Is full employment good for the economy? Hall County is getting pretty close to finding out.
As today’s story on page 1A indicates, the jobless rate of 3.3 percent in Gainesville-Hall means that nearly everyone who wants a job has one. That’s great news for job seekers and those who have work but are looking to improve their status with positions that offer better pay and benefits. In that scenario, the individuals surely benefit.
But in the economic big picture, being close to full employment can create problems for business expansion. Companies looking to locate in the area and find workers may be hesitant without a ready workforce on hand. And those already here may find it difficult to expand their operations without being able to hire the workers they need.
The state Labor Department data reflected this in March. While more Georgians found work, some 14,000 more than in February, and unemployment claims were down, the number of jobs available in the state has dropped.
Georgia’s unemployment rate of 4.4 percent is below what the Federal Reserve considers to be “full employment” at 5 percent. Some 5 million Georgians now have jobs, an all-time high. That’s reflected in job fairs where the number of employers seeking help often outnumbers those seeking positions.
Nationally, the jobless rate for April fell to a miniscule 3.9 percent, its lowest since 2000, but job creation has slowed in recent months as well. Hourly wages are up 2.6 percent, likely reflecting the effort of employers to retain and attract workers in a tight market.
When most people have work, it helps the economy in several ways. Consumer confidence is high and people are spending money, which helps retailers. The extra sales and payroll taxes workers pay boost government revenues, one reason the 2019 Georgia budget includes extra spending for schools and other priorities. Housing sales benefit from people taking advantage of friendly interest rates and steady pay.
So it’s all good, right? Mostly, but there are downsides to the happy numbers.
Keep in mind the jobless rates only reflect those actively seeking employment, and excludes those who have left the labor force for whatever reason. During the Great Recession, many who lost jobs, particularly in industries that have downsized heavily, gave up looking for work. The jobless numbers also don’t reflect those who have taken lesser paying jobs to make ends meet when their chosen professions dried up, those considered to be “underemployed.”
In the yin and yang of the economy, there are trade-offs. Beneath the rosy picture on the surface, not everyone who is able to work is doing so, not everyone has the job they truly want and not every business is able to find the people they need.
Much of the gob growth has been concentrated in specific professions such as health care, technology and certain trades. Of the top 10 growing jobs in Georgia, most fall under health services, an industry that continues to expand to meet the needs of the aging baby boomer population.
That shows why it’s important to support technical education to train a workforce that desperately needs more skilled craftspeople than it does liberal arts graduates. Jobs for welders, truck drivers, plumbers and electricians are plentiful, pay well and fill key roles in the economy.
Still, for businesses in the food and hospitality industries, and similar jobs that don’t require a degree or specific training, finding enough workers is a challenge. “Help wanted” signs have been seen regularly out front of many shops in town. In addition, job turnover is a problem for such businesses who lose workers to others that pay better.
Another down side of full employment is inflation, which is the domino effect from employers having to pay better salaries and benefits to fill jobs. Consumer prices rose 2.4 percent in March over the previous year, the highest rise in 12 months. That’s coupled with a rise in fuel prices that can affect not only filling our vehicles but many products we buy. So even as more people are working and earning, the cost of living eats away at take-home pay.
However, inflation kept under control isn’t always a negative; higher interest paid on savings accounts along with higher wages could lead to both more spending and savings for families.
Amid this comes a national debate over a “job for everyone” as proposed by Sen. Bernie Sanders, a 2016 presidential candidate and avowed socialist. His plan, endorsed by many Democrats and liberals, would provide a government-supported job for every American who wants one at a minimum wage of $15 an hour.
Analysts differ on the benefits of such a plan. While giving everyone a chance to earn a living has its merits, the ripple effects on the economy can’t be ignored. When everyone has work because the government is providing paychecks, it would make it that much tougher for private industries to find workers at a reasonable cost. If forced to compete with the public sector for employees, such businesses would be forced to keep raising salaries and, in turn, the cost of goods and services. In the end, having jobs created by the free market, as we see now, is the best path toward full employment.
Having more people working, producing and paying taxes than idle hands seeking government assistance is a boon to both the individuals and the community. The challenges of hiring, expanding, turnover and inflation seem to be the price we pay for having a robust economy where there is work to be found and productivity can soar.
In the big picture, we’ll gladly take the bad with the good for now even as we watch where this rollercoaster will take us next.
Share your thoughts on this or any other topic in a letter to the editor; you can use this form or send email to email@example.com. The Times editorial board includes General Manager Norman Baggs, Editor Keith Albertson and Managing Editor Shannon Casas, plus community members Susan DeCrescenzo, Cathy Drerup and Brent Hoffman.