The jobs mismatch
One of the most prevalent storylines throughout the pandemic, and even more so recently, has been the proposed jobs crisis we’re facing in America. Unemployment remained relatively high, as were open positions and help wanted signs.
But as unemployment is coming down from the 14.8% high in April of 2020, we’ve uncovered some systemic issues in the jobs economy.
What the data is telling us
An “ideal” unemployment rate, if there truly is such a thing, is considered to be somewhere between 4-5%. And in September, we’ve fallen back within this range at 4.8%. Healthy right?
Not so fast. Over 7.7 million Americans are still unemployed, and more than 34% of them have been for more than 6 months. And on the flip side, the latest data shows there are more than 10 million job openings—a record number of open positions.
With more jobs open than people to fill them, what gives? Why the mismatch?
- Worker leverage: More job openings than unemployed usually means worker leverage. We had prolonged and bolstered unemployment benefits throughout the pandemic, which may have helped the savings rate rise over the last 18 months.
- We’re reassessing work: All that leverage is driving workers to think about work and life differently in this new era. It’s not that we don’t want to work, but that we’re reassessing what work means and how to fit it in our lives in a way that better aligns with our values. We're talking ideological shift here as we continue to witness a record number of people in the US quit their jobs (4.3 million to be exact in August 2021).
There’s a big difference in microeconomic solutions and macro ones and no singular way to fix this on a national level. But we're seeing businesses and employees take it upon themselves to figure it out. For example, some businesses are increasing wages, bolstering work benefits or operating with fewer staff. And employees are looking to change careers, seek out remote work or start their own business.
Ultimately though, it’s complex. Living in a system of ideological patchworks, our eyes are opening to new post-Covid realities. As businesses keep fine-tuning their offers to employees, the jobs economy will probably be alright. But if the labor market continues to skew, the economic recovery could be challenged.