Does a white-hot labor market have downsides?

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Does a white-hot labor market have downsides?

Jun 10, 2022

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The labor market in the US is currently dominated by eager employers and even more, eager employees, while this might sound good, it has its downsides.

Shanna Jackson, the president of Nashville State Community College is struggling with a good news dilemma, her students are taking up jobs from employers who are eager to hire and pay good wages. The problem is most of these students were on the path to earning a degree which they drop in order to take up the attractive packages offered by desperate employers. While an incomplete education might not bother them now, Ms.Jackson worries that it will come back to haunt them soon because as suggested by the Federal Reserve Board, the job market is not going to remain this hot for long. The FRB is raising interest rates in an attempt to slow the economy and curb inflation.

A strong labor market often forces people to not prioritize training, for the time being, having said that, this poses an unfair trade-off for students with families or other financial responsibilities. "If you've got housing costs rising, gas prices going up, food prices going up and the short-term decision is: Let me make money now and I'll go back to school later." The issue is most prevalent in hospitality-related programs where credentials are valued but not technically reacquired. Having said that, no one can be blamed for the present situation, cutting working hours to go to class now means passing up an opportunity to earn higher wages amidst the rising costs of food, fuel, and housing.

Source: The New York Times