Employers Are Hiring – Job Seekers Aren’t as Ready to Return (Part 2)

There have been some interesting follow on articles about the jobs report Friday, which is being seen as a) great news; b) very disappointing; or c) a relief after April’s disappointing hiring. Which one you choose depends largely upon which political party you are fervently backing and which partisan media you are following. (If the last sentence does not describe you, chances are you would choose option C.)

My take on Friday was that our economic situation has been created by an almost unprecedented non-economic disruption that will require more than a few months to re-balance. One thing I thought was clear from Friday’s report on hiring in May was that the workforce was not ready to return to pre-pandemic work. Since Friday morning two things I read offer more color to the employment situation. One is local. The Pennsylvania Economy League of Greater Pittsburgh issued its Regional Consumer Confidence Trend Analysis for June. the report covers a wide range of consumer issues but has some insight into the employment trends. Among the employment data was that 14% of respondents said they were not working and not looking for a job. If that’s even remotely representative of the national sentiment, it means that workers will be hard to find this summer and the June jobs report (and likely July’s and August’s) won’t be showing that the economy is on a million-jobs-per-month tear either. Among those 14% not looking, 29% said that the lack of child care was the reason. That suggests that the situation won’t improve dramatically until school returns. Only 3% said they reluctance to look for work was due to higher unemployment benefits. That’s not necessarily surprising (or accurate) either. There are disincentives from reporting that government benefits are why you aren’t working.

The interesting response from that group was the 16% who said they were taking time off to reassess their careers. This group would identify with a New York TimesĀ editorial piece by economist Betsey Stevenson that suggested that the lag between employers and job seekers was wider because the pandemic caused more workers to take stock of their way of living and working that previous recessions. Stevenson cited a Pew Foundation study in January that found that while 51% of Americans were optimistic about their employment outlook, 66% had seriously considered or actively sought to change jobs. ThatĀ Pew study found less optimism from people about finding a job that paid as well as their previous job, which squares with the idea that workers would be considering changing jobs rather than going back to what was before. That’s resonates even more when you consider that unemployment is twice as high among low wage earners than the rest of the workforce.

The Times article touched on a number of other factors keeping workforce participation lower than would be expected in a robust recovery of GDP like we are currently experiencing. Among them are continued health concerns about COVID-19 spread at work, an existing desire to change careers that a layoff accelerated, and an increased desire to work from home that is impacting the actions of people who are currently employed. The bottom line conclusion (which is backed up by JOLTS data) is that there is a reallocation of people and jobs underway that will take months to sort out. The author compared the situation to the singles scene, noting that it takes more than one date to find the right match.

If these survey results are indicative of the prevailing workforce sentiments, employers are likely to be looking for workers longer and making unexpected changes to wages and workplace conditions. In other words, don’t expect the jobs reports to be upwards rockets of employment growth until the weather cools.

One project news update: RIDC selected PJ Dick as construction manager for the third 100,000 square foot infill building at Mill 19 in Hazelwood.

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