There's a lingering frustration for workers in the American economy right now. Perhaps nothing explains it better than a British soccer club that consistently infuriates its fans. This is a sad truth for everyone involved — the fans and the workers — and sadder still, it's been true for several years running.
The problem, in the case of the team and of the economy, is unwillingness to spend money. The club isn't paying to get new players. Businesses aren't paying to fill jobs fast enough to keep up with the new job openings they keep posting. And in both cases, failing to spend now could end up hurting profits later.
The club is called Arsenal. It resides in North London, it is owned by an American entrepreneur and it basically prints money every year. This is important, because in England's Premier League, teams usually need to spend a lot of money to keep making a lot of money. Big-budget teams almost always win the league, and this year, rivals like Manchester United and Manchester City are shelling out record sums to bring in superstar players while Arsenal has spent barely a third of its budget.
It is that unwillingness to spend that has so infuriated Arsenal fans, including this economics correspondent. The problem appears to be that the team's longtime manager, Arsene Wenger — an economist! — loves to buy players for less than their apparent market value and hates to pay out large sums, even when the market demands it.
"I understand boss Arsene Wenger is a man of principles, who refuses to pay massive fees for players he thinks are overpriced," former Arsenal player Ian Wright wrote in a column recently. "Yet with the cash in the Premier League now, you HAVE to splash crazy money to get your man, like it or not."
This is a familiar story for Arsenal fans. In August of 2013, after a demoralizing 3-1 loss at home, fans showered Wenger with a chant: "Spend some f---ing money." In a Wonkblog column, I described that as a metaphor for the U.S. economy — an economy where jobs were opening up much faster than employers were moving to fill them, a practice that kept unemployment higher than it should have been and wage growth suppressed.
Mind you, this was three full summers ago. Since then, the economy and Arsenal's fortunes have both improved to some degree. U.S. unemployment has fallen below 5 percent and wage growth is just starting to pick up a bit for American workers. Arsenal finished second in the Premier League last year.
But in both cases there's a clear sense from fans/citizens that things should be better.
U.S. job openings continue to increase at a much faster rate than hiring does. In other words, even with the improving economy, companies remain very hesitant to fill those jobs they're posting. You can see that illustrated here:
If hiring was keeping pace with openings, we'd see even lower unemployment in America, faster-rising wages and, quite possibly, faster economic growth. (The wild card there is the question of how much more productive those newly hired workers would make their companies.)
Presumably, companies post openings because they believe new workers can help their bottom line. If that's true, then companies who drag their feet on hiring, in search of "bargain" employees, may be missing out on profit opportunities — and forced to pay even higher wages when they finally decide to fill the jobs.
As Nick Bunker, a policy analyst at the Washington Center for Equitable Growth (and Arsenal fan) puts it, "It’s the U.S. labor market equivalent of Wenger finding it harder to grab some young attacking midfielder hidden away" in the French league.
In other words, the time for bargain-hunting may be ending for American companies. It's probably over already for Arsenal. The team started its 2016-17 campaign with a loss at home and several big holes still to fill on its roster, including a central defender and a striker.
If the season goes south, Arsenal could be out a lot of money. Teams reap huge windfalls for finishing at the top of the Premier League. They qualify for a lucrative tournament that pits Europe's best teams against one another, they sell more merchandise and they can more easily raise ticket prices. That's a big incentive to spend now, especially for Wenger: If the team's fortunes don't improve, he's likely out of a job at the end of the season. Ownership would need to bring in a big name to replace him — someone who, presumably, wouldn't come cheap.