Labor Markets Expanding to Meet Employment Demand
June 25, 1997
Economists say that U.S. labor markets are functioning just as they are supposed to. Low unemployment is creating a demand for more workers, and the workforce is expanding to meet that demand.
Two groups in particular are showing much increased labor force participation: men between the ages of 55 and 64, and women 20-to-24 years old. The first is made up of men who are coming back out of early retirement, while the women are often coming off of welfare -- thanks to state efforts to scale back benefits and reforms passed at the federal level last year.
- The labor force -- which includes both employed and unemployed workers -- grew by some 2.7 million last year, a 2 percent increase.
- Excluding the nation's two largest metropolitan areas -- New York and Los Angeles -- May's 4.8 percent unemployment rate would have been 4.5 percent.
- Economists say that as jobless rates decline to lower and lower levels, new entrants into the labor force -- including discouraged former job-seekers -- pick up dramatically.
- A Merrill Lynch economist predicts that the labor force will continue to grow at a 1.5 percent annual rate, even though the population is growing at only 1 percent a year.
Companies are benefiting by the trend because older workers usually require less training and their experience tends to make them more productive than their younger colleagues.
Source: Beth Belton, "Hot Economy Taps Deep Labor Pool," USA Today, June 25, 1997.
Browse more articles on Economic Issues