The unemployment rate in April hit a 10-year low dropping 0.1% from last month to 4.4%, thanks to the addition of 211,000 jobs, according to the latest report from the Bureau of Labor Statistics. While this milestone for unemployment is good, the number that offers deeper insight into the workforce — the labor participation rate (currently at 62.9%) — remained stagnant (down just 0.1% from last month).
In addition to the stagnant labor participation rate, the number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 1.6 million in April and accounted for 22.6 percent of the unemployed. This indicates that a skills gap issue and/or the inability for people seeking work to move to a place where jobs are available may be preventing those who would like to work from getting back into the labor market.
While jobs are being added, particularly in business and professional services (+39,000) and health care (+37,000), many employers continue to complain about having more positions open than they’ve been able to fill.
This leaves businesses with the task of deciding whether to pay more to get people with those skills or build them up. With wages only increasing by 2.5% over the past year, it seem more companies have been choosing the latter by partnering with educational institutions to develop skills so that new hires “can earn while they learn,” as observed by Michael Stull, a senior vice president at the staffing company Manpower North America.
How We Can Do Better:
The skills issue and the responsibility of businesses, educational institutions, non-profit organizations, and local governments to tackle this issue was discussed in depth at WorkingNation’s panel discussion at the Milken Institute Global Conference in Los Angeles Tuesday.