Employment numbers tend to become a political football. Democrats point to nearly eight years of steady job gains, while Republicans point to declining labor participation rates and underemployment. Neither side is being completely factual when it comes to the current state of the U.S. employment market and that’s a problem.
It’s a problem because work is such a big part of your life and you can’t make good decisions about keeping one job or jumping to another without a realistic view of what’s going on in the labor market. Republicans were quick to seize on the May job creation numbers but got strangely quiet when it came out that first time unemployment claims dropped for the sixty-sixth time in a row, the longest streak under 300,000 since 1973. The real danger in mixing politics and news is that it can lead to bad decisions. So, what is really going on in the U.S. labor market and how do you play it?
A lot is made about that number somehow reflecting a bad employment market but that’s not necessarily the case. The record low workforce participation rate was in 1954, a time that many look back on as some of the most productive years in U.S. history. Why was the labor participation rate so low during the nation’s biggest boom years? Just look at any TV show from that era. Dad could make enough money by himself to support the family and mom could stay home and raise kids, take care of the house and manage the family budget. As it became more difficult to make ends meet on one salary, more women entered the workforce raising the labor participation rate. As America ages, the fact the workforce is declining isn’t necessarily bad. That means older Americans don’t feel the need to work longer. That should mean there are more job openings and, sure enough, the number of job openings matches the all-time high.
Layoffs At Record Lows
As the unemployment rate continues to fall, it’s inevitable that the pace of hiring would taper off. Companies aren’t hiring because they can find the people they want. You can tell that’s true because the risk of losing your job is the lowest it’s been since before the recession.
Wages Are Growing
Companies are also hedging hiring because of wage growth, on track to the be the highest in a decade. The wage gains are coming despite weak growth in worker productivity. That means companies are paying more for even marginal employees and they’re afraid to let anyone go for fear that replacing them will be difficult and expensive.
How To Play This Market
How you play this market depends upon what type of employee you are. If you’re a real go-getter with a high value to the organization, now is the time to be looking to boost your income. You can give yourself a raise by either by negotiating a higher salary where you are now or, more likely, going somewhere else where they recognize the value of top talent. I hate to use the trite phrase “write your own ticket” but that is, essentially, what’s going on at many companies.
If you’re a marginal employee it’s probably because you don’t like your job. If that’s the case, then now is when you should be investing in new and in-demand job skills. The layoff risk can rise dramatically but drops only slowly. So, make sure you have a plan for an in-demand career field before the layoff ax comes down. If you’re stuck in a job you hate when the economy tanks and layoff risk shoots up, you might be stuck there, maybe for years.
Right now there’s a narrow window that’s looking good for employees looking to make a change, but it’s not going to last. Plan your play and get it done; don’t waste time. A sudden reversal in the economy can happen at any time, and you don’t want to get caught during an employment tide change.