MOLINE, Ill. — Monday, May 9 on Good Morning Quad Cities, Financial Advisor Mark Grywacheski with Quad Cities Investment Group discussed the U.S. Department of Labor's April employment report, which showed the labor shortage intensifying despite steady job growth, News 8's Linda Swinford.
Find the full conversation below.
Swinford: After going through April’s employment report, what are your overall thoughts on the labor market?
Grywacheski: The labor market is far from perfect, but it is one of those components of the economy that continues to hold up fairly well. We continue to see steady job growth.
In April, the economy added 428,000 new jobs, above the 400,000 that Wall Street had forecast. We’ve seen a gradual decline in the national unemployment rate. Last month, the national unemployment rate held firm at 3.6%. That said, there are a number of issues facing the labor market that Wall Street has significant concerns about.
But what about the ongoing labor shortage? How does this tie into the state of the labor market?
One of the biggest challenges is getting people to return to work from this pandemic. Back in March/April 2020, the labor market lost 22 million jobs. But here we are, exactly two years later, and we’ve yet to recapture 1.2 million of those lost jobs.
There are currently a record 11.6 million unfilled job openings across the nation. This is 65% higher than it was before the pandemic in February 2020. This translates to 1.9 available jobs for every unemployed person in the country.
Then look at the labor participation rate, which reports the percentage of Americans that are either working or actively looking for work. The labor participation rate is still at a 45-year low. This means that millions of Americans that were once working are no longer working and, more importantly, are not even looking for work.
Last Tuesday, the Department of Labor reported an all-time high of 4.5 million workers quitting their jobs in March. Why are we seeing so many workers quitting their jobs?
In what’s now being called the Great Resignation, the number of workers who are quitting their job has skyrocketed over the past year. And it all ties into this 45-year low labor participation rate. Because employers are struggling to find qualified workers, they’re forced to offer these incentives or bonuses to attract workers. But what employers are seeing is that workers are often jumping from one company to the next to capture these incentives/bonuses.
And these higher labor costs are passed onto the consumer in the form of higher retail prices which further adds to inflation. But even for the worker, these higher wages are still not keeping up with inflation and rising consumer prices.
Watch "Your Money with Mark" segments Mondays during the 5 a.m. hour of Good Morning Quad Cities.