The U.S. unemployment rate is now at 4.1 percent for the first time in about 17 years. Before that, the last time it was this low was the late 1960s. Low unemployment has a major impact on the job market.
When the unemployment rate is low, companies are forced to compete for workers. One way that they do this is through wages. In times of low unemployment, some companies have to increase wages to attract employees. Target took the plunge last year, raising the minimum they pay their employees to $11 per hour. Walmart just recently followed suit, also raising the minimum for its U.S. employees to $11 per hour.
That said, not all parts of the country experience unemployment equally. Some areas have rates much lower than the national one, while others have higher rates. Competition for workers in some areas is so intense that employers are using extreme measures, such as hiring prisoners as full-time employees.
Some Things Are Not What They Appear
While a low unemployment rate is generally good news for employees, not all things are what they appear to be. The current low unemployment rate is tempered by a couple of negative factors
First, there are still about 4.9 million people working part time who want full-time work. An additional 1.5 million people are considered long-term unemployed, meaning that they’ve gone without a job for at least 26 weeks. Meanwhile, nearly half a million people are considered “discouraged workers.” In other words, they have given up looking for work because they feel that they can’t find a job. While they don’t have jobs, they aren’t considered to be unemployed, as they are not actively seeking employment.
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These numbers are significantly better than they were a year ago, but they illustrate that the low unemployment rate — while great news overall — still leaves many people in less-than-desirable situations. It will take a significant period of low unemployment for these numbers to drop to more palatable levels.
Because of these factors, when jobs are posted, there may be more applicants than the low unemployment numbers would suggest. For instance, many people who already have jobs are looking for better ones, or even just for full-time employment.
If you're looking for a job and want to capitalize on the booming market, here are a couple of things to consider:
1. Keep Your Current Job While Looking
This may seem like a no-brainer. But some people, knowing jobs are more plentiful than they have been in a long time, may consider walking off their present job without having first found a new one. This is a bad idea.
It's actually easier to get a new job if you’re currently working. And even if jobs are plentiful, it may take time to find a suitable one. Exercise some restraint and find a new job before bailing out on your current one.
2. Consider the Whole Package
Your rate of pay is only part of the deal. Perhaps a very significant part, but still only one. There are also benefits to consider. Will you lose (or gain) insurance coverage with a new position? Consider not only health care, but also other types of insurance that your employer may offer, such as disability or life insurance. It may not be worthwhile to gain a small increase in your pay rate, only to lose a significant amount of valuable protection.
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Retirement benefits are another major consideration when looking for a job. You may have to wait to be eligible to contribute to your savings plan when you start working with a new employer. And not all retirement plans are equal. Carefully consider employer matching, vesting schedules, and other factors. Your step forward should not involve two steps backwards!
3. Other Factors to Consider When Looking for a Job
Work is a major determinant of our quality of life. Some companies really do help their employees out, offering benefits such as childcare and other perks that can make your work life easier. Consider any advantages the new position may offer, as well as the disadvantages. A small increase in your pay may look attractive, but it suddenly becomes less so if the job involves a longer commute.
Overall, there are fewer people looking for work, while companies are growing and hiring. There is no guarantee that this will continue, but neither is there any reason to expect a sudden and drastic end to this trend.
When companies compete for employees, the employees win.
They win because competition drives up wages, and because it may be easier to find the job they really want — not just some part-time or temporary gig.
The Bottom Line
The bottom line for job seekers is that they have opportunities. The opportunity to do better for themselves now and the opportunity to advance within an organization to build a better future.
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When looking for a job, wages are a factor, but not the only one. Carefully weigh the benefits and other aspects of the jobs that you consider. It has been a long time since the unemployment rate in the U.S. was this low. It could be a good time to see if you are truly getting your worth in the market.