This article talks about how the U.S. labor market is showing some improvements since the recession in 2008. One sign of improvement mentioned was the unemployment rate for July. The rate was measured at 4.9% which is less than half of the 10% rate for 2009. Another sign mentioned was that more workers who lose a job are able to find a new one. According to the article 7.4 million people lost their jobs between January 2013 and December 2015. 3.2 million of those people were laid off from jobs that they had held for at least three years. However, among those long-tenured workers that were laid off over the past three years, it was reported that about 66% ended up re-employed as of January 2016. This is a fairly significant increase when compared to the 49% in 2010 of long-tenured workers that were re-employed after being laid off during the recession years of 2007-2009. Although the re-employment rate has not quite reached the 70% that was displayed in 2003-2005, the labor market is slowing showing improvements and starting to return to normal, seven years after the recession. However, it would be interesting to see how many people of the 66% had to settle for a lower income compared to what they were getting paid before they were laid off.
Here's the link: http://blogs.wsj.com/economics/2016/08/25/laid-off-american-workers-are-having-better-luck-finding-new-jobs/
I agree that the 4.9% unemployment rate and the 66% reemployment rate are very encouraging. It is interesting to note, however, that according to the August report there are approximately 6.1 million workers who are involuntarily part time (counted as employed, would like to work full time but only have part time employment) along with ~2.3 million marginally attached and discouraged workers, who are not counted as unemployed. So while 4.9% is definitely good (and it is!), it doesn't necessarily tell the whole story, much like your question at the end about pay cuts, which would not be included in these statistics.
ReplyDeleteThe 66% re-employment rate is a pretty good sign, but it probably cannot increase much further. The article also states that another 16% remain unemployed and 19% left the labor force. So this re-employment rate can only increase at the max, 16% which if it did, unemployment would be at 0% which may do more bad than good for the economy. My question is why did these people leave the labor force? Did they give up on the job search, retire, become a student, or what? However it is still incredible that in such a short amount of time, the economy has returned to nearly full employment.
ReplyDeleteThese numbers are quite impressive, but I agree that they couldn't get much better. I was reading the article linked and found it to be quite interesting that the percent of people not in the labor force has stayed about the same (17%-19%) for the past 16 years, according to the graph.
ReplyDeleteI do agree that the unemployment reaches 0% may do more bad than good to the economy. On the surface the low employment rate might be a good thing for the citizens of a country, but overall 100% employment is practical. Also on Philips curve, it states that there is an inverse relationship between unemployment and inflation, if we focus on decreasing the unemployment rate, the inflation rate will increase.
ReplyDeleteI agree that it is incredible that 66% of people who were laid off were now re-employed as of January. However, I believe you make a good point about digging deeper to find out how many of those people now work part-time or settled for a lower wage. This rate looks great but there is more to be discovered. Also, I am curious if the re-employment rate can reach 70% like it did in 2003-2005. I wonder what exactly it would take to increase the rate even further since 16% of people were unemployed and 19% had left the workforce. The labor market is slowly but surely showing some signs of improvement.
ReplyDeleteThis article is really interesting since it shows a major positive sign in the economy of rising employment after the Economic recession 2008. Laid off and unemployed who were in the labor force and still looking for jobs are re-employed, as statistics show (from 10% to 4.9%). The re-employment rate has risen from 48% in 2009 to 65% in 2016, thereby showing that the economy has risen to full employment level of output.
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