The tight labor market has been a hot topic for many years now, and for good reason. With unemployment rates at historic lows and the demand for skilled workers outpacing the supply, it’s no wonder that businesses are struggling to find the talent they need to grow and succeed.
In this article, we’ll take a closer look at 9 key figures that provide a snapshot of the current state of the labor market and what it means for businesses and job seekers alike.
1. Unemployment Rates at Historic Lows
One of the most notable trends in the current labor market is the lowest unemployment rate since 1969. According to the Bureau of Labor Statistics, the unemployment rate in the United States was at a record low of 3.4% in January 2023. This is down from a peak of 14.8% during the height of the pandemic in April 2020.
2. Job Openings Outpace Job Seekers
With unemployment rates at historic lows, it’s not surprising that job openings are outpacing the number of job seekers. According to the Bureau of Labor Statistics, there were 11 million job openings in December 2022, compared to just 5.7 million unemployed individuals. This means that there are more job openings available than there are people to fill them.
3. Skilled Workers in High Demand
In this tight labor market, skilled workers are in high demand. This includes fields such as technology, healthcare, and finance. Companies are struggling to find the talent they need to meet the growing demand for their products and services.
4. Long-Term Unemployment Remains a Concern
While the overall unemployment rate may be low, there are still millions of individuals who have been out of work for an extended period of time. In December 2021, the number of long-term unemployed individuals was 1.1 million, which is down from a peak of 5.6 million in April 2010.
5. Wages on the Rise
With the demand for skilled workers outpacing the supply, companies are having to offer higher wages to attract the talent they need. According to the Bureau of Labor Statistics, average hourly earnings for all employees on private nonfarm payrolls increased by 4,4% from January 2022 to January 2023.
6. Remote Work on the Rise
The pandemic has accelerated the trend towards remote work, and this is having a significant impact on the labor market. According to a recent survey by the National Bureau of Economic Research, 42% of employed individuals worked from home at least some of the time during the pandemic. This trend is expected to continue, even after the pandemic subsides.
7. The Gig Economy is Growing
The gig economy, or the trend towards freelance and contract work, is also having a significant impact on the labor market. According to a report by the Freelancers Union, 60 million Americans were freelancing in 2022, representing 33% of the workforce (up from 36% in 2021).
8. The Importance of Upskilling
In this tight labor market, it’s more important than ever for individuals to upskill and stay current with the latest technologies and trends. Companies are looking for workers with the skills they need to meet the growing demand for their products and services.
9. The Impact of Automation
Automation is also having a significant impact on the labor market. According to a report by the World Economic Forum, up to 85 million jobs could be displaced by automation by 2025. At the same time, the report estimates that 97 million new jobs could be created by the same technologies.