Employment and Unemployment
If you follow me on LinkedIn or Twitter (and thank you for doing so), you know that I post economic updates. My posts include links to the Employment Trends Index® (from The Conference Board) as well as government unemployment numbers. I don’t pretend to understand all of the storylines behind the numbers, but the numbers over a long period of time tell a story and raise questions.
The most recent numbers
- The U.S. unemployment rate is 5.9% (June number – see https://stats.bls.gov/eag/eag.us.htm).
- The unemployment rate for people 25 and older with a 4-year degree or higher is 3.5% (June number – see https://www.bls.gov/news.release/empsit.t04.htm).
- The Minnesota preliminary (not finalized) unemployment rate is 4.0% (June number – see https://stats.bls.gov/eag/eag.mn.htm).
- The Twin Cities preliminary unemployment rate is 3.8% (May number – the State of Minnesota is not necessarily fast when it comes to data – see https://stats.bls.gov/eag/eag.mn_minneapolis_msa.htm).
We can’t find people
The Conference Board offers varying webinars on the national and global economy. I attended one of their webinars on unemployment trends in order to better understand what is happening. While this webinar was a few months ago, the reasons for the unemployment numbers were partially addressed:
- Many unemployed people believe that their old job is waiting for them (they are on a temporary layoff).
- People fear getting COVID at work – so they stay home/collect benefits.
- (Less true for the summer, but . . . . . ) Previously working parents are finding they need to be at home being a teacher. These parents, if they are working, are considering leaving their jobs.
Supply, Demand and Options
The economy seems to be roaring back. While we are seeing an uptick in COVID infections, the majority of people seem to be aggressively seeking ‘normalcy’ – going out, attending events, seeing people, etc. That means many things – one of which is organizations that provide service to people out in the public are hiring again. It should be easy to ‘recall’ people or hire new people, but it is clear – it is not.
People are asking me why! (Why are they asking me? Because I look at and report on employment data consistently.) I don’t have a solid easy answer, other than to offer some thoughts:
- We substantially adjusted our lives over the last 18 months – most radically between March 2020 and April 2021. While we are trying to quickly change back, not everything changes (back) that quickly.
- If I was furloughed, I lowered my expenses and adjusted my lifestyle. So did the people I interacted with – my daycare provider, my spouse/partner, etc.
- People are still nervous! We saw COVID numbers decrease rapidly as most of us (at least in Minnesota) got our vaccines. We took off our masks and went back to some of the places we missed over the last year.
- The numbers are now going in the wrong direction (Delta Variant, etc.). Do I want to go back to my old job/my old interactions?
- I have the potential to make a similar income by not going to work.
- I don’t think that this is the #1 reason for the challenges of hiring people, but it is definitely on the list. Unemployment does not pay well. When you add the additional stimulus payment and the upcoming tax refund (if you paid taxes on last year’s stimulus payments) and factor in your changed lifestyle, you can likely get by for a few more months.
- People have choices! Employers are replaced people they laid off; many employers are expanding. People are retiring. Employers are also treating their current workforce better, including offering hybrid work options. If I am employed (new job or old job), staying is a very positive option.
No easy answer
This probably leaves you with more questions than answers. The situation will indeed get better – but slowly. The economic and employment recovery is underway, but nothing travels in a straight line.
If you have ideas relating to this post, let me know. E-mail me at david@abelnmagy.com. All input and ideas welcome!