Bloomberg has a good piece up summarizing the state of the labor market in America. The quick summary:
“higher unemployment rates, longer unemployment spells, steep falls in the employment rate in the working-age population, a slower pace of worker flows, and a slower pace of job creation and destruction.”
One thing we’re seeing is a drop in mobility, people are switching jobs less. There’s a similar trend in the employment/population ratio: the number of people employed drops with each recession and never quite regains its pre-recession peak before the next downturn hits. We’re seeing this now with job-switching rates since the late ’90s. The rate of job switching drops with each recession and increases slowly but never gets back to its previous peak. Since much of earnings growth comes from switching jobs this could have troubling implications for earnings. If less switching means that people stay in jobs that they’re less suited-for then that means we’ll see less growth in the future. (This effect could be reduced somewhat, if there are gains from learning-by-doing and skill at a job increases over time.)
A troubling trend.