Welcome back to The Workweek, the Indeed Hiring Lab’s round-up of the latest research, news, and perspectives that made us think deeply or differently about the labor market this week. It’s your guide to the most important new insights about work.
Here are our picks for this week:
Yellen on the current state of the labor market
Federal Reserve Chairwoman Janet Yellen recently gave a great overall update on the current state of the labor the market at a Stanford Institute for Economic Policy event. The highlights? The US labor market has made a net gain of about 15.5 million jobs since the depths of the Great Recession, headline unemployment is near the rate which indicates the economy is at full employment, and perhaps most importantly, broader measures that include the underemployed, and many others, have almost returned to normal levels as well. All of these signs point to a labor market that is more or less functioning as it was before the financial crisis of 2007-08. (WSJ)
Wages going up — at last
On top of that good news, paychecks for the average worker are getting just a bit fatter according to the Atlanta Fed’s Wage Growth Tracker. In 2016 the typical wage increase for a US worker was about 3.5% — up from 3.1% in 2015. The climb in wages can be explained by the tightening labor market, as their measure of wages is highly correlated to the unemployment rate. Even more good news: based upon the Fed’s forecast that the labor market will remain stable, if not tighten further, the Atlanta Fed expects an uptick in wages for 2017 as well. (Atlanta Fed)
Turning our U’s back to V’s
The years after the Great Recession were often dubbed a jobless recovery. Most economic indicators bounced back rather quickly from the financial crisis, leaving crisp V-shaped charts on computer monitors across the country indicating a quick return to normal levels. However, the labor market had a dreadful U-shape, meaning that overall employment took several years to slowly revive itself. Noah Smith highlights some recent research that investigates why the US is the only developed country that has been experiencing this phenomena for three decades, discusses possible solutions, and raises one important question: is this strictly a bad thing? (Bloomberg)
What happened to all the women?
Since the 1960s, a growing number of men have been leaving the labor force for various reasons, including disability, the shrinking availability of manual labor jobs, and drug addiction — to name but a few. In a more recent trend, after peaking in 1999 the percentage of prime aged women in the labor force has failed to bounce back from considerable losses during the Great Recession. Perhaps most concerning: the US is one of few OECD countries to have experienced this trend. Patricia Cohen examines why so many women are leaving the labor force, and how their reasons differ from those of men. (NYT)
A tale of two boom and bust industries
The boom and bust cycles of oil and housing, two industries that typically compete for workers, have by chance typically been far enough out of sync to avoid stepping on each other’s toes in the labor market. However, there is a possibility this may soon change. Years of housing sector growth have tightened the construction labor market, and with oil prices stabilizing, this industry too may have a greater need for labor. Conor Sen details how these two vital industries compete for talent and the implications this could hold for our energy sector. (Bloomberg)