A wanted sign is posted outside of work near the Memorial Day in Wildwood, NJ.
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Lower-than-expected April employment statistics fueled speculation of a labor shortage in the United States, with some state officials saying Declare early termination For strengthening unemployment insurance.
But predictors who want a clear May aggregate result may be in trouble.
According to economists, it’s hard to draw conclusions about persistent weaknesses or labor supply issues from data released Friday. The May report provides some somewhat inconsistent data points. They said.
“It’s a Rorschach test,” said Nick Banker, an economist at Indeed, a job site. “It’s a lump of ink drawn on a piece of paper, and everyone sees a different image.”
For example, there is a heading number: US Economy Added 559,000 people to salary in May..
On the other hand, some observers may use data points to suggest that workers are not returning to the workforce as quickly as they would expect.
Employment figures fell below the estimated 671,000 economists. At that pace, it will take more than a year to regain all the jobs lost after February 2020.
Meanwhile, employment growth accelerated in May and new salaries doubled from April. The recent recessions have been characterized by long-term job recovery, according to economists.
Employment growth in May was also close to the average for the last three months, suggesting that it may have been as expected, Banker said.
“I think this is a story of expectations and reality,” he said. “The pace of growth is eye-catching to the viewer.”
According to Daniel Zao, senior economist at the job and job site Glassdoor, the most prominent evidence of labor shortages in the May employment report will be wage increases, especially in labor and hospitality.
Rising wages suggest that companies struggling to hire are paying more to attract workers.
For example, hourly wages for non-managerial positions in this sector, such as restaurants, hotels and bars, have risen nearly 9% over the past year to $ 15.87. (Revenue increased $ 0.19 per hour from April.)
This growth is important, as employment issues are most widely reported in leisure and hospitality, Zhao said.
However, this rise may not be due solely to corporate salary increases.
Chips may explain salary increases as restaurants and bars return to pre-Coronavirus customer capacity, according to Josh Bivens, head of research at the Institute for Economic Policy, a left-hand think tank. high.
“Since December 2020, rising tip income, rather than rising base salary, is likely to fully explain the rise in wages for restaurant and bar production workers and non-supervisors.” I have written Friday.
In addition, leisure and hospitality jobs increased by 292,000 in May. At the same time, it was a slowdown from the 328,000 jobs added in April.
Critics of the labor shortage debate point to other data points, such as average working hours being relatively flat. (Companies tend to spend more time on existing employees if they can’t onboard other staff.)
“Unfortunately, [May] The report cannot end this debate on labor shortages, “he said.” Both sides have ammunition to use to reinforce their debate. “
Employment problems are likely to be temporary, according to economists, as long as there is a labor shortage.
Twenty-five states have completed strengthening federal unemployment benefits earlier than their official expiration on September 6 to encourage re-entry into the workforce.
The earliest time for all states to be headed by the Governor of the Republican Party is June 12.
“The loudest source of speculation [for labor shortages] Erica Groshen, a labor economist at Cornell University and a former commissioner of the Bureau of Labor Statistics during the Obama administration, said, “Weekly unemployment benefits supplements encourage many to stay home. “. It’s simple. “
Economists have pointed out many other factors that may be preventing workers from returning to the workforce. Childcare obligations, ongoing health risks, health complications of long-distance carriers of the new coronavirus, early retirement, career changes or reassessments. The past percentage of workers who are expected to be dismissed and recalled to their previous workplace.
However, experts say it is impossible to quantify how much one of these factors plays during the economic recovery.
“These factors interact with unemployment insurance, which can take time for workers to rethink their careers, find jobs in new industries, and negotiate higher wages, but of employment. It could slow growth and prolong long-term unemployment. ” according to To Harvard Economists Jason Furman and Wilson Powell III.
Is there a labor shortage? What the May Employment Report Tells You
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