The Wall Street Journal asks Is America Running Out of Unemployed People to Fill Jobs?
For every job opening in America, there’s now barely more than one unemployed person available to take it. In mid-2015, there were 2.3 million more unemployed people than open jobs. By January, the gap had narrowed to 372,000.
Pool of Potential Workers
There is a huge pool of workers as shown by the following Advisor Perspectives chart on the Labor Force Participation Rate.
In every age group except 55 and over, fewer people are working on a percentage basis than in 2000.
Many of them are not counted as “unemployed” even though they want a job. Why?
Wanting a job is not enough to be counted. Nor is looking for a job on Monster or other places. Before the BLS counts you as unemployed, you actually have to apply for a job, send out a resume. or have an interview.
Admittedly, many of those who are not working are unskilled. However, fast food places and most retail trade jobs do not require skills other than to show up for work on time and be polite to customers.
Aging Workforce
The biggest differences in that chart are in age groups 55-64 and 35-44.
Age group 35-44 constituted 27% of the labor force in 2000 but only 21% in 2017.
In contrast, age group 55-64 constituted 10% of the workforce in 2000 but 17% in 2007.
People are working longer and longer.
Most have to because they did not save enough for retirement. Also, companies like older workers who are on Medicare or have no dependents.
Overexpansion
Thanks to cheap Fed-sponsored financing, companies over-expanded.
Retail companies need employees even though they are getting their clocks cleaned by Amazon.
Such over-expansion accounts for much of the job needs.
Job Gain Recession?
If we have a recession, even a mild one, in which there are not significant job losses, the crush on earnings rates to be massive.
The lead chart suggests a different outcome.
We are nine years into an expansion, with the economy slowing and the Fed intent on getting in three more hikes this year.
Take your pick. Either way, the market is hugely overpriced.
Mike “Mish” Shedlock
If I have a job opening and fill it by taking an employee from another business, then that other business has a job opening. The number of job openings is not reduced.
Lots of guesses and assumptions in almost all government projections, statistics, and models. Believe them at your own peril.
What about those with a student loan, and are spending time in one of the institutions of higher learning. Student loan debt didn’t balloon to over a trillion for nothing.
Good Point. Obamacare reduced hours!
It’s a far more dangerous time for the marginally-skilled than they may realize. Virtually every highly repetitive task can now be automated, and many automation projects will be commissioned in the coming inevitable ‘kitchen sink’ quarter as the Fed begins taking the punch bowl away in earnest.
But you didn’t include age 35 & under which has a larger percentage working (and in higher paying jobs) than in 2000. If you work in NYC or Boston you will see this is true.
When a job cannot be filled, ask “At what wage?”. If wages are bid up any position can be filled by incentivizing someone doing that job elsewhere to switch.