Category Archives: Economics

Flying Baby Formula In From Europe: ‘Turned Us Into 3rd World Nation’

OK, so you didn’t like the previous administration. I’m happy to hear how this is better. mrossol

By  Ryan Saavedra,     DailyWire.com
 

Democrat President Joe Biden was mocked over the weekend for bragging about flying 70,000 pounds of baby formula from Europe to the U.S. as his administration has faced criticism for the shortage of baby formula across the country.

“Folks, I’m excited to tell you that the first flight from Operation Fly Formula is loaded up with more than 70,000 pounds of infant formula and about to land in Indiana,” President Biden tweeted Sunday. “Our team is working around the clock to get safe formula to everyone who needs it.”

Biden originally claimed on Twitter that his administration had brought in “70,000 tons” of baby formula which was later deleted, but not before it went viral on social media.

Biden faced a mix of mockery and intense criticism online for bragging about the situation.

“Over 10,000 children are born daily in the US, 20% of which will use formula within the first days of life,” Nicole Saphier, MD, wrote on Twitter. “The shipment is great, but let’s be honest, the supply won’t last more than a couple days.”

The popular conservative Twitter account Comfortably Smug wrote, “Biden has turned us into a third world nation where other countries are sending us relief aid.”

Other notable responses included:

  • Stephen L. Miller, political commentator: “Another Biden Admin historic airlift.”
  • Julie Gunlock, director of Independent Women’s Network: “The Biden admin created this mess…but sure, folks, take a bow.”
  • Ellen Carmichael, president of The Lafayette Co.: “Will never not be discomfiting to see other countries bailing us out for stupid policy decisions. This is America.”
  • Jesse Kelly, radio host: “The government causing a baby formula bottleneck with ridiculous regulations and then causing a baby formula shortage with incompetence and then acting like a hero for flying in baby formula is the most government thing in the history of government things.”
  • Preston Byrne, attorney: “If you just allowed European formula to be sold to US distributors you wouldn’t need the military to fly in pallets for show Abolish the FDA.”
  • Victoria Coates, former White House official: “Honestly I think it might have been better to just sit this one out and hope folks weren’t paying too much attention on a Sunday morning to your previous effort?”
  • James Jay Carafano, Heritage Foundation Vice President for Foreign & Security: “Only this White House could attempt to make virtue out of its incompetence.”
  • Tammy Bruce, Fox News: “You have officially turned our great country into Blanche DuBois, unstable and completely reliant on the kindness of strangers.”
  • Hans Mahncke, political commentator: “Probably the most humiliating tweet of all time (made even more humiliating by the fact that the millennials who wrote it are oblivious to how humiliating it is).”
  • Zack Kanter, political commentator: “It’s a reverse Berlin Airlift, where we’re blockading ourselves and flying in our own shipments to prevent the starvation that we’re at risk of causing.”
  • Sean Spicer, former White House official: “There has been a baby formula shortage in the US since January – we a[re] less than 10 days from June.”
  • John Cardillo, political commentator: “This senile idiot is impressed that third world countries are solving problems he and his handlers created.”
  • John Cooper, The Heritage Foundation: “How bad are things under Joe Biden? We have to fly in baby formula from Germany to make sure American babies don’t starve.”

https://www.dailywire.com/news/biden-slammed-for-bragging-about-flying-baby-formula-in-from-europe-turned-us-into-3rd-world-nation?utm_campaign=dw_newsletter&utm_medium=email&utm_source=housefile&utm_content=non_member_op_ed

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Fossil Fuels’ Forthright Defender

Illustration: Ken Fallin

The last thing most CEOs want is to court the wrath of politicians like Sen. Elizabeth Warren. That’s especially true of oil and gas executives, who try to appease their political opponents by talking up investments in renewable energy. Toby Rice is the rare CEO who seems to enjoy the political combat.

The 40-year-old leads EQT Corp. , America’s largest natural-gas producer. Last November Ms. Warren, in her fashion, fired off letters accusing him and 10 other energy executives of “corporate greed” for exporting liquefied natural gas.

