What These Overlooked Economic Indicators Say About Work And The Labor Market
ARI SHAPIRO, HOST:
The Labor Department comes out with the latest jobs report tomorrow, and economists expect to see more new jobs being created at a healthy pace. But there aren't just more jobs. Cardiff Garcia of our Planet Money team says people are also changing jobs more often, and he's here to tell us more about this. Hi, Cardiff.
CARDIFF GARCIA, BYLINE: Hey, Ari.
SHAPIRO: What shows you that people are changing jobs, moving around more?
GARCIA: Well, my favorite indicator of dynamism is probably the quits rate. That's just the share of people who quit, who voluntarily leave their jobs each month. It's now at its highest point in 17 years. So it shows you that people are confident letting go of their place of work and looking for something else.
SHAPIRO: So you're saying that when people quit their jobs at a high rate, that's actually a good sign economically.
GARCIA: (Laughter) Yeah. I mean, individually, usually we associate quitting your job with, like, being fed up. You know, you've had it. But actually, if you look at it from the standpoint of the macro economy, it's a great sign when a lot of people are quitting because it suggests that they know that they have better options elsewhere. They're leaving for a better job, or they're confident that they'll be able to find a better job when they do quit.
SHAPIRO: And when you look at the economy as a whole, how much more opportunity for work is there?
GARCIA: Actually a lot more. In fact there are now more job openings than there are unemployed people. This is the first year that that's been the case since the government started tracking these records back in the year 2000. And that doesn't mean that everyone who wants work will just slide into those open jobs. The jobs might be in different parts of the country from where the unemployed people are. They might not be a perfect match in terms of the skill sets that are required versus the skills that people have. But it does tell you that there is a lot of work out there if you're looking for it.
SHAPIRO: And is that across the board, or in certain sectors, are there more job openings than others?
GARCIA: No, no, it's consistent geographically across the U.S., and it's also consistent across the entire U.S. economy. But there are some sectors that are more impressive than others. And if you look at the health care sector, food and accommodations, restaurants, hotels - and then there's this category called professional and business services. Those are, like, high-end services, things like design, accounting, law, advertising. In all of those sectors, you really see a lot of job opportunities.
SHAPIRO: If employers have to compete so much for talent, why aren't wages going up faster than they are?
GARCIA: You know, this has been puzzling economists for quite some time. But what could be the case is that there are more people than economists realize who are willing to take work in part because a lot of the people who are taking jobs now said that they weren't even looking for jobs in the month before they actually took them. And so what it suggests is that actually there are more people willing to take work. And so companies are having to look for workers, yeah. But there are also more workers available to be found.
SHAPIRO: What does all of this mean for the economy as a whole?
GARCIA: You know, when the economy is more dynamic, it tends to give people more bargaining power. So wage growth has been kind of sluggish in the last few years, very disappointing. It could be about to get better. It also makes the economy a bit more efficient, more productive because if people are finding jobs that are a good match for their skill set, it makes them better at their jobs. And it also means that companies will be more likely to invest in the kinds of tools and equipment that will make them more efficient. So it's good all the way around both for the workers and for the economy.
SHAPIRO: That's Cardiff Garcia, co-host of our economic podcast The Indicator for Planet Money. Thanks a lot.
GARCIA: Pleasure, Ari. Thanks.
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