Lowest Population Growth In Over A Century Means Tighter Labor Market For Business

Business sales won’t increase as much with slower population growth, so companies should adjust their expectations downward a small amount. Companies serving the markets related to life and death should adjust their own market estimates, downward for births and upwards for funerals.

The greatest business impact of the demographic changes will be tighter labor markets. The unemployment rate rose when the pandemic triggered layoffs, but changed little for jobs that can be performed remotely. With the vaccine soon to help many sectors of the economy, the labor market will tighten up again.

The new relief bill will send an extra $300 a week to those collecting unemployment insurance, meaning that those who had been making less than $15 an hour, approximately, will be better off not working than back on the job. The threshold is even lower for previously part-time workers. (The specifics vary from state to state.)

The upshot of the latest news is that employee retention and recruitment will be even more important in 2021 than it has been in past years.

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