No sign of letup in U.S. hiring
Brisk job growth not spiking wages — yet
Are America’s employers at risk of running out of skilled people to hire?
The U.S. economy has become a seemingly perpetual job-generating machine, having steadily added workers for nearly eight years. Even with the unemployment rate now at 3.7 percent — its lowest point since 1969 — hiring hasn’t stalled. So far this year, job growth has averaged a robust 208,000 a month, up from a pace of 182,000 for all of 2017.
The trend has defied the predictions of most economists. Many have long warned that as hiring surged and unemployment fell, the pool of potential hires would shrink and trigger a bidding war that would ignite wage gains.
It hasn’t happened. Many people are still being hired each month. And pay raises, though rising, remain modest.
“Every single time that we predict job growth is going to start slowing and wage growth is going to start picking up in recent years, we haven’t gotten that right,” said Martha Gimbel, research director for the jobs listing site Indeed.
In July, America’s employers posted a record 6.9 million job openings, which actually exceeded the number of unemployed people. The abundance of openings suggests that companies expect to keep hiring.
At some point, many employers will likely feel they’re running out of skilled workers to hire. Just not yet. Here will be three signals that a labor shortage may finally be at hand:
Pay raises spike
Average hourly wages have risen 2.8 percent in the past 12 months. That’s basically keeping pace with the inflation rate for consumer prices. But the theory is that as the economy keeps expanding and employers find they need to pay more to attract employees, pay could jump, especially in some sectors of the economy that require heavily skilled workers.
Some companies are already taking action. Consider Amazon’s justannounced boost in its minimum hourly wage to $15 starting in November. Amazon’s rival retailers and warehouse operators, in particular, may feel pressure to raise pay, too.
Lots more people seeking work
One of the best measures of available workers is what’s called the participation rate. That’s the proportion of working-age adults who either have a job or are actively looking for one.
The participation rate for people defined as prime age — 25 to 54 years old — was 81.8 percent in September. That is below the peak of 84.6 percent in January 1999.
Sharper mismatch between openings and skill sets
If there already were a severe shortage of skilled workers, a broad mismatch would likely exist between the types of jobs available and the types of jobs people are seeking. But research published last month by the job listing site Indeed suggests that the degree of the mismatch has actually narrowed since 2014.
In examining resumes posted to Indeed, the researchers found that roughly one-third don’t match the available jobs. Though that’s a relatively high proportion, it’s less than in 2014, when the proportion was closer to 40 percent.
A shortage of skilled workers, like nurses, might now exist in certain sectors of the economy, Gimbel said. But a shortage doesn’t necessarily exist across the entire economy. If it did, the pressures to raise wages would be stronger.