Depending where you get your information, it can be difficult to discern what the status of the U.S. workforce is. Is it healthy? Is it falling through the cracks? Where does the unemployment rate sit? Let’s find out.

Unemployment

The U.S. unemployment rate is currently at 4.4 percent, meaning the nation is almost at full employment for the market. This rate is sitting at pre-recession lows and has decreased since the start of the year. Looking at these numbers, one could say it’s a job seeker’s market. Such is the case in the state of Iowa where companies are looking for creative and enticing ways to encourage potential employees to apply. Companies are finding it more difficult to find qualified employees and to even retain their current employees. This makes the perfect condition for those looking to make a career switch and gives them greater bargaining power.

Job Growth

Job growth throughout the United States has seen a steady increase over the years, with 16 million added jobs since 2010 or almost 200,000 jobs a month. The U.S. Department of Labor also saw a decrease in unemployment benefits provided in June. The number of payouts has been less than 300,000 for over two years, a sign of a robust labor market.

Income

So where do pay and wage increases come into the state of the workforce? With the unemployment rate being as low as it is and it is a job seeker’s market, it can be advantageous to employees to negotiate their salary and benefits. The smaller pool of applicants can potentially lead to increased pay as a tool to retain and attract employees. On the other hand, the rate of inflation has not seen significant growth in a few years and this can potentially be harmful to increase pay raises and wages. So what’s preventing that raise your employees have asked for?

• E-commerce: As consumers shift their purchasing habits from in-store to online, many brick and mortars are struggling to keep doors open. All of the online shopping has driven down the price for goods which hinders an increase in revenue which in turn prevents increased wages.

• Low Productivity Growth: The productivity of the American worker has not seen any significant increase since 2011. With no extra output and with narrow profit margins, companies find it difficult to justify a raise for employees.

• Globalization: With the expansion of trade and as China becomes a larger player in the world, import prices have continued to fall. Along with expanded trade, China also offers lower wages which in turn has prevented many U.S. manufacturers to increase pay for employees.

So what does this all mean?

It means we’re seeing signs of a strong, rebounding economy from the Great Recession but there are still obstacles to overcome and plan for. Companies need to reevaluate how they plan to recruit, entice and retain employees. As Baby Boomers exit the workforce, companies will have to continually work to find replacements for skilled jobs. It means while the workforce is a job seeker’s market, raises and pay increases may be hard to come by with the double-edged sword of inflation. 

What are your thoughts on the state of the U.S. workforce and economy? What are some ways your company recruits prospective employees? Tell us in the comments below.