The U.S. Labor Market Is Far More Stable Than People Think
The prevailing narrative is that U.S. workers have never been less secure, facing a high threat of job loss. In fact, job security is at an all-time high. The mismatch between perception and reality risks stirring opposition to globalization and technological innovation.
A prevailing narrative that serves as a backdrop for the 2016 presidential campaign is that Americans now live in an economy of perpetual job insecurity, in which they are easily and frequently laid off. Indeed, job satisfaction surveys conducted by the Conference Board confirm this sense of insecurity. In 1987, a solid majority of U.S. workers (59 percent) said they felt their jobs were secure; by 2014, less than half felt that way (47 percent).
Yet while people feel less secure now than in the past, employment data tell a different story. Job security has in fact steadily increased since the 1990s: The number of workers losing their jobs because their companies have downsized or closed has dropped steadily. Meanwhile, the number of new job postings, as a share of all jobs in the economy, has surged since the Great Recession.
This mismatch between perception and reality is potentially dangerous, because if lack of confidence in the labor market persists, it could trigger a political push for unduly restrictive labor protections or stir opposition to globalization and technological innovation, which could backfire by hampering growth.
This report examines data from the U.S. Bureau of Labor Statistics and finds that job security has risen since the early 1990s, and that the general perception of job insecurity is therefore misguided. The more significant problem is two-fold: skills mismatches in which employers are unable to find candidates with the necessary qualifications for the job openings they have and reduced opportunities for new job creation, particularly for higher-paid jobs, both of which feed workers’ anxieties about their prospects.