The unemployment rate increase in July has raised concerns among economists, particularly regarding marginally attached workers. These workers, as defined by the Bureau of Labor Statistics, are individuals who are available for work and desire employment but have not actively sought a job in the four weeks leading up to the survey. The fear is that these individuals may transition into becoming “disconnected workers,” dropping out of the labor force due to factors such as low wages or intense competition.
According to a recent analysis by Alí Bustamante, the labor economist and director of the Worker Power and Economic Security program at the Roosevelt Institute, the number of marginally attached workers has been steadily increasing. Over the past three months, this segment has grown by an average of 247,000 workers per month. Bustamante, along with other experts, sees this as a warning sign for the labor market.
Nick Bunker, the economic research director for North America at Indeed Hiring Lab, believes that a sustained increase in marginally attached workers could indicate a problematic trend in the U.S. labor market. This trend suggests that people are willing to work but are struggling to find employment opportunities. However, it may be too early to determine whether this segment will continue to grow rapidly.
Teresa Ghilarducci, a labor economist and professor of economics at The New School for Social Research, highlights the importance of monitoring the situation closely. She notes that the recent spike in marginally attached workers could be a result of a correction following several months of strong job reports. Job growth is beginning to slow down as more individuals enter the job market, leading to heightened competition for available positions. This shift signals a potential “new phase” in the market, according to Bustamante.
Overall, the rise of marginally attached workers poses a significant challenge for the U.S. labor market. While experts are closely monitoring the situation, the long-term implications of this trend remain uncertain. As the labor market continues to evolve, it will be essential to address the needs of these marginalized workers and ensure that they have access to meaningful employment opportunities.