Building Wealth If you have been thinking about switching jobs, now may be the time.
The fact is that the labor market is incredibly tight right now. There are lots of jobs and not enough workers to fill them.
Employers are so desperate for employees, you might even be able to start a bidding war among employers for your services...
My analyst Jeff Havenstein touched on how tight the labor market was a few weeks ago, highlighting how one Florida McDonald's had to offer $50 just for folks to show up for an interview.
And it has gotten even worse since then. Companies are struggling to find qualified workers.
Below is a chart of job postings on employment website Indeed. Earlier this year, there were the same number of job postings as there were before the economy crashed in March 2020.
Today, there are 19.1% more job openings than before the pandemic...
Here's the thing... This shortage of workers is not just limited to one single industry like restaurants. It's across the board. Jobs are needed in many different sectors.
There has been a massive spike in demand for factory workers...
More teachers need to be hired...
Job openings in the business world are near a high as well...
Finally, more people are voluntarily quitting their jobs. Most folks only quit their jobs if they can find something better elsewhere. It's a telltale sign of a tight labor market.
Voluntary resignations are trending higher while layoffs are trending lower. Setting aside the COVID-19 pandemic's massive spike – the off-the-charts layoff number for March 2020 was 8.8% – take a look at these monthly figures...
Now, there are conflicting opinions about what's causing the worker shortage...
Republicans argue that bigger unemployment benefits are discouraging Americans from going back to work – particularly for folks who can make more on unemployment than from an entry-level job. We've read many stories where folks say this is the reason they don't head back to work.
The Biden administration and Democrats blame other factors. For example, the cost of childcare has been soaring in recent years, and some parents would have to pay all or most of their income to have someone watch their kids during work.
Plus, many Americans don't want to go back to work yet for fear of catching COVID-19. And some businesses have shut down for good, which means that some unemployed folks have skills only in the fields that aren't hiring. That's caused many older Americans to simply retire.
I think the current tight labor market is caused by a mix of all these factors. But whatever the cause, it's apparent that businesses are having trouble hiring workers. And that's especially true with small to medium-sized companies...
According to a March survey by the National Federation of Independent Business, 42% of small-business owners said they had job openings that they could not fill – a record high.
If I would have told you one year ago that we'd have this problem – the problem of having not enough workers to fill open roles – you probably wouldn't have believed me. You might have laughed at me and thought I was joking.
Millions of Americans were laid off one year ago. And it seemed like the effects of the pandemic would last for a long time.
But the economy has come surging back. More companies are hiring, which is great. And folks are out spending the money they saved during the pandemic.
It's always hard to bet against stocks when the economy is thriving. That's what we have today. So while you might be scared of the possibility of a market crash, you need to have some money invested in stocks today.
A booming economy means stocks should continue to rise. This won't always be the case – there are plenty of real dangers of course. But for now, stocks look like a good bet.
I recently released all the details on a once-in-a-generation investing trend I'm seeing in a sector that's booming... biotechnology.
I even revealed my favorite stock right now. I call this company the "Amazon of Biotechnology."
What We're Reading...
- Here's why it's so hard to fill jobs in some states.
- The tight labor market is forcing McDonald's to increase wages.
- Something different: Are vaccine incentives actually working? Krispy Kreme says yes.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig and the Health & Wealth Bulletin Research Team
June 2, 2021