Job markets are soft

Workforce,  Jan, 2003  by Fay Hansen

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HR executives looking for health-care workers or local schoolteachers might swear that labor markets are still unbearably tight, but in almost all other industries, there is little or no job growth anywhere in the country. Employment has been falling fast since September.

Nationwide, 8.5 million workers are unemployed and actively looking for work, but there are only 3.9 million job openings, according to the most recent data from the Bureau of Labor Statistics. An additional 1.4 million unemployed want work but hadn't looked for jobs in the four weeks preceding the data collection; 4.2 million more are working part-time because they can't find full-time jobs.

The official unemployment rate of 6 percent for November--the highest in eight years--reaches a far more ominous 9.4 percent when these additional unemployed and underemployed workers are added to the count. Soft labor markets ease wage demands, but they also undermine consumer spending and ultimately cut into the bottom line.

Downward pressure on wages and lower head counts have helped companies cut costs, but unemployment rates are quickly reaching levels that preclude economic recovery in the worst-hit regions. New York, Miami, and San Diego are all approaching official unemployment rates near 8 percent.

In this environment, few employees are voluntarily quitting their jobs. The quit rate, or the number of quits as a percentage of all employees, dropped to 2.2 percent at the end of 2002, down from 2.5 percent a year earlier.

COPYRIGHT 2003 Crain Communications, Inc.
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