For the first time in roughly fifty years, there are more job openings than unemployed people in the market.
Relative to the Job Openings and Labor Turnover Survey, job openings level was little changed but reached a new series high of 6.7 million. With 6.3 million unemployed people, the labor market is in better shape now than ever. That means there is 0.95 unemployed people for every job opening. The recovery from decades ago might’ve been slow but the recovery has certainly coma long way from the dark days of 2010 when there were over 6.6 unemployed people for every job opening.
However even with the unemployment rate, wages are still staying at a stagnant rate because people aren’t getting any higher raises. Those are stuck at the same 2.7 percent that they have been for the past two years, even though unemployment has fallen from 5 to 3.8 percent during that time.
The question is why? Why has wage rate not made any progress whereas unemployment rate drastically has? Referring to The Washington Post, many places have a few big employers that, by being the only job in town, offer any amount of wage to employees. It’s like the reverse of monopoly power —they’re only buyers rather than sellers of wages — but the effect is the same. Even if workers are free to quit their jobs, they might not be able to find a better-paying option. Another reason is that, companies might not want to raise wages now because if US enters another crisis or inflation in the future, companies will be extremely reluctant to increase pay.
Whatever the case may be, the story has become familiar now. The labor market today widely benefits people who are looking for a job, but not for people who want higher pay.