Mr. Rice’s fierce nine-page response was chock full of data refuting Ms. Warren’s claim that gas exports increase U.S. energy prices. That assertion, he wrote, is “without merit” and fosters “a narrative that politicizes natural gas and associated infrastructure in a manner that runs counter to one of our key collective goals, one we know you share—addressing climate change.”

Ms. Warren and her ideological compatriots style themselves champions of the little guy and the environment. Nonsense, Mr. Rice says: Their policies mean higher prices for consumers and more carbon emissions. “If you’re blocking pipelines, you’re blocking the biggest green initiative on the planet,” he says in a Zoom interview from his office in Carnegie, Pa., a former karate studio in a walk-up above a liquor store. In the background are colorful portraits of Andrew Carnegie, Nikola Tesla, Cornelius Vanderbilt, John D. Rockefeller and J.P. Morgan.

Mr. Rice is a general on the frontlines of an energy war whose outcome matters more than ever after Russian’s invasion of Ukraine. The anti-fossil-fuel left is waging a multifront campaign to keep natural gas “in the ground,” as activists like to say. Along with political efforts, they are leveraging the administrative state and courts to block new pipelines that are essential to deliver more natural gas to customers in the U.S. and overseas.

Energy companies have already given up on two major pipelines in the Northeast (PennEast and Atlantic Coast) in the past two years. Even after winning legal challenges at the Supreme Court, they faced mounting costs from permitting and legal challenges raising different objections. “The 4,000 pages of permits that we have to submit have created 4,000 opportunities for environmental groups to attack,” Mr. Rice says.

He cites the Mountain Valley pipeline, which aims to deliver cheap gas from Appalachia to the Southeast. A three-member panel of the Fourth U.S. Circuit Court of Appeals keeps nitpicking the government’s environmental reviews, forcing the energy companies back to the permitting table. (The same three judges blocked the Atlantic Coast pipeline before the Supreme Court later reversed 7-2.)

The pipeline is more than 95% complete, and developers had aimed to bring it into service this summer. But litigation is delaying the final work and inflating costs. “They find themselves in a situation where that project cost was originally $3 billion budgeted. Now it’s $6 billion,” Mr. Rice says.

Meantime, the environment will suffer because of the delays. There will be more greenhouse-gas emissions, because the gas the pipelines transport would replace coal power on the electricity grid.

Solar and wind power could fill some but not all of the gap, as they depend on daylight and weather. Fossil fuel is a necessary backup. “I don’t think residents in South Carolina, North Carolina, Virginia, Georgia, Florida recognize that a pipeline is being challenged in West Virginia,” Mr. Rice says. “Their energy security is being challenged because of people attempting to block this pipeline.”

Matters are even worse in the Northeast, including Ms. Warren’s state of Massachusetts. Three large pipelines capable of transporting enough gas from Appalachia to serve more than 10 million households in the Northeast have been blocked. As a result, the region must import LNG from abroad at much higher prices to heat homes and power the grid in the winter. (The Jones Act of 1920, a protectionist regulation of maritime commerce, limits the ability to move American LNG from the Gulf Coast to Northern states.)

Natural-gas prices one weekend this January were eight times as high in New England as in Appalachia. “We’ll do a deal with Senator Warren: Build a pipeline to Appalachia, and we’ll fill it for you at Appalachia prices,” Mr. Rice says, adding that it boggles his mind “that New England is burning oil to create electricity” in the winter and “that over a third of the residents use oil to heat their homes.”

Ms. Warren was one of 10 Democratic senators, seven of them from the Northeast, who on Feb. 2 urged Energy Secretary Jennifer Granholm “to take swift action to limit U.S. natural gas exports” to ease domestic energy prices. Mr. Rice shot off another blistering response, this time to Ms. Granholm. He made the point that an export ban would reduce the global LNG supply by roughly 22%, raising, not lowering, energy prices in New England and elsewhere.

