach will be needed as there is a big human aspect involved in the energy transition."

He also suggested re-purposing mining land can be a key opportunity.

The CEO of NITI Aayog, Amitabh Kant, welcomed the idea of the report and said, this can become the template in terms of impact on jobs and livelihood, revenue and other social sector investments the energy shift will have consequences for coal-dependent districts and states' just transitional result as a concept around the world to ensure that cold dependent towns of regions do not suffer."

"I entirely agree that a strategic plan needs to be developed in the sector to prevent closures of mine and socio-economic disruptions and the policy should include components of cold phase-out strategy at the national state level coal-based power phase-out plan," he said.

"Just transition is not just about climate change action; it is an opportunity to reverse the resource curse in the coal districts. The next 10 to 20 years will be crucial for Korba to plan and implement a just transition. We need to have the right policies and governance mechanisms to ensure that this opportunity to build a new inclusive economy is realized," said Srestha Banerjee, Director, Just Transition, iFOREST.

**

The above article has been published from a wire agency with minimal modifications to the headline and text.

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Biggest Coal and Power District: Chhattisgarh's Korba Highlights Major Energy Transition Challenges for India | The Weather Channel - Articles from...

Congress instructs the Federal Reserve to aim for maximum employment and price stability. The Fed has defined price stability as inflation averaging 2%, but maximum employment doesnt lend itself to such a simple measure. In its monetary policy strategy statement, the Federal Open Market Committee (FOMC), the Feds policy-setting body, says: The maximum level of employment is a broad-based and inclusive goal that is not directly measurable and changes over time owing largely to nonmonetary factors that affect the structure and dynamics of the labor market.[T]he Committees policy decisions must be informed by assessments of the shortfalls of employment from its maximum level, recognizing that such assessments are necessarily uncertain and subject to revision. The Committee considers a wide range of indicators in making these assessments.

What does that mean in practice?

Simply put, maximum employment sometimes called full employment is the highest level of employment the economy can sustain without generating unwelcome inflation. It describes an economy in which nearly everyone who wants to work has a job. The unemployment rate is one important way to gauge whether an economy is at maximum employment, but not the only one.

The headline unemployment rate (U-3) is defined by the Bureau of Labor Statistics (BLS) as the percentage of adults who do not have a job, have actively sought work in the last four weeks, and are currently able to work. The unemployment rate is a percentage of the labor force, the sum of the unemployed plus the employed.

This measure doesnt, however, account for all idle workers and isnt a sufficient measure of whats called slack in the labor market. It doesnt, for instance, count workers who have given up looking for work or those who work part-time because they cant find a full-time job. The BLS publishes several alternative measures. The U-6 measure, for instance, counts the unemployed plus discouraged workers (those whod like to work but have given up looking because they believe there are no jobs available for them), those who are marginally attached to the labor force (those whod like to work but have stopped looking for work for any other reason), and those working part-time whod prefer full-time jobs.

Primarily because for much of the past decade, the unemployment rate fell and inflation didnt rise. Although the unemployment rate is a very informative aggregate indicator, it provides only one narrow measure of where the labor market is relative to maximum employment, Fed Governor Lael Brainard has said. For nearly four decades, monetary policy was guided by a strong presumption that accommodation should be reduced preemptively when the unemployment rate nears its normal rate in anticipation that high inflation would otherwise soon follow. But changes in economic relationships over the past decade have led trend inflation to run persistently somewhat below target and inflation to be relatively insensitive to resource utilization.

In a subtle but significant change to its monetary policy strategy statement, the Fed said in August 2020 that it would respond to shortfalls of employment from its maximum level rather than the previous deviations from its maximum level. This indicated that the Fed would no longer preemptively tighten monetary policy only because unemployment was approaching or even falling below estimates of the unemployment rate that economist models suggest are consistent with stable inflation. This change signals that high employment, in the absence of unwanted increases in inflation or other risks that could impede the attainment of the Committees goals, will not by itself be a cause for policy concern, the Fed said.

The Fed defines the maximum level of employment as a broad-based and inclusive goal. When Fed Chair Jerome Powell announced the addition of that phrase to the Feds strategy statement, he said it reflects our appreciation for the benefits of a strong job market, particularly for many in low- and moderate-income communities. This reflects calls for the Fed to keep interest rates lower as a way to boost employment in communities, including communities of color, where people are more likely to be unemployed. It also argues for looking beyond the overall unemployment rate to decide whether the economy is at maximum employment. What this means is practice for Fed policy remains to be seen. Some observers have argued that the Fed should keep interest rates low until the Black unemployment rate falls. But Powell has said, The point of the broad and inclusive goal was not to target a particular unemployment rate for any particular group And one of the things we look at is unemployment rates and participation rates and wages for different demographic and age groups and that kind of thing.

