September job report Is released The Bureau of Labor Statistics (BLS) has shown that August’s disappointing job growth is not a problem. In the age of hasty reporting, inspired by the 24 hour news cycle and politically armed talking point, we should always consider any single data point with a big grain of salt. Two in a row, however, suggest that a trend may be created, guaranteeing more careful attention.
For the reason that we do not understand well, the labor market may be moving towards slower growth, which is driven by the shortage of available workers.
The most important problem facing the labor market is the return of workers – or lack thereof. Recent BLS job openings and labor turnover surveys show that businesses are looking to set a record 10.9 million Jobs in July. That’s a wonderful number 44 percent more Than the pre-epidemic record. It also stands against it 8.7 million The number of workers officially considered unemployed in July, which fell by September.7. less than a million.
That’s where the problem lies. Compared to the pre-epidemic labor market, there are 3.1 million less Who are currently participating in the workshop. But a simple-epidemic-pre-epidemic comparison is not appropriate, as it does not include or address the retirement of older workers and young workers who have joined the workforce in the last 19 months. Pre-epidemic trends Suggest to increase the number of employees to about 5.75 million at present.
We certainly cannot ignore the shock of the labor market caused by Kovid-1. The epidemic seems to have inspired many older workers to take the expected retirement (and who can blame them?). Preliminary data showed a Retirement In April 2020, and After analysis Assumes that 1.7 million The BLS survey identified more people as retired than predicted a pre-epidemic trend.
So let’s say the workforce is smaller than about 4 million workers, otherwise it should be. If all of these workers were actively looking for jobs and thus were counted as unemployed instead of being outside the workforce, the current unemployment rate would be 7.1 percent.
Against this background, the big fall Unemployment rate From August to September (5.2 percent to 4.8 percent), relatively unchanged Labor force participation rate, An obvious cause for concern. Workers are not joining the labor market even after most of the reasons for reluctance have been reduced.
Perhaps the biggest obstacle for many unemployed workers is the fear of Kovid-1. But now that free and effective vaccines are widely available for adults and adolescents, the argument is increasingly sounding like an excuse. Booster shot Available even for those who are now at high risk. Delta diversity complicates summer fears, but its effects are often understood to affect vaccination, many of whom do not seem particularly concerned about the disease.
The second-most notable reason for staff unemployment was the lack of childcare due to distance schooling. But most of the school system has again started teaching privately, with New York City being the largest in the country, which is significant Remote learning options not included When classes begin in mid-September. In fact, Most school districts Already classes were given in person last spring.
The first week of school at NYC’s private school coincided with the September BLS job report data collection, which means schools that started late may return to some staff workplaces. But the validity of this argument is also declining over time, and the lack of child care as a systematic obstacle for carers to return to the workshop should be effectively addressed at this point.
Its generosity Federally expanded unemployment insurance (UI) is the third process that can prevent return to the workshop. The worst mention of this truth is persuasive Refutation By some scholars and ethicists, who argue that the first two arguments were much more important.
The September job report adds fuel to this fire, as the expanded UI benefits were exhausted a week before the data was collected. Lacking a resurgence in job growth, pro-UI pundits argue that the benefits were not preventing people from working.
If this is true, we face a real dilemma: our best explanations for why the workforce is not quickly returning to its pre-epidemic state will all become invalid. However, we should not be so quick to discard the UI-based explanation.
Federally expanded UI programs are famous Exceeded previous income For many workers, and there are Lots of anecdotes Employees squirreling away extra cash for the future. This is a good strategy Hold on Instead of bringing the first one instead of offering a high quality job.
In reality, all three arguments are probably still important, but the disintegration of the federally expanded UI facility seems to have the biggest impact today, even after the end of federal programs.
This leaves the question of how long it will take for the 4 million missing workers to be motivated enough to rejoin the workforce. My fear is that the lack of labor combined with customer demand will motivate employers to move more quickly to adopt automation and labor-saving technologies. As a result, the last unemployed workers may discover that the job they have been waiting for has evaporated. A classic case of early birds after all.
We should also consider that perhaps the economy has entered a whole new paradigm – in which a subgroup of workers has discovered that they can get very little, and who see leisure time as an adequate trade. After all, preferences change and markets change with them.
In short, the single reason why staff growth is so slow, or where there are all “missing” workers, is that no one can officially list them. But the more information available, the closer we should look. After all, the future comes one day at a time, and not fast.