June jobs numbers are out showing payroll employment up by 850,000, more than economists had expected. But the unemployment rate, at 5.9%, is up from May’s 5.8%. According to emailed commentary from Ryan Detrick, chief market strategist for LPL Financial, which thinks there’s the potential for a run of a million jobs a month, expectations were for unemployment to drop to 5.7%. And the number of unemployed persons rose from May’s 9.3 million to June’s 9.5 million.
Where are things going? In directions off from what hot takes on high-level figures might suggest, no matter who’s tossing them out and what their agendas are.
The employment picture for a white woman is upside down for that of a black man. Instead of treating all employment as a general bucket and average figures, elected officials, business executives, civic leaders, and, yes, ordinary citizens need to consider what this means. Many are hurting far worse than others. Strategies that ignore the differences aren’t acceptable.
Jobs outrace the number of people
A common jobs trope has been that overly generous unemployment has allowed people to slack off and live on the (temporary) dole. But patterns are longer-lasting than “Oh, I guess the pandemic is over, everyone back into the job pool.” There may not be enough people available.
Brad McMillan, chief investment officer for Commonwealth Financial Network, in his own emailed commentary, considered whether a long-standing assumption, that there are more workers than jobs, might be off base. He put together some interesting comparisons.
The number of people being employed no longer keeps up with job creation.
The greater the number of jobs per unemployed person, the more choice they have. When there is only a fraction of a job per person, workers must compete more for a position.
Here’s how McMillan puts the implications:
When times are good, job openings are high and the number of unemployed is low, which makes sense. Note, however, that over the past couple of decades, the number of unemployed people has stayed roughly constant, while the number of job openings has trended up. The economy has continued to grow, while the number of available workers—workers who need a job and are motivated to take one almost regardless of pay—has stayed roughly constant. The number of jobs has kept growing, while the number of available workers has not. And that gives us a significant clue as to what is going on.
My take: as the ratio gets close to one worker for each job and the economy depends on having fortuitous matches between people and positions. But that never works broadly. There will be mismatches in geographic areas, skill sets, pay expectations, schedules, and more.
Looking at the patterns, though, where once workers would be out of luck, as there were so many more available for the same positions, now it’s employers on the bad end of statistics.
Many have been assuming that the problem in getting people into jobs to keep the economy moving was personal circumstances. Those siding with employers might say that lazy people were sitting home and watching television while collecting government paychecks. Those with employees would say people had gone out to get better jobs or they were taking care of someone or worried about their health.
Instead, maybe the economy has outgrown the population, especially with a lower birthrate and years of practical opposition to immigration into the U.S., rather than some more easily cured condition.
