A hot US job market is coaxing people in from the side lines

- ASSOCIATED PRESS, WASHINGTON

Mar 9, 2019-

A surprisingly strong burst of job growth over the past year has led many economists to wonder: Where are all the workers coming from?

As recently as last spring, analysts had worried that hiring would slow as the pool of unemployed shrank. Many employers have complained for years that they could no longer find enough people to fill their open jobs.

Turns out they were both wrong.

The pace of hiring in 2018 was the most robust in three years, and for a surprising reason: Many more people have decided to look for work than experts had expected. The influx of those job seekers, if sustained, could help extend an economic expansion that is already the second-longest on record.

The growth in America’s workforce—made up of people either working or looking for work—has helped reverse an alarming consequence of the recession: The exit of millions of Americans from the job market.

For five years after the Great Recession ended in 2009, many Americans gave up on their job hunts. Some suffered from disabilities. Others enrolled in school or stayed home to raise children. Still others were stymied by criminal pasts or failed drug tests. Some just felt discouraged by their job prospects. Because they weren’t actively seeking work, they weren’t even counted as unemployed.

Economists had speculated that millions of these people lacked necessary qualifications or were otherwise deemed undesirable by employers and might not work again. They were thought to be, in economic parlance, “structurally” unemployed. Subsequent hiring wouldn’t necessarily help them.

Yet for the past few years it has. The proportion of Americans ages 25 to 54 who have a job has reached nearly 80 percent—the same as before the recession. Economists refer to this age group as “prime-age” workers. It excludes older Americans who have retired and younger workers who may be in school.

That it took nearly a decade for the proportion of prime-age Americans who have jobs to reach its pre-recession level shows just how ruinous the Great Recession was. It destroyed 8.7 million jobs. And the recovery that followed was comparatively sluggish.

Still, the unemployment fell steadily, from 10 percent to 4.1 percent at the start of 2018. With so few people unemployed, businesses have increasingly begun recruiting more widely, including among people who hadn’t been looking for work.

Other factors that have held some people back from seeking work have included the high cost of child care and a lack of paid leave. Research suggests that such costs have held back the workforce participation rate of prime-age US women, a rate that trails those in most other industrialised countries.

Child care costs delayed the return of Valarie Regas of Atlanta to the job market after she gave birth to her second child in 2012. Regas wanted to go back, but most of the jobs she found didn’t pay enough to cover child care. So she remained mostly out of the job market for five more years.

After completing a coding boot camp, Regas was hired last year by a division of the European aerospace giant Airbus. The company initially wanted someone with more experience, she said. But after she pitched them on her enthusiasm and willingness to learn, she was hired as a software programmer.

“Even with the exorbitant cost of child care, I am now bringing home real money,” said Regas, 36.

Many companies are relaxing their education or experience requirements, according to economists and staffing agencies. They are considering more applicants with disabilities. Businesses are expanding their training programmes. Some, analysts say, are also looking with a more open mind at people with criminal backgrounds.

Partly as a result, the number of people who either have a job or are looking for one grew 1.6 percent in 2018, sharply higher than the average annual gain of 0.4 percent in the first five years after the recession.

Published: 09-03-2019 09:50

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