The US economy could have 28 million more jobs over the next decade than the federal government thinks

Now Hiring Sign
A pedestrian walks by a now hiring sign at Ross Dress For Less store on April 02, 2021 in San Rafael, California.

  • The US could reach even higher than expected levels of full employment over the next decade.
  • A new paper from the Roosevelt Institute finds the employment-population ratio could be 68% by 2031.
  • To do this, the authors looked at gaps in employment by race, gender, and education.
  • See more stories on Insider’s business page.

As the US continues to recover from the pandemic, a new paper finds the number of Americans with jobs could potentially eventually be far higher than before the crisis took a toll on workers and businesses.

The Roosevelt Institute just released a paper that looks at what full employment could look like in a decade by looking at how much additional job growth is needed to close gaps by age, race, education, and gender.

Based on their research, the authors find the employment-population ratio could be 68% by 2031, higher than ratios reported since 1948. The authors note this is about 10 points higher than the Congressional Budget Office’s projections of maximum employment.

Closing the employment gaps for race, gender, and education could mean the US reaches 190 million workers by 2031, or about 28 million more jobs than CBO’s projections, the authors found.

“Moving toward true full employment will have tremendous benefits – not just more growth, but a more equal economy,” Lauren Melodia, deputy director of macroeconomic analysis at the Roosevelt Institute and one of the authors, said in a press release. “With strong public investment, we can greatly reduce the employment gaps between Black and white workers, women and men, and those with more and less formal education.”

“If full employment means that everybody who wants to work and is able to work has a job, we were very far from that in 2019. And that suggests that we potentially have space for much faster growth if we can sustain demand over the next decade than a lot of people are expecting,” J.W. Mason, a fellow at the Roosevelt Institute and one of the report’s authors, told Insider. “So the larger story here is the possibility of a real historic boom in the coming years.”

The employment-population ratio took a hit during the pandemic, reaching a record low of 51.3% in April 2020 as people left the labor force or had their jobs cut. The ratio is now back up to 58.0% as of June 2021, still below pre-pandemic rates.

But the new paper argues that there needs to be “sufficient demand” to help get more Black Americans, women, and less-educated Americans into jobs and to reach full employment.

For example, take the employment gap over time for Black and white workers. The authors write that gap widens during recessions but narrows during tight labor markets.

“Because less-favored groups – Black workers, women, those with less formal education, those just entering the labor market – are generally last hired and first fired, the gaps between more- and less-favored groups vary systematically over the business cycle,” the authors wrote.

There aren’t enough jobs for everyone, Mason said, so some people don’t get hired while some are more “systematically favored in the labor market,” making it harder for some Americans to get hired even if they’re a qualified candidate.

“The data shows employment prospects for disadvantaged groups are more dependent on labor market conditions than for more privileged groups,” the authors wrote. “Employment gaps by age, education, and especially race are strongly responsive to current labor market conditions, as reflected in the unemployment rate.”

The unemployment rate for Black workers is 9.2% and 5.2% for white workers as of June 2021. Right before the pandemic, the difference between these two unemployment rates was three percentage points.

“When there aren’t enough jobs to go around, the people at the front of the line get hired and the people at the back of the line don’t,” Mason said. Historically, this includes Black Americans, women, and less educated workers. Mason notes we also need to improve childcare to get women back in the labor market, as care disproportionately falls on women.

Read the original article on Business Insider