The ratio of the employed to the unemployed is a measure that economists use to determine how tight the labor market is. A low rate means that there are few job seekers and many vacancies, and the demand for labour is strong. In some industries, wages are rising for workers who are lucky enough to work from home for a fee. The US labor market is at full employment, with an unemployment rate of 4.5 percent, according to the Bureau of Labor Statistics.
That is weaker than in previous booms and has sparked debate among economists, with some researchers arguing that the labor market is not as strong as the unemployment rate suggests. Wage growth has a big impact on the US economy because it suggests that labor markets must be very tight for workers to see significant wage gains. A tight labor market can shift bargaining power and boost wage growth, as employers need to make better deals to compete with workers.
This is especially true for black workers, as their incomes are more responsive to labor market volatility. We believe this could have a significant impact on US labor markets, where aging workers are historically one of the fastest growing demographic groups, and are expected to account for nearly a quarter of all workers by 2026.
As older workers increasingly leave the workforce, it is becoming increasingly important to attract, develop and retain younger workers. Hiring and retaining older workers is invaluable to employers because they acquire institutional knowledge and skills transfer, increase age diversity and contribute to improving labor productivity. We believe that those experiencing an ageing workforce – both in terms of attractiveness of younger workers and the associated growing skills gap – could be most affected by this trend.
The layoff rate measures the percentage of US workers who decide to leave their jobs within a month, as measured by the percentage of employees with at least one year of work experience.
The rate of withdrawals indicates that most withdrawals are voluntary and indicate a change from one job to another rather than a change in the quality of the job itself. During a boom, workers are more likely to change jobs or find a job that is closer to their desired income than their old one, opening up vacancies for other workers. As a result, those who quit not only have more experience than employers must offer to compete with these workers, but also have a greater degree of control over their jobs.
This will mean more choice for job seekers, effectively giving them more power over the choices and organisations they work for, and more control over their pay and benefits.
According to the Wall Street Journal, employers who force layoffs expect the cuts to be temporary, a departure from the economic downturns of the 1990s and 2000s, which mostly saw permanent layoffs. Initial reports suggest that most large employers plan to hire as many, if not all, of their workers as possible. The public authorities will require employers to be aware of whether the redundancies are permanent or temporary – and at the same time to give us an indication of employers’ attitude to the labour market.
The latest Employment Report, shows the employment gains the US economy has made over the past two months. Today’s JOLTS release provides data for the whole month of June, showing, for example, that there was no change in the pace of redundancies between May and June and that the hiring rate decreased compared to the previous months, but that the number of vacancies continued to recover in June.
Here’s what we can tell ourselves about how workers and employers have experienced economic booms and busts, and how this recession differs from previous ones. The fact that union approval has fallen is undoubtedly a sign of a declining ability of workers to exercise collective power.
There is also evidence that other factors, such as the financial crisis and the recession itself, have contributed to the weakening of organised labour. Public opposition to the auto industry bailout, for example, has linked financial problems at automakers to union contracts, including higher wages and insurance costs.
Paradoxically, many business leaders continue to focus on unqualified people with the right skills.