Workers should pay attention to news that Supreme Court Justice Clarence Thomas has been wined and dined by a billionaire businessman for years without disclosures, while Justice Neil Gorsuch sold property to a law firm executive who has been involved in numerous cases before the court. It will come as no surprise that justices receiving lavish gifts are going to side with the interests of their wealthy benefactors when a case comes before them involving business interests versus workers’ rights.

We can all hope the law will prevail, and that some of the moves to install new codes of ethics can restore some of the integrity of the court, but the Republican-appointed justices’ track record is dismal when it comes to empowering workers.

The Supreme Court has played an important role in the decades-long campaign to erode workers’ rights in this country. In particular, the Supreme Court has issued rulings that have undermined everything from workers’ rights to form unions, the ability to build strong unions, and health and safety on the job. This term, the Supreme Court once again sided with corporations in Glacier Northwest v. Teamsters to make it easier for employers to sue unions over their decision to strike.

Beyond Glacier, here’s a rundown of several key decisions that hurt workers just in the last few years:

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Most of the $350 billion in State and Local Fiscal Recovery Funds (SLFRF) allocated under the American Rescue Plan Act (ARPA) remains unspent. County governments, in particular, have been slow to spend or obligate their fiscal recovery funds compared with cities and states. Those that have spent a large share of their allocation have generally used the funds for basic revenue replacement, which makes it less likely counties will take advantage of the flexibility allowed under SLFRF rules to make new investments to advance equity. Counties have myriad opportunities to use remaining SLFRF dollars to help working families, and advocates should encourage them to do so.

County governments were granted $65.1 billion in fiscal recovery funds, and $52.4 million of that went to 882 larger counties that have more frequent reporting requirements than smaller counties. As of the last reporting deadline on December 31, these larger counties have spent less than 27% of that money and obligated just 41% of it. This is substantially less than the pace of SLFRF spending by cities and states, as shown in Figure A below. Counties only have until December 31, 2024, to obligate these funds.

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Last week, the Supreme Court handed employers one more cudgel to use in trying to squelch worker organizing: the threat of a state court lawsuit for economic harm. In Glacier Northwest Inc. v. International Brotherhood of Teamsters Local Union No. 174, the Supreme Court upended decades of labor law precedent by allowing an employer to file a lawsuit for damages caused by spoilage of a day’s worth of product during a strike.

There’s been a lot of writing about the case, but here’s the upshot: Workers still clearly have the right to strike, but the Court’s decision opens the floodgates for employers to weaponize financially burdensome state court litigation as a pressure tactic against workers and unions. The decision could have been worse—it contains some guardrails that may help limit the damage and provide unions with defenses because it doesn’t allow lawsuits for economic harm under any and all circumstances. But it’s still a very harmful decision that hands employers another way to suppress worker organizing and reduce worker power.

As with abortion, guns, and so many other issues, Glacier shows just how out of touch the Supreme Court is with the national pulse. The opinion was issued amid a wave of union organizing and worker action not seen in decades, including at household-name companies like Starbucks, REI, and Kellogg’s. Television and film writers—members of the Writers Guild—have been on strike for a month. Public opinion of unions is the highest it’s been in my lifetime, and a majority of workers surveyed say they’d join a union if they could.

However, only around 6% of private-sector workers are unionized. Our weak and outdated labor laws make it terribly hard to unionize, and employers routinely violate these laws by firing, threatening, and otherwise retaliating against workers who try to exercise their rights. This context makes last week’s decision even worse; it’s enraging and tragic that the Supreme Court has once again put its finger on the scale in favor of corporate America.

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The debt limit deal that Congress passed and President Biden will sign tonight may avert the economic crisis that would be caused by the U.S. government defaulting on its payments. But it’s worth reiterating that we shouldn’t be in this deal-making situation to begin with.

“Debt limit deals” are a way to force policy change through a backdoor by holding the U.S. (and global) economy hostage. Accepting that “debt limit deals” are just business as usual every time we approach the ceiling basically means that one political party can gain access to an inordinately powerful “hack” around the normal democratic process so long as some arbitrary conditions prevail.

Republicans have a majority in just one chamber of Congress, and face a president of the opposing party. Normally, this would mean they would have to argue their case for policy changes on the floor of the House, and compromise more often than not. However, just because we were about to cross over the utterly arbitrary debt limit, Republicans magically gained enormous amounts of leverage to dictate policy—including a lot of policy divorced from the specific conversation of addressing the debt and deficits. This is not a sensible way to govern.

