State of the Labor Market

February 2020 Jobs Day Preview: Hires from Outside the Labor Force Find Jobs in Child Care, Housekeeping

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As more workers move from outside the labor force directly into employment, the most popular destinations are jobs in lower-paying occupations.

Workers are increasingly jumping right into a job when they enter the labor force instead of making a long stop in unemployment. As the labor market has strengthened, the share of newly-employed workers who were previously out of the labor force has grown to almost 75%. A stronger labor market is pushing wage growth for lower-wage occupations, and the higher wages are making these jobs more attractive to workers. 

The kinds of jobs that these workers move into are distinctly low-paying, including child care worker and housekeeping cleaners. Overall, hires from outside the labor force are more likely to add employment to jobs in retail, child care, and social assistance as compared to other industries. Not only do these jobs tend to pay lower wages, but they also employ a large share of women. These out-of-the-labor-force-flows are contributing to the rise in prime-age women’s labor force participation.

A labor market that pulls more and more people out of the labor force is one that will present greater opportunities for lower-paid workers. With that in mind, I’ll keep an eye on whether the labor force participation rate continues to pick up in the February employment report. 

Elsewhere in the report, I’ll be looking at:

  • Whether the warm weather in February once again contributes to stronger payroll growth,
  • How much higher the labor force participation for women in their prime working years (25 to 54) will get,
  • And whether long-term unemployment will budge down or remain stubbornly elevated compared to 2000-era levels. 


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