“The problem is very straight forward,” he wrote: “The pipelines heading to New England are full, and as a result, we cannot physically flow that gas needed to meet growing demand without more infrastructure. That’s it. And the way to solve this problem is equally straight forward: allow the completion of pipeline projects.”

If Mr. Rice is more forthright than the typical CEO, perhaps it’s because he didn’t rise through the corporate ranks. In 2007 he and two of his brothers formed Rice Energy Inc. in his Pittsburgh apartment. Their father, a former BlackRock money manager with energy expertise, helped them scout land in Pennsylvania’s shale-rich country. “Our higher purpose back then—we were young guys with a lot of friends that fought in the war [in Iraq]—was, we wanted to help make America energy-independent,” he says.

The brothers bought drilling rights to some of the most productive land in Appalachia and built their company into one of the country’s top 10 natural gas producers. They also developed a colorful reputation. They played professional wrestler Hulk Hogan’s theme song, “Real American,” as the hold music at their headquarters, and named wells after monster trucks and comic book characters. When coal miner Alpha Natural Resources went bankrupt, they showed up at an asset auction donning Mickey Mouse T-shirts, shorts and blazers. (In our interview, alas, Mr. Rice is staid and professional in a white dress shirt.)

In 2014 the Rice brothers took their family-owned business public. A few years later, Rice Energy merged with rival Appalachian fracking company EQT to form the country’s largest natural-gas producer. Unhappy with EQT’s high costs, Mr. Rice and his brother Derek launched a proxy battle to nominate nine directors to the 12-member board. They won, and Mr. Rice became CEO.

“Giving people access to cheap, affordable, clean energy is the key to skyrocketing the quality of life,” he says. “There’s a very clear correlation: The more energy people use, the better the quality of life.” And that’s true everywhere in the world: “There’s three billion people around the world that have less electricity than it takes to run a fridge.”

He’s rolling now. “One thing I think that people don’t understand is how much energy demand there is in this world. And when solar and wind aren’t capable of meeting that energy demand, people will turn to their next option, which is coal,” he says. Annual emissions from coal are up 500 million tons over pre-pandemic 2019 levels: “To put that into perspective, that completely offsets all of the emission reductions we’ve done from solar and wind here in the United States in the last 15 years.”

When Russia slowed gas deliveries to Europe last fall, the Continent had few alternatives but to ramp up coal power. As gas prices surged amid a global supply shortage, Asian countries, especially China, burned more coal. Increased emissions from Chinese power and heating generation last year offset all emissions reductions in the rest of the world between 2019 and 2021. The world’s response to Russia’s invasion of Ukraine—barely three weeks after the senators wrote to Ms. Granholm—will further constrain fossil-fuel supply.

The only way for the U.S. to make a significant dent in greenhouse-gas emissions, Mr. Rice says, is increasing liquefied natural gas exports. By his calculations, the U.S. could increase gas production 50% and LNG exports fourfold over the next decade based on existing natural-gas plays. Replacing coal power overseas with American LNG, he says, would “have the environmental impact of electrifying every vehicle in the United States, putting solar on every household in America, and adding 54,000 industrial-scale windmills—like that would be double the U.S.’s wind capacity—combined.”

This could be done quickly and would require no technological breakthroughs. Already, he says, the climate impact of U.S. LNG exports replacing international coal over the past five years is greater than that of the U.S. solar industry from 2005 to 2019.

Most of the country’s 20 or so proposed LNG export facilities are on the Gulf Coast. But gas from Texas’ Permian Basin won’t be enough to supply them. So gas from Appalachia would have to be pushed through pipelines to the Gulf. Opponents will surely continue their effort to block any new pipelines. One solution is to build additional pipelines along rights of way for existing pipelines. That can fast-track permitting and minimize environmental disturbance. “There’s space in these right of ways to add another 3 feet worth of pipe,” he says.

The Biden administration’s energy policies are a study in contradiction. On one hand, the president says he wants to help wean Europe off Russian gas. On the other, his administration is making it harder to build more pipelines and LNG export terminals. The White House Council on Environmental Quality this week revised its National Environmental Policy Act regulations to require agencies to consider the “indirect” climate impact of infrastructure projects such as pipelines. That could make it nearly impossible to approve new pipelines.

