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).
The Takeaway:
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.
MORE: Jobs Take Center Stage at Milken Institute Global Conference
Panelists cited specific solutions they were involved in to address the skills gap issue in our country and help connect people with jobs. Solutions ranged from connecting employers with the educators who provide potential employees the training they need to community colleges working with military members before they leave their service to get them skilled in today’s jobs.
As of late, lawmakers and those who have the president’s ear appear to be taking notice that these kinds of solutions — apprenticeships, training programs and public-private partnerships — are becoming necessary to tackle the employment gap in our country.
MORE: Lawmakers bring in panelists to discuss changes that can be made to strengthen Career Technical Education (CTE) to help close the skills gap
Just this week, Andrew N. Liveris, the chief executive of Dow Chemical, who was selected to lead President Trump’s Manufacturing Jobs Initiative, told the Economic Club of New York “that the single-minded message that everyone needs a four-year university degree is a mistake. Arguing that a strong and sustainable economy cannot be built solely on tech whizzes, he pushed for more apprenticeships, training and partnerships between community colleges and private industry that would produce people skilled in the trades,” as reported by the Times.
Whether or not we will begin to see any policies as a result of this remains to be seen, but at President Trump’s recent Buy American, Hire American press event at Snap-on tool’s Wisconsin headquarters he made a promise to bring back vocational training and that it would be a big part of his administration.
Further Analysis:
WorkingNation reached out to Roberts T. Jones, President and Founder of Education Workforce Policy, LLC, and co-author of the book, The Jobs Revolution: Changing How America Works, to offer his thoughts on today’s job report. Here’s what he had to say:
“While the month to month unemployment rate was little changed at 4.4%, it did reflect increased job growth and increased employment in specific sectors of the labor force. Over the course of the year, the data reflects significant decreases in the number of long-term unemployed, the number of part timers looking for full time work, and the unemployment rate for those with less than a high school degree. Further, the employment to population ratio continued to improve, suggesting a continued increase in the number of discouraged workers returning to the labor force.
“Meanwhile, the vast majority of job growth continues to take place in higher skilled occupations. While increases in Leisure and Hospitality reflect the ‘summer bump’ and benefited those with a high school degree or less, the premium on higher skill continues to grow. As the year progresses, the data will likely reflect a growing earnings and employment gap between those with postsecondary education and those high school or less.
“Further evidence of the increasing demand for skills/education will appear next week when BLS releases the monthly report on Unfilled Jobs. Over the year, these numbers have averaged around 5.8 million Unfilled Jobs each month and the vast majority of those continue to be higher skilled occupations.
“In sum, the April unemployment data reflects a positive labor market with increased opportunity for long-term unemployed, discouraged workers, and those out of the labor force hoping to return. However, the underlying data also suggest the growing skill/education premium.”
