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Express Employment Professionals Chairman and CEO Bob Funk released seven predictions for 2014 related to jobs and the economy. “As for the future of jobs in America for 2014, I see little change in the unemployment rate. At the same time, I see the number of temporary workers achieving an all-time high and skilled workers will remain hard to find and in high demand,” said Funk, the former chairman of the Kansas City Federal Reserve. “I’ve been in the staffing business for nearly 50 years and certain trends are clear — the most notable is widespread uncertainty in the labor market. It will remain the driving force in 2014.”
Here are Funk’s predictions:
- The national unemployment rate will not change very much. The rate dropped from 7.9 percent at the beginning of 2013 to 7 percent, but Funk believes 2014 will end with a rate between 6.7 percent and 7.2 percent, little changed from its current rate.
- The labor force participation rate will stay stuck at 1970s levels. The current participation rate of 63 percent will fluctuate in a range between 62.6 percent and 63.5 percent by the end of 2014, little changed from its level in 1978.
- Hiring uncertainty will prevail throughout the year. The business climate remains murky and cautious, in part because of a general weakness in the economy and dysfunction in Washington, D.C. Businesses are also trying to understand the impact of the Affordable Care Act, which has created significant uncertainty that is adversely affecting hiring trends.
- Skilled workers will remain hard to find, even though good jobs await them. Workers with the right skills, especially blue-collar workers with the right training, will be in high demand. However, skilled workers will remain hard to find. “The marketplace is suffering a skills gap now and the gap will persist throughout 2014,” Funk said.
- The percentage of temporary workers will reach an all-time record-high. Driven by business uncertainty and changing labor trends, the percentage of workers who consider themselves “temporary” will break the record of 2.03 percent, previously set in April 2000, according to Staffing Industry Analysts. European nations have between three and four percent of their workforce on the payroll of firms like Express. In South Africa, where Express operates nearly two dozen locations, roughly seven percent of the country’s workforce is on the payroll of Express or one of their competitors. “We expect the United States to follow these global trends and a three to five percent temp penetration rate in the U.S. is not unrealistic,” Funk said.
- The disability rate will continue to rise. A recent study from the Federal Reserve Bank of San Francisco attributed part of the drop in the labor force participation rate to the “increased use of some social benefit programs, notably disability insurance.” According to the Social Security Administration, there are currently 8.9 million former workers collecting disability payments, up sharply from 4.7 million in 1998. Unless changes are made, the rate will easily exceed nine million former workers in 2014.
- Apprenticeships are returning to the marketplace. As manufacturing continues to grow, local economies recover, and businesses struggle to attract skilled trade workers, apprenticeships will return to the marketplace. This will be especially prevalent in local economies where manufacturing plants need workers to run sophisticated, high-end technology in order to promote innovation, productivity, and growth. An increased number of businesses will need work with local community colleges or vocational schools to develop apprenticeship programs because high school and college graduates are not being trained in the right skills.
“I may turn out to be right or wrong on these predictions,” Funk said. “But one thing is for sure — people want to work and businesses want good, qualified employees. That’s a trend that will never change.”