The cost of living has made it impossible to find a dollar slice. According to Larry Fink, the solution is to get workers back at work.
Returning to the office will increase productivity. "We have to get our employees back in the office so that we don't have to worry about inflation," he said. An internal email seen by Yahoo Finance shows that staff were told to return to work three days a week.
The return to a pre-COVID work culture is what Fink wants. That world is no longer there. Even if it is on a part time schedule, remote work is still here to stay.
The goldbugs wish President Richard Nixon hadn't gone off the gold standard in 1971 but once a regime changes there's no going back
Higher worker productivity lowers inflation. Our understanding of productivity has changed over time. Employees with flexible schedules are more likely to get their work done when they aren't in the office. A survey shows that hybrid and remote workers are more productive than their in-office peers.
In the first quarter of this year, productivity fell for the first time in 67 years. During the second quarter, it remained gloomy.
Productivity rates can be reached by dividing the GDP by hours worked. According to the president of the Economic Policy Institute, GDP numbers show healthy growth. The decline in inventory and increase in imports are to blame for the dip in worker productivity.
If the recession continues, Fink has a chance to stand up. This would cause layoffs and cause the unemployment rate to go up, which would cause inflation to go down. A 5% unemployment rate is needed to tame inflation, according to the former Secretary of the Treasury. The unemployment rate went up to 3.7% in August, the highest in the past six months, according to the Bureau of Labor Statistics.
If an economic downturn makes workers desperate to keep their jobs, employers will be in a better position to force them back to work. At the beginning of the year, employees were working more from home. Those who are forced to return will need to quit in order to increase the unemployment rate.
Most of the workforce would think about looking for a new job if they were forced to be in-office full time. If these workers can't find a new job, the unemployment rate will go up. The unemployment rate is low and inflation high because those who have been laid off are snapping up new jobs faster than ever.
Unemployment is just one factor in inflation in a world that is a lot different than it was a few years ago. There are a lot of other issues that could keep inflation high, such as Russia's invasion of Ukraine, China's COVID-19, and a supply-chain crunch. A return to the office could cause demand for gas and take out lunches to go up.
White-collar workers returning to their cubicles isn't the solution to inflation.
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