Surging energy prices since the Ukraine invasion have led European politicians to recognize they can’t replace fossil fuels with renewables overnight. But American politicians haven’t received the wake-up call. “There’s signs of energy insecurity happening here in America too,” Mr. Rice says, pointing to New England’s high energy prices.

“I think, because a lot of people don’t see us—and that’s a good thing by the way, that’s by design—I think a lot of people maybe take us for granted,” he adds. “A lot of people maybe think that they can live in a world that doesn’t rely on hydrocarbons.” That goal is a long way off, if it’s possible at all.

Mr. Rice says his letters are intended to educate politicians. “When you attack oil and gas energy producers here in the United States, you’re attacking their customers, plain and simple,” he says. That makes “it harder for us to do what we do—and that’s to provide cheap, reliable, clean energy to the world. It’s going to have unintended consequences.”

Has he heard back from Ms. Warren? “Not yet. It’s been a couple of months. I’m still waiting for a conversation. I’m still optimistic.”

Ms. Finley is a member of the Journal’s editorial board.

https://www.wsj.com/articles/fossil-fuels-toby-rice-eqt-pipeline-natural-gas-lng-emissions-reduction-climate-change-warren-granholm-energy-prices-white-house-council-environmental-quality-11650634990?mod=opinion_major_pos7

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Sanctioning Russia could topple the West

UnHerd,  3/22/2022, by Thomas Fazi,  who is a writer, journalist and translator.

The most controversial aspect of the new sanctions regime is without a doubt the freezing of Russia’s offshore gold and foreign-exchange reserves — about half of its overall reserves — but even this is not unprecedented: last year, the US froze foreign reserves held by Afghanistan’s central bank in order to prevent the Taliban from accessing its funds; the US has also previously frozen the foreign-exchange reserves of Iran, Syria, and Venezuela.

So, taken individually, these measures are not as exceptional as they’ve been portrayed. However, never before have so many sanctions been deployed at once: there are already 6,000 various Western sanctions imposed on Russia, which is more than those in existence against Iran, Syria and North Korea put together. Even more importantly, none of the previous targets of sanctions were remotely as powerful as Russia — a member of the G20, and the world’s largest nuclear power.

Likewise, none of the 63 central banks that are members of the Bank for International Settlements (BIS) in Basel — known as the central bank of central banks — has ever been the target of financial sanctions. The BIS itself has even joined in on the sanctions in order to prevent Russia’s access to its offshore reserves. This really is unprecedented: since its establishment in 1931, the BIS had never taken such a measure, not even during World War II.

So what should we expect from the sanctions? Western pundits and commentators have little doubt: the sanctions will hamstring the Russian economy, sow discontent among the Russian people and elites alike, and possibly even cause the downfall of the Putin regime. At the very least, we’re told, they will hinder Russia’s war efforts. But history suggests otherwise: see Iraq, or more recently Iran. Far more likely is that this turns out to be the latest Western strategic miscalculation in a long list of strategic blunders, of which the United States’ inglorious withdrawal from Afghanistan is just the most recent example.

After all, Russia has been preparing for this moment for quite some time. Following the first wave of Western sanctions, in 2014, and partly in retaliation against them, Putin embarked on what analysts have dubbed a “Fortress Russia” strategy, building up the country’s international reserves and diversifying them away from US dollars and British pounds, reducing its foreign exposure, boosting its economic cooperation with China, and pursuing import substitution strategies in several industries, including food, medicine and technology, in an effort to insulate Russia as much as possible from external shocks.

True, Putin made the mistake of leaving around half of those reserves parked in foreign central banks, resulting in these now being confiscated. But nonetheless Russia still has access to more than $300 billion in gold and foreign-exchange reserves — more than most countries in the world and more than enough to cushion any short-term fall in exports, or prop up the rouble (for a while).

