Macroeconomics tries to give light to all the happenings in the economy such as inflation, GDP and rates of unemployment. In reference to employment rates, the latest New York Times journal by Cohen (2018), on “as hiring slows, employers says it is getting harder to find workers” explains the current slow growth in the employment sector. Basically, for employment rates to be favorable in an economy, there ought to be a balance between labor supply and labor demand. The following sections analysis the journal to determine the factors that has led to reduced hiring rates and shortages of labor.
The Friday`s monthly jobs report from the government indicated that the unemployment rate in November held steady at 3.7 percent, which was the lowest in nearly half a century (Cohen, 2018). The employer’s greatest challenge in this situation was finding people who were willing to work. Also, according to David Donabedian the CEO of private wealth management, the country`s job market was good, just that the job creation segment was slow.
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The shortage in labor was a boom for workers who had been affected mostly by the recession including: The low wage earners, African Americans, Latinos and Americans with only high school degree. At this point, they were able to get jobs in manufacturing and such strongest job creating sectors. The main problem that the employers quoted in hiring employees was that when the field of available workers was scrutinized, there was scarcity of workers with sufficient skills for the jobs.
The increasing shortage of labor at some parts such as the Western led to temporary agencies being created that employed inmates from nearby correction facility as part of work release program. More interestingly, some of the inmates are hired while they are still in the centers. Moreover, some companies started working with local high schools that taught students on building trade hoping that they would want to work in their firms when they graduated.
Evaluating the workers thoughts showed that the sluggish wage growth and nipped opportunities for advancement were some of the factors that led to labor shortage. According to Brian Kropp, the vice president of human resource at Gartner, the employee’s promotion was very rare in present days (Cohen, 2018). For instance, it took four and a half years in recent days to get promotion as compared to an average of two and half years in 2006 (Cohen, 2018). For that reason, there had been growing dissatisfaction and resentment for employees who felt that they were not rewarded for their effort and were, hence, not willing to work.
Another thing that threatened the employment rates is the high interest rates and tariffs put in place by President Trump (Cohen, 2018). Ideally, these rates raised the cost of materials and thus increasing the cost of production. Essentially, hiring in organizations can only raise when the productivity increases and, therefore, the accelerating costs were likely to reduce hiring process especially in building industries where most of the work is personnel dominated. The manufacturing sector, on the other hand, is more vulnerable to increased tariffs, and if this issue is not taken care of then cases of work force trimming will be unavoidable.
The issue of whether the tightening job market can bring discouraged workers back to back is still a debatable subject. The level of adult workforce remains low and especially in November where it was under 63 percent (Cohen, 2018). The measure of demotivated personnel who were willing to search for jobs, and those who were only willing to work under full time jobs clocked at 7.6% (Cohen, 2018). Evidently, the aspect of unemployment in US is a matter fueled by slow growth of wages and promotion opportunities, increasing interest rates and tariffs which need to be looked into lest the country experiences major economic slowdowns.
Reference
Cohen.P. (2018) As Hiring Slows, Employers say it’s getting harder to find Workers. The New York Times. Retrieved from https://www.nytimes.com/2018/12/07/business/economy/hiring-slowdown-job-market.html