This deal looks significantly less harmful than the original McCarthy proposal that passed the House last month, but it still contains several worrying provisions. Notably, it still includes a concession to expand and tighten work reporting requirements for some of the most vulnerable Americans to access the Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). These should never have been part of a debt ceiling discussion.

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Below, EPI senior economist Elise Gould shares her insights on the jobs report released this morning, which showed 339,000 jobs added in May. Read the full Twitter thread here. 

The job report for May shows notable employment gains in education and health services, professional and business services, government, and leisure and hospitality in May. pic.twitter.com/c36lnWkCNR

— Elise Gould (@eliselgould) June 2, 2023

While the boost in govt jobs is welcome news, state and local employment is still down 1.4% since Feb 2020. Private-sector jobs fell further and came back stronger due to largescale policy investments. Lagging public sector jobs is concerning for the vital services they provide. pic.twitter.com/1s2QgFu2Zc

— Elise Gould (@eliselgould) June 2, 2023

The household survey is a bit mixed but has more volatility so I don’t think represents a general cooling off, especially in light of the strong payroll numbers for May. The drop in employment seems to be isolated within self-employment but wage and salary jobs rose in May.

— Elise Gould (@eliselgould) June 2, 2023

After hitting 80.8% in April, the share of workers 25-54 years old with a job edged down but remains higher than pre-pandemic levels, second highest level in over 20 years (since 2001). pic.twitter.com/NNkTPJPSDi

— Elise Gould (@eliselgould) June 2, 2023

Below, EPI senior economist Elise Gould offers her initial insights on today’s release of the Job Openings and Labor Turnover Survey (JOLTS) for April. Read the full Twitter thread here.

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Broad poverty data understate the extent of deprivation among Asian American, Native Hawaiian, and Pacific Islander (AANHPI) children. At first glance, poverty appears to just disproportionately affect Native Hawaiian and Pacific Islander children, as Asian American children seem to be nearly as likely as white children to be poor (see Figure A). However, wide economic disparities between AANHPI families and children of different backgrounds hide under these broad statistics. 

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In part one of this blog post series, we found that the Class of 2023 is graduating into an exceptionally strong labor market, with the lowest unemployment rate for young adults in 70 years. In part two, we found that young adults are more likely to have predictable work hours, work full time, and have only one job now than in 2019. In the third and final part of our series, we analyze how young workers’ wages have changed over the pandemic and differ across demographic groups.

We find:

• Workers of all ages have experienced stronger-than-usual wage growth in the pandemic business cycle (February 2020 to March 2023)—even after accounting for high inflation—but young workers were not left behind like they have been in previous business cycles.
• Entry-level high school graduates (ages 17–20) saw real wage growth three times as fast as entry-level college graduates (ages 21–24) in the pandemic business cycle.
• Gender and racial wage gaps already exist among entry-level high school graduates. Women are paid 14% less than men on average, while white workers earn slightly more on average than their Black and Asian American/Pacific Islander (AAPI) counterparts.
• Among entry-level college graduates, women and Hispanic and Black workers fall even further behind. Women are paid 16% less than men on average, while Hispanic and Black workers are paid 6% and 11% less, respectively, than their white counterparts on average.

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We began this blog post series discussing the promising employment prospects for young people ages 16–24 as they graduate from high school and college this spring. As of the latest data, the unemployment rate for young people is the lowest in 70 years. In part two of our series, we delve into young people’s working hours and employment by industry, compared with 2019 before the pandemic recession.

On key measures of job quality, young people face a better labor market today than in 2019. This represents an extraordinarily strong job market recovery for young workers—especially compared with previous recessions. In particular, we find:

• Young workers are more likely to have predictable work hours and work full time than in 2019.
• All workers, but particularly young workers, are more likely to work only one job in 2023 than in 2019.
• Young people are most likely to work in leisure and hospitality, retail trade, and education and health services, both now and pre-pandemic. Due largely to this industry concentration of employment, they suffered the greatest job losses during the pandemic recession in food services and drinking places and educational services.
• Young people gained the most employment in construction and transportation, particularly in jobs as couriers and messengers as well as warehousing and storage.

