The average American worker is in less danger of losing a job than anytime in modern history.
The percentage of employees who were laid off fell in early June to the lowest level since the government began keeping records in 1949, according to an obscure measure known as the insured unemployment rate. The rate fell a tick to 1.5%.
The insured unemployment rate divides the number of people collecting unemployment checks by the number of covered workers who are eligible for benefits if they are laid off.
The insured unemployment rate reached a 27-year peak of 5% in mid-2009 during the Great Recession, and a record 8.9% if workers who were receiving extended emergency benefits are included.
Although the economy is not growing as fast now as it did before the Great Recession, the risk of being laid off is as low as ever. Indeed, more and more companies complain they cannot find enough skilled workers to fill open positions. They are hardly likely to lay off talented employees unless business turns south.
Another labor-market indicator on job openings appears to support the view that companies are having a hard time finding suitable skilled workers. The rate of hiring declined in April even though job openings rose again.
To be sure, thousands of workers continue to lose their jobs each month, as is always the case in a huge U.S. economy. Nor is the low rate of layoffs proof that the labor market is better than ever. It’s not.
A broader measure of unemployment known as U6, for example, puts the U.S. jobless rate at 9.7%, well above the official 4.7% rate.
The U6 includes people who can only find part-time jobs as well as those who’ve grown too discouraged to keep looking. The rate was about 8% shortly before the Great Recession began.
What’s more, a smaller share of Americans are now part of the labor force. The so-called labor-force participation rate has fallen to 62.6% from 66% at the end of 2007.
In other words, only 63 of every 100 able-bodied Americans 16 or older hold a job or are looking for one. The last time the level was that low was in the late 1970s.
The rising level of retirements among baby boomers explains part or even most of the decline, but participation among younger age groups has yet to recover to prerecession highs. That’s a sign the labor market still has room for improvement.
Wages send another mixed signal. Companies are willing to pay more to attract workers or keep them from jumping ship, but hourly wages are only rising at a 2.5% annual pace instead of 3% or 4% gains that are typical at this stage of an economic recovery.
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