January 6th, 2012
Econintersect: The Conference Board's director of macroeconomic research, Gad Levanon, has 2012 forecasts relative to the labor market in the USA. In a nutshell, he sees yin and yang - low layoffs and low hiring.
This all works together to create an aging workforce and downward forces on wages for unskilled and entry level jobs.
- Disappointing employment growth
- Mostly in the structurally impaired industries: construction, finance, and state and local government.
- Meanwhile, the rest of the workforce is growing at rates typical of periods of expansion.
- Weak job creation but very low layoff rate.
- Gradual decline in a still very high (8.6%)unemployment rate
- Part of the decline is a continuing increase in the percent of people who want a job but stopped looking for one (and are therefore not counted as unemployed.)
- Much of the decline in the unemployment rate in the past year is in production, engineering and computer related occupations.
- The overall high unemployment rate is likely to remain high for quite a while.
- Long term unemployment at historical highs.
- Tight labor markets are beginning to develop in the resource rich heartland.
- Lowest wage and salary growth in decades
- Employers manage to keep slow growth rates in wages partly due to relatively low pay to new hires from both colleges and unemployment.
- Benefits costs are rising. Not only healthcare, but also reinstituting other benefits that were cut during the recession.
- The workforce is getting older fast
- Part of it is the large baby boom cohorts getting older.
- Part of it is workers delaying retirement.
- Low labor turnover rate.
- Relatively low labor productivity growth in the past 6 quarters. What is the new trend in labor productivity?
- The higher unemployment in low paying occupations is leading to slower wage growth in these occupations and to rising wage inequality.
source: The Conference Board