The May Jobs Report had something for everyone.
President Joe Biden grabbed the 559,000 new jobs created, slightly below expectations of 650,000, as evidence that policies such as his $ 1.9 trillion US bailout passed by Congress two months after his taking office strive to get Americans back to work in a post-pandemic world.
“We have a chance to capitalize on the economic momentum of the first few months of my administration, not only to rebuild, but to rebuild better,” Biden said in remarks after the Bureau of Labor Statistics released the report Friday. “This is already clear: we are on the right track. Our plan is working. And we are not going to give up now. We are going to keep moving forward.”
Political cartoons on the economy
Progressives have argued that with 9.3 million people still inactive, much remains to be done, including the passage of a $ 2 trillion infrastructure plan and an additional $ 1.8 trillion proposed for education, childhood and health programs.
“The US bailout, adopted through the efforts of the Biden administration and Congressional Democrats, was the first step in helping our economy and communities rebuild better – and it worked,” Heidi Heitkamp, former Democratic senator and co-founder of One Country Project, said.
“With federal funding and assistance, American workers were able to start looking for new jobs and employers were able to reopen their doors and hire workers,” Heitkamp added. “However, the past few months have shown that to create sustainable job growth, we must continue to pass laws that grow the economy and invest in long-term, well-paying jobs.”
On the other hand, Republicans seized the record 8.1 million job vacancies and the 9 million inactive as evidence that the policies of Biden and his Democratic allies are skewing the job market. The No.1 piece in their minds is the increase in unemployment benefits by $ 300 per week, which will expire in September, and the governors of 25 states have said they will end prematurely.
“The failed policies of Joe Biden and the Democrats have given us another month the economy has fallen short of expectations as Americans see the prices of gasoline, groceries and other essentials rise. soaring, “the Republican National Committee said in a statement. “Biden and the Democrats are preventing Americans from re-entering the workforce and, therefore, slowing our economy. Fortunately, Republican-led states are leading the recovery and are open for business.”
Economists, labor market experts, business leaders and human resources officials say the answer may well be neither. After a unique disruption to the economy and daily life, they say a new normal could be forming.
“It’s literally one of the most complex job markets we’ve seen,” says Scott Hamilton, global managing director of Gallagher’s human resources and compensation consulting practice. “And it all happened in a very short time.”
An upcoming Gallagher survey of hundreds of employers found that nearly one in five employers have at least 50% of their workforce working remotely.
Many trends now facing employees and employers were underway before the coronavirus hit in early 2020, but have only accelerated since: growing numbers of baby boomers retiring, the US birth rate falling below replacement levels, more restrictive immigration policies and a change in the relationship between companies and their employees.
As a result, a mismatch has developed between demand for labor and supply, which will make it more difficult for the country to fully recover from the economic damage of COVID-19. Normally, a month that saw over 500,000 new jobs created would be something to celebrate.
“When is the addition of over half a million new positions disappointing?” asks Joel Naroff, President and CEO of Naroff Economics. “Since 1940, the economy has added more jobs than was created in May just 17 times, and seven of them have been added in the past year.”
But these are not normal times, as 22 million jobs were lost last year due to the recession caused by the coronavirus pandemic.
“The drop in the official unemployment rate should be seen as a matter of great concern,” said Michael Farren, economist at the Mercatus Center at George Mason University. “Unemployment is actually expected to rise as workers re-enter the workforce, given that vaccines are widely available and most lockdowns have been lifted. “
Farren added: “The labor market is still 3.5 million workers smaller than it was in February 2020, and an additional 2.25 million young people have become of working age in the past 15 years. months – the decrease in the size of the workforce indicates that there are still many people who are not even trying to find a job.
Meanwhile, companies continue to say they plan to increase hiring in the future.
A Manpower survey of more than 7,300 employers to be released this week found that US companies are expected to have the best prospects for hiring since 2000. Yet the Gallagher survey also found that employee turnover has increased over the years. Over the past 15 months, with 13% of businesses experiencing turnover rates of 30% or more, more than three times what was expected.
And a US Chamber of Commerce poll released Friday of unemployed Americans found that 30 percent said they had no plans to return to work this year, and 13 percent said they never expected to go back.
“Extrapolated to 9.3 million unemployed Americans reported today by the Bureau of Labor Statistics, that’s about 2.8 million people who will be left on the sidelines this year, of whom 1.2 million never expect to return. work, “the chamber said in a statement.
One of the obstacles to the return of workers is the obsolete attitude of the company and the professional demands. While this is not a new problem, it has been exacerbated by the pandemic, which has highlighted long-standing barriers to employment, such as lack of skills, childcare options. children for working parents and accessibility.
“Even before the pandemic, traditional views about what makes a candidate employable prevented skilled workers from seeking open jobs,” said Michael Hansen, CEO of Cengage, an educational technology company that helps companies train workers. “About 65% of jobs require a two or four year degree, creating stigma around non-traditional education pathways and shaking the confidence of job seekers.”
Cengage recently released its report on the employability of graduates, a investigation who found that more than half of new graduates are not convinced that employers should require a traditional degree to apply for most jobs, adds Hansen.
And while companies have generally said they are happy with the results of remote working during the pandemic, many still believe workers should return to their offices now that the pandemic is under control. Workers, however, continue to express a preference for flexible working hours and remote working options, suggesting that the two labor market players are not aligned.
“If you go back in time to March (of 2020), everyone was affected,” says Kathryn Petralia, co-founder and president of small business finance company Kabbage. “People took this time to figure out what they were going to do.”
And one of those things is the desire to work remotely, at least some of the time, and maintain a better work-life balance, according to surveys.
“That’s exactly what we’re seeing,” says Rebecca Croucher, senior vice president of Manpower and head of marketing for North America. “I personally recruit for about six roles, 100% can be remote. I feel relieved when I can put remote on display.”
Coursera CEO Jeff Maggioncalda said of the current job market: “What you are seeing is dynamism, an unprecedented pace of change. I think the new normal, the next normal if you will, we haven’t figured out yet. “
At Coursera, which provides online learning tools for employers and employees, the remote option exists for all employees. Instead of relying solely on a pool of workers within an hour or so of the company’s headquarters in Silicon Valley, Maggioncalda says it can attract workers from across the country.
“There is an imbalance and if we don’t give workers flexibility, other companies will,” he says. “Employees, especially the most talented, will set the rules.”