The recent increase in the unemployment rate has raised concerns among economists, particularly in relation to the growing number of marginally attached workers. These individuals are available and willing to work but have not actively searched for employment in the past month. This rise in marginally attached workers poses a potential risk of transition into “disconnected workers,” who may completely withdraw from the labor force due to factors such as low wages or high competition.
According to a recent analysis by labor economist Alí Bustamante, the segment of marginally attached workers has been steadily increasing by an average of 247,000 workers per month over the past three months. Bustamante, who is the director of the Worker Power and Economic Security program at the Roosevelt Institute, views this trend as a warning sign for the labor market. He combines marginally attached workers with unemployed workers to form the U-6 category, which provides a broader perspective on labor market conditions.
Nick Bunker, the economic research director for North America at Indeed Hiring Lab, shares Bustamante’s concerns regarding the growing number of marginally attached workers. Bunker warns that an ongoing increase in this segment could indicate difficulties in job availability and accessibility for these individuals. While it is too early to predict the future trajectory of marginally attached workers, experts are closely monitoring this trend for potential implications on the overall labor market.
Labor economist Teresa Ghilarducci, a professor at The New School for Social Research, highlights the significance of observing the behavior of marginally attached workers in the coming months. Ghilarducci emphasizes that sustained growth in this labor segment could raise substantial concerns about job market dynamics. The recent surge in marginally attached workers may also serve as a correction following exceptionally strong job reports in previous months, reflecting a shift in market conditions.
Alí Bustamante suggests that the current labor market is entering a new phase characterized by increased competition for available jobs. As job seekers actively pursue employment opportunities, the level of competition for open roles has intensified, signaling a potential shift in the overall market dynamics. Despite the strength of the U.S. labor market, workers are facing substantial challenges in securing desirable job positions due to heightened competition.
The rising number of marginally attached workers raises significant concerns about the health and stability of the labor market. Economists and experts are closely monitoring this trend to assess its implications for job availability, competition, and overall market conditions. As the labor market enters a new phase with heightened competition, addressing the needs of marginally attached workers becomes crucial to ensuring a resilient and inclusive workforce.