Job Market
Categories: Econ
The job market is made up of people looking for jobs and jobs looking for people. It’s not a physical place, like a job fair or Trader Joe’s. It’s a concept.
When unemployment is low, the job market is said to be strong: there are more people working and fewer people looking for work. And those who are looking tend to have a better negotiating position with potential employers, since companies have to try harder to find the talent they need. When unemployment is high, the job market is said to be not so strong: there are more people than there are jobs available, which means there are folks out of work and probably struggling to get by. Not only that...it means organizations can offer lower pay and fewer perks, because there are more than enough people willing to settle if it means they’ll have a job.
But just like Transformers, there's more to the job market than meets the eye.
It’s not just about how many jobs are available versus how many people need jobs. When economies change—like when they move away from manufacturing to knowledge work, for example—that might have a big effect on the job market. There might be a ton of available knowledge work jobs, while at the same time, there might be a ton of available manufacturing workers. If the existing open jobs require skill sets that jobseekers don’t have, then there’s a job market mismatch going on.