LEILA FADEL, HOST:
Right now, in this country, there's a tale of two job markets, so to speak. We reported on a lot of high-profile layoffs in the tech and media spaces, including here at NPR. But other sectors are still hot, and they're racing to find people. We reached out to businesses looking to recruit and retain employees. Lauren Schenning is the talent acquisition manager with Coakley & Williams Construction in Fairfax, Va. She says they're willing to hire people from across the country.
LAUREN SCHENNING: We're a general contractor, so there is a workforce shortage in the construction industry.
FADEL: Steven Cramer, president of the North American Customer Service Management Association in Phoenix, Ariz., says the increasing request for remote work is hampering efforts there.
STEVEN CRAMER: Some companies are really trying to bring people back into the office, so that becomes a challenge for the employers.
FADEL: Let's turn now to Arin Dube. He's an economist with the University of Massachusetts Amherst and a research associate at the National Bureau of Economic Research. Good morning. Thanks for being on the program.
ARIN DUBE: Good morning. Thanks for having me.
FADEL: So let's talk about where the job market is hot right now.
DUBE: So following the pandemic, we have had a very tight labor market, especially for low-wage workers. Workers in the service industries - think hospitality, for example, and restaurants and hotels. This has been a sector that has seen very fast wage growth. And that has led to something that's very interesting. We've actually seen wages rise faster at the bottom than the top, reducing wage inequality. So that has flipped the script...
FADEL: Interesting.
DUBE: ...On rising wage inequality for over the last 40 years.
FADEL: So does this, then, make it a more fair job market, where low-wage earners are in a position to demand better pay?
DUBE: I think given how poorly wages rose for those at the bottom and the middle of the distribution for so long, this tighter labor market that has led to sharper wage growth at the bottom would seem to be as fair to many people.
FADEL: So is this breaking down other barriers, as well?
DUBE: Yeah. So one interesting thing is also that we've seen the gap fall in terms of wages of Black workers and white workers, again, a gap that had been actually rising over many decades. Similarly, we have seen some reduction in the gap between women and men, reducing the gender pay gap. So generally speaking, a tighter labor market tends to do good things to workers, especially those who are less privileged.
FADEL: Are jobs the best indicator when the Federal Reserve looks for clues to inflation, interest rates, the risk of a recession?
DUBE: Certainly, the labor market tightness has been cited by the Federal Reserve as one possibly critical determinant of rising inflation. I think in a lot of research, economists still remain divided on exactly what role wages have played. In our own work, we have found that it's played some role but not necessarily the dominant role explaining the rise in inflation in the last few years. But certainly, the Federal Reserve will be paying close attention to that question.
FADEL: And what do you expect to see in the job market in the next few months?
DUBE: So I think, obviously, there are many variables - hard to say. I do think that there's some chance of - that the labor market is getting less tight. But overall, I think there's a good chance that we're going to see the soft landing that the Fed has been really after.
FADEL: Economics professor Arin Dube at UMass Amherst, thank you so much.
DUBE: Thank you.
(SOUNDBITE OF FRAMEWORKS' "DELPHINA") Transcript provided by NPR, Copyright NPR.
