Labor Day this year is a significant economic signpost. Every year it has been a traditional divider between summer vacations and everyone back at school and back to work. 2021 is even more significant as it marks the expiration of pandemic unemployment payments. The eviction moratorium got extended, maybe?, to October 3, 2021 but suffice it to say there are lots of changes going on after Labor Day.
There are still 9.5 million unemployed people and 9.2 million jobs available. There is some thought that the additional pandemic unemployment payments have been keeping people from taking a job. There may be some truth to this, but the stronger reasons for being able to work or not have been not having child care, worker’s individual health and safety concerns and the availability of work in the location and at the level the worker desires.
Many jobs won’t be returning from the pandemic including hotel desk check-in workers, valets, toll booth collectors and administrative support staff. Temporary office help declined by 115,000 workers in April 2021. Researchers predict that 70% of people coming off unemployment benefits are going to new employers. Hospitality is particularly struggling for workers to return. The average hourly rate in hospitality is $18/hour while warehouse work pays $26/hour on average.
The unemployment rate at the end of 2021 is predicted to be 4.5%, end of 2022 3.8% and end of 2023 down to 3.5%. Three percent is considered full employment. In addition to the disruption caused by the pandemic and the skills gap this has highlighted and accelerated as an issue there are just not enough people with the right skills to fill all the open jobs. For the last 50 years the birth rate in the U.S. has been declining and for the last 20 years it has been below replacement level. Baby boomer retirement has been accelerating and Generation X has been retiring in their mid to late fifties versus 65+. Millennials and Generation Z are working less than the previous generations. They prefer to be entrepreneurs, do gig work or part-time work or don’t work at all. The participation rate or EMPLOYMENT rate is 62%, and the economy isn’t just growing, it’s booming! The need for the right employees in the right jobs is almost as hot as the residential real estate market. If you’ve considered changing jobs, after Labor Day is the right time to take a look at your options.