An increasingly competitive labor market is driving wages up while forcing businesses to forgo new opportunities and limit growth due to a lack of new hires, The Washington Post reports.
Employers have ramped up wages, benefits, signing bonuses, and vacation packages. Some have put a new focus on apprenticeship programs while bringing on semi-retired workers to fill contracts. Other businesses have scaled back operations until they can find the manpower to meet demand.
“I’ve been in this business since 1984, and I’ve never seen what we’re dealing with in terms of hiring people,” Ron Sandlin, president of Florida based Patriot Transportation, told WaPo. “Driver pay is going to have to continue to go up, and our customers are going to have to pay for it.”
Unemployment remained at 4.1 percent last month, the lowest it has measured in nearly two decades. The Federal Reserve announced in December that long-run normal rate for unemployment should fall between. 4.3 and 5 percent. The current job market is at “full employment,” or an acceptable level of unemployment above zero percent.
The below normal unemployment rate has resulted in a dearth of skilled labor for positions in industries such as construction, where some companies have begun offering six-figure salaries to attract industry professionals.
While an unemployment rate below 4.3 percent is unsustainable over the long-term, American Enterprise Institute economist Michael Strain says the job market “still [has] some slack.”
“The unemployment rate can continue to fall without sparking a significant increase in inflation,” Strain told WaPo.
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