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The affluent town of Menlo Park—where Google was founded, Meta (formerly Facebook) has its headquarters, and the median home price is $2 million—is a test case for how communities can win when it comes to creating affordable housing for workers and righting the wrongs of segregation. 

Some Menlo Park residents pushed back against proposed housing for teachers and support staff who couldn’t afford to live in or near the towns where they teach, introducing Measure V. The measure, defeated in 2022, would have blocked the teacher housing and made it more difficult to build homes, including affordable apartments, in their communities. 

This win—in one of the richest suburbs in the country—is a story of unyielding grassroots activism, years of preplanning, and constant reinforcement of the “No on V” coalition’s vision of a racially, ethnically, and economically diverse town. 

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Recent reports indicate that the debt limit “X-date” could come as early as June 1. On this X-date, the U.S. Treasury will no longer have enough cash in its accounts at the Federal Reserve to meet all the legal spending obligations legislated by Congress. These obligations include paying holders of U.S. Treasury debt, Social Security checks, and reimbursements to doctors treating patients covered by Medicare and Medicaid. The normal way of dealing with such a cash shortfall—selling new debt issues and depositing the proceeds into the Treasury’s account—is exactly what the debt limit will make impossible on that date.

If the X-date comes and nothing is done except the federal government fails to fulfill its spending obligations, economic calamity will ensue: People who depend on programs like Social Security and food stamps will suffer, and the spillover effects on the larger economy would certainly cause a recession—and a truly horrible one if the stalemate lasted for any significant amount of time.

The factor forcing this terrible outcome would not be any implacable economic reality, it would simply be Congressional Republicans weaponizing the absurd political institution that is a statutory debt limit that can only be adjusted through acts of Congress. With a responsible Congress, the debt limit would be a silly inconvenience to policymaking. But twice in the past 12 years, Republican-led efforts in Congress have brought the nation to a near-crisis—and the current near-crisis could still graduate into a real crisis in coming weeks.

In 2011 (the last instance of protracted debt limit brinkmanship), the GOP demands for large spending cuts did mammoth damage to the living standards of U.S. families by sabotaging the economic recovery from the Great Recession and financial crisis of 2008–09. This time around, the GOP demands are not just for recovery-damaging spending cuts, but also for a complete do-over on already passed legislation; Speaker McCarthy’s recently released list of demands includes rolling back student debt relief as well as the Inflation Reduction Act’s (IRA) climate provisions and enhanced enforcement against the nation’s rich tax cheats.

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Below, EPI economists offer their initial insights on the jobs report released this morning, which showed 253,000 jobs added in April.

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As young adults graduate from high school and college this spring, it’s a good time to reexamine how the labor market is performing for young workers. In this first blog post of a three-part series, we analyze the short- and long-run trends in job opportunities and school enrollment for young workers, defined as workers ages 16­ to 24 years old. The second post will investigate the types of jobs young people work in and how that has changed over the current business cycle. The third post will focus on wage levels and trends through the pandemic labor market.

We find:

• Historically, the unemployment rate for young people ages 16–24 is about 2.6 times higher than people ages 25 and older.
• Young people are back to pre-pandemic labor market conditions, a much faster bounceback than any recovery in recent history. In fact, the unemployment rate for young adults is at its lowest since 1953.
• Over the last four decades, young people’s enrollment in high school, college, or university has increased while their employment has declined somewhat.
• The Class of 2023 is graduating into a stronger labor market than last year as measured by lower unemployment and underemployment rates as well as a smaller share not employed or not enrolled in school.
• Across race and ethnic groups, young Asian American and Pacific Islanders have the highest school enrollment and lowest employment rates, while young white people are most likely to be employed.

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Below, EPI senior economist Elise Gould offers her initial insights on today’s release of the Job Openings and Labor Turnover Survey (JOLTS) for March. Read the full Twitter thread here.

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A Wall Street Journal op-ed claims that private markets and capitalism have no responsibility for remedying racial segregation and the authors cite my previous book The Color of Law to back up their claims. While my book exposed the forgotten history of how government policy created segregation, that doesn’t mean the market was blameless in this apartheid and should get a free pass, as the Journal authors argue.

“The answer isn’t to place the burden on the market. It’s to root out bad government policies,” write David Henderson and Phillip Magness—who work at conservative policy centers (the Hoover Institution and the American Institute for Economic Research, respectively).

