NCPA - National Center for Policy Analysis


July 31, 1997

Economists have been asking where the new workers are coming from to staff this low unemployment economy. As late as 1995, economists expected 1.2 percent growth in the labor force for 1996 -- but the rate was almost 2 percent -- equivalent to about 1 million unexpected workers.

They have also been baffled over the fact that the tight labor market hasn't been exerting its traditional upward pressure on wages.

Now some answers seem to be emerging.

  • Labor specialists say one source of workers is recent retirees who are weary of sitting at home, as well as mothers -- people who wouldn't be counted in the ranks of the unemployed, but will take jobs they find appealing.
  • As the number of students with college loans more than doubled during the 1990s, these heavily indebted students are taking part-time work to help reduce their loans -- with almost 5 million in the workforce.
  • After dropping sharply for years, the proportion of men 55 and over who are either working or looking for work stands at 68 percent -- most coming straight from their last job.
  • In the first quarter of this year, 63 percent of all American women with children under age six were working or looking for work -- up from 59 percent as recently as 1994.

Even while unemployment has been falling, the number of temporary workers has continued to rise. Temporaries totaled 2.34 million in the first quarter of this year, up 10 percent from a year earlier.

Source: Greg Jaffee, "Many Employers Find that Hiring is Easier than the Data Suggest," Wall Street Journal, July 31, 1997.


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