Moreover, the Russian central bank reacted to the sanctions by stopping capital flows out of Russia and nationalising the foreign exchange earnings of major exporters, requiring Russian firms to convert 80% of their dollar and euro earnings into roubles. It also raised interest rates to 20% in an effort to attract foreign capital. These measures are aimed at bolstering the rouble’s value and providing a flow of foreign exchange into the country. They appear to be working: while the rouble is around 40% of its value since the start of the conflict, the Russian currency’s free-fall seems to have come to a halt for now, even registering an uptick over the past two weeks. For the time being, Russia’s financial account — the difference between the money flowing in and out of the country — is far from disastrous.

Let’s not forget that the main source of Russia’s foreign-exchange reserves — oil and gas exports — has been excluded from the sanctions, for obvious reasons: for most European countries, Russia accounts for a huge part of their oil and gas imports (and other staple commodities), and there’s simply no way of replacing those energy sources from one day to the next.

In short, Russia runs no risk, in the short term, of running out of reserves and not being able to pay for its imports. But even assuming that the West decided to put a stop to all its imports from Russia overnight, there’s no reason to believe that this would bring the Russian military machine to a halt. The notion that “we are financing Russia’s war by purchasing gas and oil”, as the Finnish prime minister recently stated, is fundamentally misplaced.

As the economist Dirk Ehnts has observed, the Russian military machine, for the most part, doesn’t rely on imports (if anything, Russia is an arms exporter). It is sourced domestically and, like the salaries of its soldiers, is paid for in roubles, which the Russian central bank can create in an unlimited quantity, just as the Bank of England does when it comes to pounds.

Equally unfounded are rumours of an impending Russian default. In recent years, the Russian government has taken steps to reduce its foreign liabilities: its foreign currency-denominated debt amounts today to about $40 billion — a tiny amount compared with the size of Russia’s yearly exports of more than $200 billion in oil and gas. Any decision to default would be entirely political. We mustn’t forget that the very creditors expecting to be paid back in dollars are the same that have just confiscated a good part of Russia’s dollars — if the latter were to default on their payments, it would be an even bigger problem for their Western creditors. As with Russia’s oil exports, hurting Russia inevitably means hurting ourselves as well.

Moreover, thanks to the Russian government’s successful efforts at boosting domestic agricultural production, domestic food production now accounts for more than 80% of retail sales, up from 60% in 2014. This means Russia is largely self-sufficient food-wise. So even if its export revenues were to plummet (which is unlikely), the country wouldn’t go hungry — unlike the rest of the world — and would most likely be able to continue to finance its war efforts.

Might a selective ban on exports of specific high-tech Western components, some of which are bound to be used in Russia’s defence industry, prove more effective? Possibly. But Russia has been reducing the dependence of its military-industrial apparatus on foreign components and technologies for years. More importantly, both hypotheses — that Russia’s economy and military can be brought to their knees through export and/or import bans — rest on the flawed assumption that the whole world is on board with the sanctions. But that is far from the case.

While most of the world’s nations — 143 out of 193 — voted for a resolution in the UN’s General Assembly condemning Russia, the 35 countries that abstained include China, India, Pakistan and South Africa, as well as several African and Latin American states. These and many more countries — including several that voted in favour of the resolution, such as Brazil — have strongly criticised the sanctions against Russia and can be expected to continue trading with Putin. It’s frankly very hard to call Russia isolated when some of the world’s largest economies have refused to support the West’s sanctions regime.

China, in particular, has been very vocal in its support of Russia. Beijing is already the Kremlin’s main trading partner, and it alone can absorb huge quantities of Russian energy and commodities, as well as provide Russia with basically any industrial and consumer goods that the latter currently imports from the West. China also operates an alternative to the Western-managed SWIFT system called CIPS to manage cross-border transactions in yuan, which could allow Russia to partially circumvent the West’s financial blockade. Even though the yuan still makes up a small percentage of international transactions, its role is bound to grow rapidly in the coming years (consider the news that Saudi Arabia may start pricing its oil sales to China in the latter’s currency). All this helps explain why even Western financial analysts, such as Goldman Sachs and JP Morgan, predict a year-on-year contraction for the Russian economy of about 7% — bad, but hardly catastrophic (Covid caused a much larger drop in GDP for most countries).

