My bet is that it keeps getting worse. If you think about it, most people work to live. If you can live on one job—or if your family can live on one paycheck—why would you want or need a second job? The data shows that there are limits to that potential adjustment. In boom times, such as the late 1990s and just prior to the pandemic, the jobs per worker seemed to max out at about 1.0. And I think that makes sense.
This brings us to the present, where the jobs per worker number is once again approaching 1.0. Other things being equal, if the average worker or family can support themselves on one job, then that is likely to be a maximum. That suggests the labor crunch is likely to persist, and may even get worse, the closer we get to 1.0.
More Like This To Come
This post is a first take on this issue, and I can see some holes in the argument. At the same time, this is probably one of the biggest questions that needs to be answered as we figure out how the labor force and economy will evolve in the next decade. I will be spending more time on this, but right now, I would say expect more jobs reports like this one.
Brad McMillan is the chief investment officer at Commonwealth Financial Network.