For the first time in the history of the United States there are more jobs available than there are people looking for work. The U.S. Bureau of Labor Statistics report for May shows that in April of this year there were 6.7 million jobs available and only 6.4 million people listed as unemployed. This is the second month in a row that this historic phenomenon has occurred, and it’s getting wider as April’s gap was 65,000 wider than in March.
The problem is even worse than it looks. Most markets are considered “fully employed” at around 5% unemployment. “Fully Employed” does not mean that everyone has a job. It is, rather, an estimate of the lowest unemployment can go before it will start to cause inflation. As unemployment gets under 5%, so the theory goes, candidates get scarce and employers will begin to compete for the available workers by increasing wages faster than anticipated. Raising wages too quickly will bring about inflation because more money in the hands of consumers creates a greater demand for products. Greater demand causes supplies to fall short, creating price increases to raise supply levels up to meet the new demand.
So, if the country is fully employed at an unemployment rate of 5%, and we are at 3.6% right now, does that mean we are about to experience serious inflation?
Jobs, Wages and Inflation
Experts expected inflation to kick in by now. So why hasn’t it happened yet? Because wages have not increased as expected. With the number of job seekers so low, and the number of jobs so high, the anticipation was that employers would get into a wage war, increasing their offers to lure candidates away from their current employers. The BLS reports, however, that hourly wages only ticked up by one tenth of a point in April. As a result, having more jobs than workers has not caused much of a change because employers are not offering enough money to convince people to change jobs.
According to the BLS, unemployment is down in 350 of the 388 metropolitan markets they measure. Ninety-six of those markets (including Austin) have a jobless rate of less than 3%. The question remains: How long before employers start to offer higher wages to steal workers from their competition? How much of the pain can they endure?
One of the reasons employers have been so reluctant to start a wage war is basic economics. Sudden pay increases lead to inflation. If there is more money in the hands of consumers, consumers demand more product to purchase. Employers then have to create even more jobs to meet the new demands. This causes wages to go higher. Demand then escalates more and jobs have to added again. You see the slippery slope? Things just keep getting worse. So companies are trying to toe the line as long as they possibly can.
Help for Job Seekers
You may ask: How can job seekers take advantage of the current situation to get a better job? Craig Foster is the executive director of Job Seekers Network, a Christian based non-profit that helps people find better jobs. The Job Seekers Network was founded in 2009, when unemployment was at an all-time high in Austin. They help not only with tangible skills like resume writing and networking, but also emotional and spiritual support as well.
Job Seekers Network mission statement:
Job Seekers Network is dedicated to providing comprehensive job search programs and services and emotional and spiritual support to unemployed and underemployed adults in Greater Austin to support, equip, and enable them to find a better fitting job faster.
A big part of what Job Seekers Network offers is one-on-one consulting with each job seeker. This helps them gain clarity on what’s next in their career. According to Foster, 50% of job seekers who come to them are unclear about their next career step.
For those job seekers the organization offers a Design & Focus Workshop that helps them not only determine what they want to do, but what God’s purpose may be for them. What skills and talents has God blessed them with? How can they direct those talents into training for jobs that are a better fit for them, both professionally and spiritually?
There is a dearth of workers with the right skills for the available jobs. This is another reason wages are not increasing. Equipping candidates with the right skills will help close the gap. Employers are more willing than ever to train people into their jobs, you just need a great attitude and a willingness to work hard.
Whether you are unemployed right now, or simply want to get a better job, there has never been a better time in the history of the United States to improve your employment situation. Jobs are everywhere and, with a little training and extra work, just about anyone can find a better one.