It’s a tale of two job markets.
What do you mean?
Unemployment is relatively high. But it also seems like everyone's hiring. In November, 6.9 million Americans were unemployed. And at the end of October (the most recent data available), there were about 11 million jobs open.
Okay, what's going on here?
A mismatch. Usually, relatively high unemployment = big hiring pool. Aka advantage, employers. But they're struggling to find a good fit. Some hiring managers say candidates lack the skills they're looking for. One study found there were shortages of workers in industries like food services, trade, and education.
More job openings than people to fill them gives workers leverage. That's part of why 4.2 million Americans quit their jobs in October (hey, Great Resignation). And women are leading the way. More than 2 million have left the workforce this year alone. Thousands of workers have hit the picket lines recently with their labor unions for similar reasons. Think: to demand better wages, benefits, and quality of life.
Oh, and there's still a pandemic going on. That’s keeping some would-be workers at home due to safety and/or child care concerns. Some say the enhanced unemployment benefits included in the stimulus packages have encouraged workers to wait it out vs. rejoining the workforce ASAP. But that program ended in September. And some states opted out of the extra financial help early to try and push people back to work sooner.
So who's gonna give?
Lately, employers. Companies including McDonald’s, Under Armour, Walmart and even the gov have been raising wages, sweetening benefits, and loosening requirements to attract applicants. And job alerts are popping up across industries (like construction, manufacturing, e-commerce, and health care) and all over the country.
Hmm...maybe I should quit?
If you’re ready. As in, you have all your financials set up for a career change. Think: plenty of savings and a plan for health care coverage. If that sounds like you and you're ready to hunt for a new and better job match, here are some things to keep in mind:
Location matters. The transition to remote work let many employees relocate, shifting demand for where the jobs are. Whether you can stay remote with a new company (if you want) depends on your industry and position. Tackle this issue early on in the hiring process.
Know what you want. That includes specifics like desired salary, benefits, and other perks (like a flexible schedule, maybe). If you get multiple job offers, keeping some must-haves in mind can help you decide. Also consider the big picture: if you're interested in switching industries, think about how your skills could transfer.
Ask good questions. The hiring process is a two-way street. Learn as much as you can about a potential employer before sitting down for an interview so you can ask Qs, too. (Like about their reopening plans.) Remember: it should be a conversation, not an interrogation.
What does all of this mean for the economy?
Some of these job market trends can be a good sign. Until they’re not. On the upside, giving workers more money means they have more to spend as consumers. Read: good for the economy. But some say higher pay could contribute to inflation if companies pass added payroll costs to customers, who might then demand higher wages. And the circle of "wage push inflation" continues. It could also squeeze investors if profit margins are tighter.
To find the labor market's sweet spot, the supply of jobs needs to get in sync with the supply of workers. But if, when, and how that will happen is TBD.
The job market is in "mismatch" territory. Because the roles available aren't exactly lining up with the people looking to fill them. That's left some employers scrambling to attract applicants, giving workers the upper hand. But if the labor market can't find its sweet spot soon, it could jeopardize the economic recovery.
Updated Dec. 20 to include most recent jobs reports.