Job Security and The Labor Market
According to the Wall Street Journal, the odds of getting laid off are at a historic low in the tightest labor market in 50 years. Economists are saying that jobless claims are at their lowest levels since 1968, but job security is even better.
Behind the extremely tight labor market is a transformed U.S. economy. One factor, which contributes greatly to these numbers, is that the labor force is much bigger, including more women and more jobs in the service sector. The total number of people either working or looking for work is now 164 million, more than twice what it was in 1968.
In March 2022, there were about 1.1 jobless claims per 1,000 people in the labor force—roughly, half the 2.3 jobless claims per 1,000 recorded in 1968, according to an analysis of Labor Department data. Wages have also shown an increase (adjusted for inflation) when compared against that time period.
Part of the issue when looking at the recent context is that employers have been scrambling to fill open positions on their payroll after covid emptied out offices and workplaces in 2020. And when the business opened up again, many of the vacated jobs were not refilled.
This gave rise to the Great Resignation (a term that was coined last year after a rising trend was observed of employees leaving jobs or changing jobs). An alarming number of employees, especially Millennials, were seen to walk away from their employers.
The reasons for this are fairly simple. The global pandemic accelerated a shift to online work and many folks took a long look at their finances and lifestyles and made decisions accordingly. 54 percent of workers surveyed by ZipRecruiter said they preferred a job that let them work from home.
Employers struggled with a worker shortage despite the record of job openings and the lack of workers and consistent turnover would certainly be enough to make companies try to hold on to their employees and give as much job security as possible. The current labor market has allowed millions of workers to find better pay with improved work-life balance, which can lead to healthier and happier employees — and thus better employee retention.
One other factor to consider is inflation. Last year, the inflation rate shot up to 6.8 percent. Wages, on the other hand, have seen a 5 percent increase. And with inflation outpacing wage increases, what you end up with is a deficit in actual earnings versus cost of living.
So employees have been faced with a bit of a quandary. If they were to quit their current job, instead of making their case for a raise, the inflation rate may counter-balance their hopes for a higher paying job somewhere else, making the decision to stay in a position slightly more attractive an option.
The upshot of all of this is that employers have been forced to have a good look in the mirror and make much-needed changes to their company culture. Many workers have been so sick and tired of being treated poorly by toxic bosses and bad corporate culture, and now that employees are being seen as a highly valued asset to a business, organizations are focusing on improvements that will accommodate their staff’s needs — making job security not only more common but a better working environment for the labor market as well.
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