However, much will depend on the policy response of the Russian government. Obviously, the withdrawal of many foreign firms and decline in foreign investments will increase unemployment. But the Russian government can cushion the blow by resorting to a “Keynesian” expansionary fiscal policy aimed at boosting domestic investment and supporting incomes. If ever there were a time for Russia to abandon its historically ultra-tight fiscal policy, as several Russian economists have been arguing for some time, it is now.

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America has won Europe’s war

By Thomas Fazi

Two weeks ago, I suggested that, in the short term at least, the US will benefit from the conflict in Ukraine. In the long term, however, it is slowly becoming clear that US-led global Western order will suffer. The West’s imposition of sanctions — involving not only governments, but also private companies and even allegedly apolitical organisations such as central banks — has sent a clear message to the countries of the world: the West will stop at nothing to punish countries that step out of line. If this can happen to Russia, a major power, it can happen to anyone. “We will [never again] be under the slightest illusion that the West could be a reliable partner,” the Russian foreign minister Sergey Lavrov has said. “We will do everything so as never, in any way, to be dependent on the West in those areas of our life which have a decisive significance for our people.”

Those words are bound to reverberate across the world, with dramatic implications for the West. As Wolfgang Münchau has warned: “For a central bank to freeze the accounts of another central bank is a really big deal… As a direct result of these decisions, we have turned the dollar and the euro, and everything that is denominated in those currencies, into de facto risky assets”. At the very least, it will inevitably push countries to diversify their reserves and increase their yuan holdings, in order to loosen the West’s grip on their economies and bolster their economic resilience and self-sufficiency. Even if it doesn’t push countries straight into Beijing’s arms, as is already happening with Russia, it will likely lead to the emergence of two increasingly insulated blocs: a US-dominated Western bloc and a China-dominated East-Eurasian one.

In this new pseudo-Cold War, “non-aligned” countries could find that they are in a better position to assert their sovereignty than they were under the American global empire. Forget “the collapse of the Russian economy” — this could be the result of the West’s new economic war.

https://unherd.com/2022/03/sanctioning-russia-could-topple-the-west/?tl_inbound=1&tl_groups[0]=18743&tl_period_type=3&mc_cid=4784fad75d&mc_eid=0ff3e7ea29

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For White-Collar Workers, It’s Prime Time to Get a Big Raise

WSJ, By Sarah Chaney Cambon, 2/21/2022

White-collar professionals are reaping big pay gains as worker bargaining power spreads across the U.S. economy and shows early signs of durability.

Wall Street banks are boosting compensation for employees. Consumer lenders are seeing their biggest pay bumps in more than a decade. Legal firms are raising wages aggressively as burned-out workers flee the industry.

Pay for finance, information and professional employees rose 4.4% in January from a year earlier, outpacing 4% wage growth for all workers, according to the Atlanta Fed’s wage tracker.

Workers in higher-wage sectors experienced the fastest month-over-month earnings growth in January, Labor Department data showed. Wages in the professional and business services sector—which includes jobs in management, law and engineering—rose 0.8% in January from a month earlier. That was well above a 0.1% wage increase in leisure and hospitality.

“For most of last year, wage growth was really strong for lots of low-wage workers,” said Nick Bunker, economist at jobs site Indeed. “Now, the overall labor market is just tighter and that is boosting the bargaining power of the rest of the workforce.”

Workers like Andrew Eberle are benefiting. Mr. Eberle, 30 years old, started a remote business analyst job in the Phoenix area in mid-2020, shortly before he graduated from a master’s degree program in analytics. He said he enjoyed that position but was spending a lot of time refreshing Excel charts; he wanted a position where he could more deeply analyze and visualize data.

Such an opportunity came last year as more companies shifted to longer-term remote work because of the pandemic. Mr. Eberle took a remote job as a business analyst for a California-based company in a role that boosted his salary to $80,000, a big step up from his previous pay of about $67,000.

