Workers are now returning to the labor market. In February, the labor force participation rate for workers between age 25 and 54 hit 83.2%, surpassing pre-pandemic levels. And last month, the overall labor force participation rate continued its upward march, increasing to 62.6% and nearing a pre-pandemic era high — still slightly below the February 2020 rate of 63.3%. With national unemployment at 3.5% and a total Civilian Labor Force of 166 million workers (see chart on page 13), you might logically infer that 5.8 million workers are looking for work or are in transition. But according to the U.S. Bureau of Labor Statistics, there are an estimated 10 million job openings (see chart on page 12). Quite simply: There aren’t enough workers to fill the number of open jobs in the United States. And we know the gap is even wider for professional level roles and roles that require a specific knowledge set or skill. Inflation Rate and Growth of Wages This is another subject that has received a lot of press and is often miscommunicated. Yes, wages have increased over the last two years. In the accounting and finance sector, we have seen this more in the lower- to middle-level positions with slight gains in the director- and executive-level roles. Understandably, it’s been challenging for companies and hiring managers to wrap their heads around the increase in compensation costs associated with talent and labor. But as the chart on page 14 shows, wage increases are just now catching up with inflation, and we spent much of 2021 and 2022 with a significant gap. Real wages are important to workers, and employ - ers need to keep this in mind when hiring and when evaluating current employee compensation levels for retention purposes.
7 ARG Quarterly Barometer Q2 2023
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