Today’s Job Market: A 2019 Roundup
The job market has experienced some turmoil due to several economic, environmental, and technologic reasons. Today’s job market is affected mostly by automation and various external factors, but it was most affected by the 2008 financial crisis which caused a massive surge in the unemployment rate.
Since then, several measures have been deployed to fix the situation, and in 2019, the US saw the lowest unemployment rate in over 50 years, at 3.5%. The month of September was the 108th consecutive month with job gains, as more than 136,000 new jobs were added to the market.
Considering the US’s working population, even a 3.5% unemployment rate means that more than 5 million people remain either unemployed, between jobs, or simply without work. This still has a huge effect on the economy, as this would mean that most of those people are relying on welfare in one way or another.
While the unemployment rate is the lowest it has been in decades, the number of jobs created has plunged. In 2018, the average number of jobs created per month was 223,000, while the current year’s average has been around 161,000.
Everyone is Working
You would think that the super-rich wouldn’t want to work, and don’t work, but you’d be thinking wrong. The top 1% of America actually goes to work every day, rather than being idle.
However, it should be noted that the wealth of these top 1% comes from non-wage income sources, which is another way of saying that their shares in their company and the value of these shares determine their wealth.
It is argued that the returns the owner receives, are gained by the human capital employed by them. Therefore, they are part of the labor income.
Minimum Wage and Employment
While the current federal minimum wage in the US is $7.25, most states and cities tend to have higher minimum wages. Compared to historical records, there has been an increase in the minimum wage. But if we inspect it from a purchasing power parity point of view, there hasn’t been much of a change.
Technically, an increase in the minimum wage never changes the number of minimum wage jobs, it just causes a change in the distribution of jobs.
Usually, increasing the minimum wage does not affect the overall employment levels, it just means that the workers are getting better pay. However, even that is not the case most of the time. This is because there is usually a spillover effect where people already earning above the minimum wage tend to get a hike in their wages too, rather than only the actual minimum wage workers.
The Automation Effect
Automation has affected a lot of industries and is set to replace more and more jobs, as better technology enables companies to deploy better automation measures. For example, the auto industry was labor-heavy, up until the introduction of fully automated production lines. Nowadays, companies like Tesla are developing models where there will be no need for a human on the production line.
The same is the case with a lot of other industries, such as tech, food & beverage, apparel, and manufacturing, among others. Robots require no pay, can work nonstop for longer, require little to no external effort, and are fully reliable. For a company, a robot is the perfect employee. Therefore, from a purely capitalist point of view, humans are no longer needed in a lot of roles, especially the mundane ones.
Thus, automation has already affected a lot of today’s job market and put a lot of people out of work. Perhaps this is why there has been an increase in the number of people attending colleges since automation mostly affects the jobs of less-educated workers.
However, educated workers may also be left out soon.
The AI Revolution
Artificial intelligence and machine learning basically amount to computers analyzing millions upon millions of scenarios, historical data, and facts, to create predictive thoughts. AI can already be observed in virtual assistants like Amazon’s Alexa or Apple’s Siri. However, at the moment, they are just responsive assistants.
Sooner rather than later, AI will be able to come up with complicated plans, develop strategies, and deploy correctional measures based on real-time data, which can replace the jobs of high-level people such as data analysts, creative directors, and digital marketing experts, among others.
Today’s job market is better in a lot of ways but has gotten way more complicated. Currently, the requirement of a college degree is greater than it has ever before. However, that is bound to change soon.
Companies like Google are willing to give a chance to people without college degrees by favoring their skills and thought processes over a degree. Other companies are following in Google’s footsteps, which means we might even see a drop in college graduates too in the near future.