The U.S. economy created 160,000 jobs in April 2016, lower than economist expectations, while the unemployment rate remained steady at 5 percent, according to the latest report by the U.S. Bureau of Labor Statistics (BLS). Wall Street had expected that nonfarm payroll jobs would show a growth of 202,000 jobs, and Goldman Sachs projected a gain of 240,000 for the month.
Job growth was concentrated in the professional and business services sector, which added 65,000 positions. Healthcare gained 44,000 jobs, while financial institutions added 20,000 despite some high-profile layoff announcements on Wall Street. Mining lost 7,000 jobs and other industries showed little change, including construction, manufacturing, retail trade, information, transportation and warehousing, government, and leisure and hospitality.
Wages rose, however, with average hourly earnings up 8 cents an hour to $25.53, representing a 2.5 percent annualized gain. According to the Federal Reserve Bank of Atlanta’s wage growth tracker, the median U.S. worker is enjoying their highest wage growth since 2009, a rise of 3.4 percent year-over-year. The Bespoke Investment Group believes that the Atlanta Fed wage growth tracker is arguably a better snapshot of wage growth than the average hourly earnings published by the BLS.
Worker Confidence Falling
According to the National Worker Confidence IndexTM, a survey of U.S. workers from HRO Today Magazine and Yoh, American workers’ confidence has reached a two-year low after falling for the second consecutive quarter. The index gauges workers’ perceptions of the four key drivers of confidence: the likelihoods of job loss, a promotion and a raise, as well as overall trust in company leadership.
Key takeaways from the study include:
Occupational Licensing Laws: Barrier to Entry
Young people entering the job market have always faced challenges and barriers to entry, including a lack of skills and experience and limited professional networks. Increasingly, however, they are facing a new obstacle – legal requirements that eliminate them from access to jobs before they even apply.
Occupational licensing laws – rules, usually at the state or local level, which require workers to get a government-issued license to hold certain positions – are the crux of the issue. While these occupational licensing laws have always applied to certain positions, such as doctors and accountants, the requirements are increasingly spreading to barbers, cosmetologists and even landscapers. For example, the New York Department of Labor lists 130 occupations that require licenses.
A White House report from last year found that occupational licensing requirements have quintupled over the past 60 years, and now cover one in four workers. And new data from the Bureau of Labor Statistics (BLS) found that 22.4 percent of workers have a government-issued license, and 25.5 percent have either a license or privately issued certification. While most licenses are concentrated in the medical field, nearly one in five workers had a license in 2015 in a nonmedical occupation.
These licensing rules are particularly challenging for young workers trying to enter the job market, especially those without a college degree. The unemployment rate for adults aged 18 to 35 with neither a license nor a college degree was 9.9 percent in 2015. For those with a license, but no degree, it was 5.2 percent. And those who manage to find full-time jobs without a license earn 13 percent less than those with a license.
Flexibility Important to Freelancers
The “2016 Freelancer Lifestyle” survey by Toptal, a work intermediation platform, finds that the growing number of contract workers enjoy the flexibility that freelancing offers, and do not miss working in a traditional office environment. The survey of 2,000 workers in 165 countries found that 93 percent of freelancers enjoy the flexibility of their lifestyle. Additionally, 13 percent said they would not return to work in an office, while 46 percent said they would only if it was for their dream job.
Freelancing seems to offer greater control over work-life balance. Freelancers who are parents said that they are able to create schedules that suit their lifestyle, and love that they are able to spend more time with their children. Two-thirds of freelance parents agree that their kids are better off because they work from home.
Other main conclusions drawn from the study include:
Freelancers’ Contributions to UK Economy
According to research published by the Association of Independent Professionals and the Self Employed (IPSE), freelancers generated £109bn for the UK economy in 2015, and now account for 6 percent of the country’s workforce. The data indicates that there were 1.91m freelancers at the end of 2015, a rise of 36 percent since 2008, with 1.65m choosing freelance as their main job and 225,000 freelancing as a secondary job.
The research also showed that there has been a 70 percent increase in freelancing mothers over the past eight years, followed by a 63 percent increase in mature freelancers (those aged over 60), and a 51 percent increase in young freelancers (aged 16 to 29).
“Every day freelancers make an enormous contribution to businesses across the UK and the economy as a whole. Research shows the vast majority of freelancers love what they do, so it’s no surprise that increasing numbers of people are turning to this way of working. Large firms and, increasingly, small enterprises are tapping into this growing pool of independent workers who are available on demand, with the specialist skills to hit the ground running. There are few signs of the growth in freelancing slowing down anytime soon.” ~Chris Bryce, CEO of IPSE