“I feel like everything happened at the right time for me and where I was going,” the Chandler, Ariz., resident said. In his new position, Mr. Eberle analyzes contract-worker compensation data for big companies.

The pandemic economy isn’t all good news for workers. Annual inflation is running above 7%, the highest in 40 years, meaning rising prices are wiping out wage gains for many. Workers could start to see their extra dollars go further if inflation cools while wage growth remains elevated.

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Pay is rising, in part, because companies can’t find enough workers. The supply of labor shrank at the onset of Covid-19. It remains depressed because of an acceleration in retirements and millions of people sitting on the sidelines due to child-care issues, Covid-19 illnesses and burnout.

Many workers in the law industry, burned out from 90-hour weeks and holiday hours, left during the pandemic, said Chere Estrin, who runs a legal staffing firm.

A lot of law firms “are in a panic because they can’t get people to do the work,” Ms. Estrin said. “I have never seen anything like this.”

Chere Estrin, who runs a legal staffing firm, said many law firms are unable to find people to fill certain in-demand roles.

Some specialized workers, such as corporate paralegals, are in particularly short supply, in part because schools aren’t churning out enough graduates for certain in-demand roles, she said. As a result, some corporate paralegals can now demand nearly as much pay as an associate lawyer. Ms. Estrin is helping fill a senior corporate paralegal role for up to $195,000 a year, plus overtime, a hiring bonus and a year-end bonus—a higher rate than she has ever seen.

“They could come away with $300,000, easily,” Ms. Estrin said. “You could buy a house for that.”

Some economists are optimistic that more people will return to the labor force. Others don’t expect the supply of workers to quickly bounce back.

Labor constraints, such as population aging, immigration restrictions and changing work-life preferences, will linger, Alex Domash and Lawrence Summers of Harvard University said in a new working research paper. Meanwhile, businesses will continue to pay workers more as they seek to fill job openings, putting greater pressure on inflation, the two economists contend.

With the price increases, some individuals are coming out ahead even though many aren’t. For instance, workers who switch jobs in finance, accounting, technology and legal are often seeing pay raises that exceed inflation, said Paul McDonald, senior executive director at professional staffing firm Robert Half.

Mr. Eberle’s pay increase of nearly 20% is outpacing costs for many services, allowing him to spend on travel—including a recent trip to the Oregon coast with his wife—and other experiences.

“I feel like we have wiggle room to do things—to go out to eat dinner, to have date nights or go on weekend trips—and not feel crunched,” he said.

Still, Mr. Eberle is holding off on buying a car and isn’t putting a down payment on a house as prices surge. Mr. Eberle also noticed the $70 cost to fill up the tank of his Jeep Grand Cherokee is much higher than it used to be.

Economic research suggests there is a tight link between rates of worker resignations and wage gains. About 3.6% of workers in professional and business services quit their jobs in December, up from 2.8% at the start of 2021. That suggests wage growth in some white-collar roles could continue to run hot.

Job switchers are seeing the strongest wage growth, but companies are feeling pressure to raise pay for their current employees, too. Firms are trying to retain workers amid poaching attempts; in other cases, they are aiming to keep up with the rising cost of living. Annual wages for people staying in their jobs grew by 3.7% last month, up from 3.1% in January 2021, according to the Atlanta Fed.

Wall Street banks are paying up to keep their employees from jumping ship. JPMorgan Chase & Co. last month said it had spent an additional $3.6 billion on compensation in 2021.

“There’s a lot more compensation for our top bankers and traders and managers,” said JPMorgan Chase & Co. Chief Executive Jamie Dimon in an earnings call last month. “We will be competitive in pay. If that squeezes margins a little bit for shareholders, so be it.”

The Wall Street Journal wants to hear from you. Has your pay changed recently? Did you switch jobs or get a raise in your current role?

https://www.wsj.com/articles/for-white-collar-workers-its-prime-time-to-get-a-big-raise-11645439400?mod=itp_wsj&mod=djemITP_h

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