It’s a job hunter’s market these days.
Employers in the U.S. have 10.4 million job openings, a near record-high level, and the pool of unemployed workers looking for work hovers at 7.4 million people, according to Bureau of Labor Statistics data.
That has put employers in a bidding war against one another for new talent, where the “prize” goes to the employer willing to offer not only higher wages, but better working conditions and benefits.
Some job seekers have capitalized on the worker shortage, and are intentionally not applying to jobs that are traditionally low-wage and can be demanding — such as jobs in the foodservice sector, for instance.
But that narrative doesn’t explain why labor shortages continue to persist in the U.S., according to Jason Furman, former chairman of the Council of Economic Advisors under the Obama administration.
“A lot of jobs weren’t great in 2019 either. They were just better than the alternative which was not working,” Furman, a Harvard economics professor, said Wednesday during a discussion hosted by the Aspen Institute Economic Strategy Group, an offshoot of the non-partisan Aspen Institute think-tank.
“‘People have more cash.’”
— Jason Furman, former chairman of the Council of Economic Advisors under the Obama administration
Nowadays, not working is more attractive than it was before the pandemic “in part because people have more cash, and in part, because job openings are so high,” Furman said.
For the majority of the pandemic, Americans were stashing away money at record rates. The money they were saving, in many cases, came from stimulus checks and enhanced unemployment benefits which last through September.
Also, when much of the economy was locked down to curb the spread of COVID-19, Americans had limited opportunities to spend money.
“At the height of the pandemic, the U.S. personal saving rate was above 30%”
But since March 2021, Americans have been dipping into their savings.
In October, Americans’ personal saving rate, calculated as a percentage of disposable income, dipped to 7.3% from 8.2% in September, according to data from the Bureau of Economic Analysis.
That’s slightly below the pre-pandemic savings rate, 8.3%. To put those figures in context: At the height of the pandemic, the savings rate was above 30%.
The fact that more Americans are depleting their savings could be a good sign for employers, and bad news for workers holding out for better pay and conditions.
“By that point, they’re going to need to take jobs they may not like,” Karen Dynan, a Harvard University economist who served as chief economist at the Treasury Department during the Obama administration, told MarketWatch.