Henderson and Magness, however, identify no particular government policies whose rooting out would redress segregation while simultaneously avoiding a burden on markets. More to the point, however, they ignore the enormous responsibility for segregation that the private sector also bears, and its obligation to participate in reform to a much greater extent than any business enterprise now contemplates.

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“I prayed to God that he would take care of my health, body, mind, soul, and spirit.” Those words came from Libia Vargas De Dinas, a 72-year old diabetic janitorial worker who worked in a Florida county courthouse and got stuck in a holding cell by accident for three days in February.

At Christmas time last year, an 82-year-old Walmart cashier was finally able to retire after a viral TikTok video and GoFundMe campaign netted him over $100,000. A kind customer posted the TikTok video, saying, “I was astounded seeing this little older man still grinding working 8- to 9-hour shifts.”

Do these stories illustrate America’s retirement divide or are they oddities?

The evidence compiled in our recently released Older Workers and Retirement Chartbook suggests the former, though the story is complex and multilayered.

Once workers reach older ages, especially Black and brown workers, those who are not financially able to retire must accept low wages and poor working conditions because they know they have little chance of finding a better job, or any job at all, if they lose employment.

Because of this, for most of these workers, working longer does not prevent poverty in retirement, though it may postpone it for some time. Many are left with no choice other than claiming Social Security benefits early, leading to reduced Social Security benefits and increasing downward mobility and poverty in retirement. They have no way out.

The chartbook—produced by The New School’s Schwartz Center for Economic Policy Analysis and the Economic Policy Institute which documents an array of disparities in more than 30 charts—shines many spotlights on this grim reality. It provides evidence that millions are unable to retire due to financial stress while others are pushed into involuntary premature “retirement” even if they don’t have enough money to make ends meet.

Nearly half of older Americans are financially unready for retirement—many on the precipice of poverty. Most workers have little, if anything, in their retirement accounts; the median retirement account balance for Americans approaching retirement age is only $10,000. If nothing changes, older Americans may increasingly need to hope for random acts of kindness and GoFundMe pensions.

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This week, Speaker of the House Kevin McCarthy plans to hold a vote on a bill that would raise the nation’s debt limit, but only in conjunction with extraordinarily steep spending cuts and new barriers to accessing income support programs. This is the next milestone in House Republicans’ attempt to play a game of dangerous political brinkmanship with the U.S. economy, trying to force through harmful and deeply unpopular federal spending cuts in exchange for increasing the debt limit. This approach recklessly flirts with bringing on the economic catastrophe of a government default in the short term.

Speaker McCarthy’s proposal would slash spending across federal programs for the next decade, cutting federal resources for everything from child care programs to environmental protection safeguards. If these deeply unrealistic spending cuts actually came to pass, the human toll would be enormous, and economic growth would be deeply damaged.

The McCarthy proposal also resurfaces a completely inaccurate but alarmingly persistent conservative claim: the idea that government anti-poverty programs are unnecessarily generous, bloated, and are keeping people out of the workforce who should otherwise be supporting themselves entirely through income earned in the labor market. The proposal seeks to severely restrict access to Medicaid health coverage and food stamps by imposing onerous requirements to prove that recipients are working or looking for work. Past evidence about these types of burdensome reporting requirements shows clearly that they will not actually lead to increased employment but will deprive vulnerable families of vital support.

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Recently passed school voucher bills in four states are part of an extreme and unpopular campaign to defund and privatize public schools. As momentum builds around efforts to divert public funds to private schools, lawmakers and advocates should recommit to opposing harmful voucher bills and supporting greater investment in public education. Research and advocacy by educators and champions of public education in the states can serve as a guide.

On Tuesday, the House Committee on Education and the Workforce held a congressional hearing on voucher expansion featuring three voucher advocates and one opponent. The hearing comes amid an intense, coordinated push this year by anti-public school advocates who have long sought to privatize public education, in part through state-level efforts to enact private school voucher programs in state legislatures across the country.

School vouchers—which include traditional private school subsidies, Education Savings Accounts, and private school tuition tax credits—are diversions of public funds to private and religious schools. Efforts to implement and expand voucher programs in states across the country are key to the relentless and enduring campaign to defund and then privatize public education, a movement that also includes manufacturing mistrust in public schools and targeting educators and their unions.

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The H-1B program is the largest U.S. temporary work visa program, with a total of approximately 600,000 workers employed by 50,000 employers. The program’s intent is to allow employers to fill labor shortages for jobs that require a college degree, by providing work authorization for migrant workers in fields like accounting, journalism, health and medical, and teaching. Most H-1B workers, however, are employed in occupations like computer systems analysis and software development.

