The April 2019 Bureau of Labor Statistics (BLS) reported an unemployment rate of 3.6% with 263,000 new jobs. These job gains occurred in professional and business services, construction, health care, and social assistance. However, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.2 million in April and accounted for 21.1% of the unemployed. The all-important labor force participation rate declined by 0.2% age point to 62.8% in April. The employment-population ratio was unchanged at 60.6% in April and has been either 60.6 % or 60.7% since October 2018.
In addition, the number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 4.7 million in April. And 1.4 million persons were marginally attached to the labor force, little different from a year earlier.
Among those effected by the decrease of the unemployment rate are adult men (3.4%), adult women (3.1%), Whites (3.1%), Asians (2.2%), and Hispanics (4.2%). The jobless rates for teenagers (13.0%) and Blacks (6.7%) showed little or no change.
It appears that most fills are pilfers from other employers, which follows the trend of workers wanting increased wages by moving from employer to employer. There is pressure on employers to increase wages, and BLS reported 3.2% increases since January 2019. Yet total compensation is still driven by healthcare costs, which is rising at a three times the rate over inflation. Real wages are still at about the same rate as in the 1970s.
Given that the unemployment rate is decreasing, and employment is increasing, why are there more jobs advertised today than workers available? Although baby boomers are still averaging 10,000 retirements a day, it appears that the available workforce is not growing as in the past year. If it were, the unemployment rate would have increased, not decreased. The new retirees may feel more comfortable in their financial capacity, especially with the current state of the stock market, that they do not need to return to work.
There is also a question of millennial males not joining the workforce. 25- to 34-year-old men are lagging in the workforce more than any other age and gender demographic. BLS has estimated that about 500,000 more should be in the workforce, but they are not. It appears that disability and training are the top two reasons they are not there. “At some point, you can have a bit of an effect of a lost generation,” according to David Dorn, an economist at the University of Zurich. “If you get to the point where you’re turning 30, you’ve never held a real job, and you don’t have a college education, then it is very hard to recover at that point.” Millennial males remain less likely to hold down a job than the generation before them, even as women their age work at higher rates.
More women are going to college and graduating than men. Women are more likely to take on higher skilled jobs than men, but societal issues of caring for family, for example, childcare and elder care, still hang strong on women, and is a major cause for pay inequality. Flexible workforce policies are important. Employers that push parental leave as opposed to maternity leave will fare better in the long-run, as long as they merge the parental leave policy with other policies so both men and women are not penalized by being off work.
Further, college degrees may not be the answer to the missing male issue. Employers need to focus on nontraditional learning to attract and grow the workforce. Many jobs are advertised needing a degree when they do not, because it is a buyers’ market. Employers need to relook at the jobs again and determine if a degree is really necessary. This degree issue is a systemic problem today. Moreover, certifications (especially IT positions) and apprenticeships should be in the employers’ arsenal to grow a workforce. For those jobs that need degrees, stretch and development mentoring, in-house learning, and tuition reimbursement need focus. Finally, employers need to focus on a new reality and career lattices to demonstrate the possible ways of growing in the organization.
Source: BLS 5/3/19, Bloomberg 11/2/18