Wednesday

Labor Market Trends

As the United States Economy begins to re-open, more individuals are being hired, and schools across all states plan to re-open in the fall; we have many reasons to feel excited. And we should; life looks to return to some resemblance of normalcy. In May,, jobless claims have seemed to enter in a lower trend(lower than economist forecasts). This can be viewed as a positive sign as more individuals return to the labor force,, and there's a decrease in individuals applying for unemployment benefits. On the other side of the convention, some employers have found it difficult to attract workers to their job openings. Reports have shown that these can be the result of many reasons, among them are, workers may be fearful of getting sick until guidelines are lifted across the board, family engagements at home may result in a parent staying home to take care of their child, unemployment benefits increasing the reservation wage of the individual and shifts within career outlook. These factors may have played a role in a gap in supply and demand for labor, but of the group, the one I'll be talking about today will be the shift in a career outlook. The relationship between employer and employee can be described as an incomplete contract because the employer has the upper hand in the power dynamic. However, I believe that for one of the first times, within the U.S economy, the employees have a bit of an upper hand within some industries. I think during this time that individuals may have decided to reconsider their career options. Depending on the state(lockdown restrictions and business closure mandates were longer in some states, and some states didn't have such limits), the groups of workers who may have been furloughed may have taken this time to ponder on whether or not they would like to be within this field long-term. Some workers who may have been in physically demanding roles would now like to have the flexibility of a career that is not as physically demanding. Some can turn to temporary job agencies within their respective states and see if there is available training. Or there may be online courses offered for various skill sets that may require more technical capabilities. Even rewarding trades that can be entered into that do not require college degrees can be expensive and may not be worthwhile for some individuals. This form of change may be more uncomplicated for the younger ages of the population and can be advantageous to those with college degrees looking to gain their first full-time job from a previous engagement or. As the U.S economy gets back on its feet and consumer demand picks up, this can cause a problem for some employers who cannot fulfill the demand for their goods and service. With capable workers essentially sitting on the sideline, what can be done to get them to get back into these careers? A combination of higher pay and benefits and improved working conditions seems to be a consensus view on the way to get there. Is it that simple for businesses to just increase wages and expect to have groups of interested candidates coming at their door? It may be for some industries; however, this hasn't seemed to be the case within fast-food and various retail outlets. Some employees have stated that they have no plans on returning to those highly stressful environments due to a lack of compensation to account for the toll on their physical and mental framework, even noting that some of the new hikes in wages have not enticed them enough. It has been reported that supply chain disruptions have led to shortages within industries such as automotive, leading to increases in used car prices. However, if businesses are understaffed, they will not be able to meet the demand of their consumers along with potential disruptions on the production or allocation of raw materials; these can aid to pressures of prices increasing or real wages decreasing. Rising wages may result in increased prices for the consumers, aligning with views that we will see increased inflation in the near-term future.