Visas for new workers are capped at 85,000 per year, but many employers are exempt from that annual cap, including universities and their affiliated nonprofit entities, nonprofit research organizations, and government research organizations. Approximately 130,000 temporary migrant workers will receive new H-1B visas each fiscal year to begin new employment for capped and cap-exempt employers, with another 300,000 receiving renewals (which are not subject to the cap). Every April 1, the government decides, via lottery, which employers will receive the 85,000 new visas subject to the cap.

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Last week, Congress passed H.J.Res.7, a resolution that formally ends the public health emergency declared at the beginning of the COVID-19 pandemic. This termination is effective as of today—April 10, 2023—and signals the end of certain programs put in place in the past three years, including important measures related to Medicaid and health insurance.

However, the resolution will largely not affect the ability of state, local, territorial, and tribal governments to spend the close to $200 billion in unspent State and Local Fiscal Recovery Funds (SLFRF) allocated by the American Rescue Plan Act (ARPA). State and local governments will still be able to use remaining SLFRF dollars to make transformative investments to enhance equity and support working families and communities.

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Below, EPI president Heidi Shierholz shares her insights on the jobs report released this morning, which showed 236,000 jobs added in March. Read the full Twitter thread here. 

The unemployment rate ticked down to 3.5% in March—near a 50-year low—and all for good reasons. The labor force participation rate and the employment-to-population ratio both rose. 2/

— Heidi Shierholz (@hshierholz) April 7, 2023

THIS IS IMPORTANT: The labor market is strong, but it’s not “too hot.” We know this because wage growth is slowing. We can absolutely sustain the kind of labor market tightness we are seeing today, if the Fed doesn’t stand in the way (or hasn’t already). 4/

— Heidi Shierholz (@hshierholz) April 7, 2023

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As strange as this might sound, the actual economic cost of inflation is often hard to identify. One might think that it’s obvious that if inflation rises from 0% to 5% then the purchasing power of “real” incomes (nominal incomes adjusted for inflation) throughout the economy has fallen by 5%.

But that’s not right—or at least it’s not right without some further specification about just whose income has fallen. The “circular flow” diagram that is in chapter one of most macroeconomic textbooks highlights something profound: one person’s cost is another person’s income. So, when the price of eggs rises by 30%, that extra money out of shoppers’ pockets doesn’t disappear into thin air, instead it lands someplace. In the case of eggs, that someplace could be in chicken farmers’ incomes, or the profits of middle-men brokers, or the profits of grocery stores.

There are times when inflation really can be driven by most incomes in society rising at mostly the same pace. In this case, inflation is distributionally neutral, but there’s also no “real” cost. For example, if inflation accelerates from 0% to 4%, but nominal wage growth accelerates from 2% to 6%, real wages haven’t been harmed. The inflation we’ve seen since 2021 has had profound distributional consequences. Prices and incomes for low-wage workers, middle-wage workers, high-wage workers, and profits have not moved in lockstep but have seen very different rates of growth.

Most striking is the role of profits in starting and sustaining inflation since 2021. Figure A below shows one measure of profit “mark-ups” in the non-financial corporate (NFC) sector of the U.S. economy. We look at this sector because it has rich and timely data coverage. Mark-ups are essentially profits earned per unit of output divided by labor and non-labor costs.

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Last week, we released the latest State of Working America Wages Report, which highlighted historically fast real wage growth for low-wage workers between 2019 and 2022. Even after taking into account higher inflation, the 10th percentile hourly wage grew 9.0% over that three-year period, significantly faster than at an equivalent point from any other business cycle peak in recent history.

This tremendous wage growth occurred because policymakers took a different path in the pandemic recession and passed vital relief and recovery measures at the scale of the problem, which created a strong labor market. Unfortunately, despite this recent period of growth, wage levels for U.S. workers at the bottom of the earnings distribution remain low, making it difficult to make ends meet in any county or metro area.

While low-wage workers experienced welcome gains, we were surprised to find that the gender pay gap widened, even though women are disproportionately more likely to be lower-wage workers. We found that the gender wage gap grew across three measures: the median, the average, and a regression-adjusted average (i.e., controlling for age, race/ethnicity, education, and geographic division). Here, we delve deeper into the question of what happened to women’s wages vis-a-vis men’s over the last three years as well as the large wage gaps that remain across educational attainment and are worse for Black and Hispanic women.