Among the other measures of the labor market that the Fed and others track are the following.

The Labor Force Participation (LFP) rate is the number of employed people plus the officially unemployed divided by the civilian non-institutionalized population older than 16.

In recent years, the LFP rate has been declining as the Baby Boomer generation ages and retires. To look beyond that demographic change, economists often focus on the LFP for people between the ages of 25 and 54, so-called prime age because people in this age group are more likely to be available to work. When the prime age LFP rate falls, it means there are more workers on the sidelines of the economy who arent counted as unemployed but who may be drawn into the labor force.

In economic downturns, LFP often declines as people stop looking for work. During the pandemic, the LFP rate fell sharply as many parents (particularly mothers) left the labor force due to childcare facility closures and schools shifting to distance learning, and others dropped out for fear of COVID or other reasons, and still others took early retirement. The Fed and other economists have been surprised that the LFP didnt rebound more quickly when vaccines became available and lockdowns ended.

The failure of the LFP rate to return quickly to pre-pandemic levels led the Fed in late 2021 and early 2022 to judge that the economy was closer to maximum employment than it had anticipated. Powell noted that Fed officials hope the level of maximum employment consistent with stable prices may increase as [labor force] participation gradually rises.

The employment to population ratio is the employed as a percentage of the civilian noninstitutionalized population. It reflects those people who are counted as unemployed and those who are not working for some other reasonthose who are retired as well as those who have given up looking for work.

Using a sample of 16,000 employers, the Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS) measures the number of people who have left their jobs.

The quits rate counts workers who voluntarily left their job as a percent of total employment. The layoffs and discharges rate includes all involuntary separations initiated by the employer. Retirements, transfers, deaths, and disability-related separations are counted in the other separations rate.

Workers are more likely to quit when they feel confident they can obtain another job, so a rising quit rate is a sign of a very strong job market.

JOLTS also counts the number of positions for which employers are actively recruiting and would start within 30 days of hire. The number of unfilled jobs is a measure of the unmet demand for labor. The ratio of the number of unemployed per job opening is a way to gauge the strength of the job market; the lower this ratio, the closer the economy is to maximum employment.

Named for William Beveridge, a 20th-century British labor economist and politician (though he apparently never drew it), the Beveridge Curve charts the number of job postings (as a percentage of all filled and unfilled jobs) against unemployment rate. The Bureau of Labor Statistics updates the chart monthly here. The line generally slopes downward because a higher rate of unemployment usually coincides with a lower rate of vacancies, since there are more people looking for jobs.

Outward shifts in the curve (that is, up and to the right) show a given level of job postings is associated with higher rates of unemployment. They are seen as indicators of unwelcome change in the labor marketan increase in mismatches between the skills of workers and the demands of employers, for instance, or a reluctance of jobless workers to take available jobs. The Beveridge Curve did shift outward following the Great Recession. It shifted further outward during and after the COVID-19 pandemic; in other words, employers found it harder to hire at given rates of unemployment than they had in the recent past. When the unemployment rate fell to 4.2% in November 2021, the job openings rate was 6.6%. In September 2017, when the unemployment rate also hit 4.2%, the job openings rate was 4.1%.

The NAIRU (Non-Accelerating Inflation Rate of Unemployment) is an estimate of the lowest the unemployment rate can go without leading to rising inflation. The logic is that when there arent very many unemployed workers, employers raise wages and that leads to rising prices. The NAIRU is difficult to estimate precisely and can change over time as, among other factors, demographics, union strength, and the pace of productivity change.

At his January 2022 press conference, amid growing concern about rising inflation, Powell said that most FOMC participants agree that labor market conditions are consistent with maximum employment, which he defined as the highest level of employment that is consistent with price stability. The issue, Powell added, is whether we can raise [interest] rates and move to a less accommodative [monetary policy] without hurting the labor market.

The Brookings Institution is financed through the support of a diverse array of foundations, corporations, governments, individuals, as well as an endowment. A list of donors can be found in our annual reports published online here. The findings, interpretations, and conclusions in this report are solely those of its author(s) and are not influenced by any donation.

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How does the Fed define maximum employment? - Brookings Institution