Even if the economic growth rate remains as moderate in 2001 as it has been in the second half of 2000, job growth will outpace the growth of the working age population -- leaving the U.S. with a continued shortage of workers, according to a forecast released by the Employment Policy Foundation.
If the economic growth accelerates back to the 1996-1999 trend in the last half of 2001, unemployment could reach the 3.6 to 3.8 percent range -- new historically-low levels. In addition, the median time it takes for job-seekers to find employment may drop to below six weeks as the labor market continues to tighten and the Internet helps speed up job searches. In 2000, half of all job-seekers found employment within 6.1 weeks -- the lowest number since 1990.
Job growth next year should be on par with this year or about 1 million higher -- depending on the strength of the economy, according to EPF. In 2001, 1.2 million jobs could be created, if economic growth continues at the same rate as the second half of 2000; if the economy resumes its 1996 to mid-2000 pace during the second half of 2001, 2.3 million jobs could be created in 2001. The IT sector will continue to be strong, accounting for between 100,000 to 200,000 of the new jobs. Some 1.0 to 1.4 million of all newly created jobs will require college-level skills.
Of all the newly created jobs in the economy, some 500,000 could go unfilled as the U.S. continues to face a critical shortage of skilled workers. In 2000, 80 percent of new jobs went to college graduates. Employment for those with only high-school diplomas declined for the fourth time since 1992. With new college graduates numbering less than 1.2 million per year, the U.S. is producing too few college graduates to replace retiring workers and fill newly created jobs.
Retention and recruitment will continue to be a critical employment issue in 2001. In 2000, one in seven (13.8 percent) persons voluntarily left their jobs for other employment (a decade high). Currently, half of employees have been with their current employer less than 3.5 years and one-quarter have tenure of less than one year. Although there is more turnover in workers' early years (an average of nine jobs are held between ages 18 to 34), median tenure is 4.8 years in the 35 to 44 age groups, down 12.7 percent from 1987.
"Although the 2001 outlook is sunny overall, there is no question that our country will face challenges in overcoming an acute skills shortage," said EPF President Ed Potter. "In order to keep the economy in an expansion phase, it will be of utmost importance to update employment policies to increase labor force participation; increase the college completion rate; facilitate coordination workforce development of relevant skills; promote life-long learning; allow rational, demand-based immigration; and facilitate innovative and flexible employment arrangements."
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