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Is America Headed Towards Maximum Employment?
August 30, 2021
Economic Recovery in the United States Proves to Be a Careful Balancing Act
America’s post-pandemic economy still has a ways to go in order to achieve full recovery. Unemployment benefits, COVID variants, and rolling lockdowns have left many businesses desperate for workers to re-enter the job site to prompt some sort of return to normalcy.
The Fed’s goal is to reach maximum employment, pushing for equality among different labor markets across the United States. How employers navigate the concept of maximum employment could be challenging. As job markets become more competitive and workers slowly come back to the job site, revised offerings and temporary labor will play an important role in maintaining profits and productivity.
What Is Maximum Employment?
Maximum employment is a concept in which the American economy sees all members of the population who are willing and able to work, employed in the most efficient way possible. This is a different tune from the economic bounce-back that occurred after 2008, in which "full employment" was the goal. Today, the concept of maximum employment would see low-wage workers experience regular wage growth and equality among themselves, rather than just a low unemployment rate.
The Intersections of Maximum Employment and Inflation
For employers, it’s essential to understand that full economic recovery is not as simple as cutting unemployment benefits and forcing workers back to work. Complete economic recovery is a careful balancing act that sees inflation of the American dollar occur for a temporary period and then rebalance itself over the next several years.
Vulnerable communities that have been hit hard by the pandemic would suffer if unemployment benefits were suddenly cut. A lack of financial support from the government could hurt the economy as well, with a “house of cards” effect where the unemployed are unable to pay their rent or mortgages. The result would be a stalled economic recovery paired with a potential collapse of the housing market.
The plan from the American government and the central bank is intended to see a faster recovery than what was experienced in the 2008 recession, with a transitory period where benefits and stimulus continue, and the economy sees a temporary period of inflation.
Maximum Employment and the Challenges of Our Current Labor Market
This is unknown territory for the United States, and the workers that lost their jobs during the pandemic might need new skills to address shifting demands in the economy. The pandemic also prompted the retirement of older and more experienced workers, with available staff unable to handle these roles because of their lack of skills. It’s also important to note the sudden shift in the technology sector, where service and retail had massive swings in their business.
Online shopping, food delivery, and the rise of remote work mean that the unemployed now need new skills to fill available roles, as the jobs they once had might be different or no longer existent. In order for maximum employment to occur, workers will have to become continually more skilled to address the needs of a changing job market.
What Will a Maximum Employment Economy Look Like?
COVID likely changed many industries forever, and employers will need to look at the bigger picture and grow skilled workers from the ground up for long-term profitability. Job seekers have different preferences, are more selective, and seeking other offerings than what was available pre-pandemic. With many unemployment benefits ending in the fall, temporary labor continues to play an important role as businesses navigate the economic uncertainty in 2021 and beyond. In a society with maximum employment, companies will see workforces grow and become more skilled, work with comfortable wages, and build a long-term and fruitful relationship with their employers.
Addressing Temporary Labor Shortages With AFIMAC
AFIMAC continues to be recognized as the industry leader in temporary work solutions for corporations across multiple industries in the United States. AFIMAC can address complications related to strikes, labor negotiations, walk-offs, or absenteeism among your workforce, effectively navigating the economic challenges of the COVID-19 pandemic. AFIMAC maintains a directory of highly skilled laborers that can address long-term strikes or labor shortages and can assist with any complicated issues as they arise.
Contact us directly to learn more about available services for business owners and industry leaders.