The gender wage gap

Between 2019 and 2022, the gender wage gap remained stubbornly large even as lower-wage workers experienced gains. Women, on average, were paid 20.3% less than men in 2019. By 2022, that gap widened to 22.2%. Similarly, the regression-adjusted wage gap, which has been stagnant for most of the last 20+ years, widened slightly from 22.6% to 22.9%. Much of the growing wage gap at the average (unconditional and regression-adjusted) is driven by men’s higher wages and faster wage growth at the top of the wage distribution. When we look instead at wage growth at the middle of the wage distribution—the 40th to 60th percentiles—a different story emerges. In 2019, these middle-wage women were paid on average 16.2% less than middle-wage men. In 2022, that wage gap narrowed to 15.4%, a small but promising move in the right direction.

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The U.S. labor movement has seen a resurgence in union activity in recent years. In 2022, more than 16 million workers were represented by a union—an increase of 200,000 from 2021. Union election petitions with the National Labor Relations Board (NLRB) increased by 53% during fiscal year 2022, the highest single-year increase since fiscal year 2016. Further, unions saw their highest approval rating in more than 50 years.

Despite this resurgence, the current unionization rate (11.3%) is well under half what it was roughly 40 years ago. This is because of decades of attacks on the right to organize and, increasingly, employers’ use of “union avoidance” consultants, including in response to recent union organizing campaigns at Starbucks, Amazon, and Google. These campaigns—illustrated below—are representative of employer response and hostility toward workers attempting to organize.

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On March 13, the U.S. Treasury Department released data and an interactive dashboard showing how state and local governments have been using the $350 billion in State and Local Fiscal Recovery Funds (SLFRF) appropriated by the American Rescue Plan Act (ARPA). These funds have fueled transformative investments and contributed to a strong recovery from the pandemic recession, and state and local governments should use their remaining SLFRF allocations to rebuild the public sector and support working families.

SLFRF spending by state and larger local governments (cities and counties with a population over 250,000) totaled just over $114 billion by December 31, 2022, an increase of $13 billion in the final quarter of the year. Six states—South Carolina, Oklahoma, Missouri, Tennessee, South Dakota, and Mississippi—have spent less than 10% of their funding. All six have Republican governors and Republican majorities in their legislatures.

One of SLFRF’s main purposes was to allow states to restore their public-sector capacities quickly. There were 376,000 fewer public-sector workers in February 2023 than three years earlier. States should be using their SLFRF dollars to fill open positions and retain experienced employees by increasing the compensation of public-sector workers, one-third of whom are paid less than $20 an hour.

Evidence suggests states that have chosen to invest larger shares of their SLFRF dollars are having greater success in recruiting and retaining state employees in a highly competitive job market. As seen below, states that have spent less than 30% of their SLFRF allocation have seen their state government workforces recover more slowly compared with those that have spent over 30%. States, therefore, have an excellent opportunity to spend their recovery funds in rebuilding the public sector and restoring public services.

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The debate over the Federal Reserve’s proper course of action for the rest of 2023 was getting a little stagnant in recent months. The argument centered on whether inflation’s persistence was really a sign of an overheated economy that still needed cooling or if it was due to stubbornly large—but dampening —ripples stemming from the huge pandemic and war shocks of previous years. The recent failures of Silicon Valley and Signature banks and chaos in other corners of the banking sector definitely provide a new twist to this debate.

My view on what the Fed should do now in the wake of banking failures is relatively straight-forward:

• Before the Silicon Valley Bank (SVB) failure, it was already clear that the Fed should pause interest rate hikes at this week’s meeting, based largely on consistent deceleration of nominal wage growth. 
• The SVB failure and subsequent banking turmoil are far more likely to be demand-destroying events than not. If one thought the Fed already should be reducing the pace of their rate hikes (or even pausing entirely) due to labor market cooling, the fallout from SVB just means this cooling will happen more quickly and hence the case for halting further rate hikes is stronger.
• It is a genuine problem that interest rate hikes of nearly 5% in a year cause this much distress in the financial sector, indicating a clear failure of bank management and supervision. These failures should be addressed going forward. But they exist today and the fallout of them clearly provides another argument for standing pat on further rate increases.

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