While looking through the monthly economic reports for February, it occurred to me not everyone is weird enough to look through monthly economic reports.  Looking at the influence the “Labor Market” exerts on our economy, I wondered what or who “Labor” is in our Labor Market, way down at the micro-level.  Folks, YOU are the “Labor”!  So, at the base micro level, we can look at what you bring to the Labor Market.

You bring two basics to the party-You (let’s go with ‘Person’ for this) and your Talents. Look at the Person as all the experiences you have had life-to-date.  You combine that Person with the Talents you have worked to develop over time.  As that combination, you enter the Labor Market, offering your services for some consideration (read: paycheck).  Ordinarily, individuals choose to take part in the Manufacturing sector or the Service Sector, although it is possible to switch over from time to time to further their position in some way.

Individuals always push to ‘get ahead’ in life in our economy.  Think it through, and it requires some sort of goals to work toward as well as a path to get there.  That path must include ways to increase your value in the Labor Market. The best example is Training: Your Value lies in knowing how to learn.  Apprentice programs, Vocational schools, Community Colleges, Universities, etc., are examples of ways to concentrate in a field so the Market will consider you worth more.

Supply & Demand

Here’s where macroeconomy forces influence your life.  When times are good, more people are working to fill the needs of producers.  As more jobs created, the unemployment rate drops and the Labor pool to fill them is shrinking.  Wages go up to attract and keep qualified Talent.  And the wage increases happen all through the Market, so all participants’ wages are going up as well.  This is where demand in the Market begins to reach the limits of the supply, forcing your value up.

Ah, but as the trends turn, they cause havoc in the Market.  As the demand for Labor falls due to a slowing or disrupted economic activity, layoffs ensue, the pool of unemployed talent rises, and producers can get equivalent talent now, but at lower pay.

Last month, we reviewed economic data for 2020 and forecasts for 2021.  The February tranche of data has forecasts still on the optimistic side.  The growth they foresee will absorb more Talent and the unemployment rate will fall.  Those that continue to learn and improve the depth and breadth of their Talent will see their security and value in the Market rise.

So What?

You compete in a market for a job.  Supply & demand are the macro determinants of your value in the labor market.  There’s no magic or government pill to keep supply in balance with labor demand.  There is only you, and how you develop and grow as an individual, and how you obtain new talents in pursuit of a goal.  If it is not working out, or you are unemployed, you are the one that must work your way out of it.  Be agile.  Accept major changes as fun challenges.  Often you must be open to ‘labor mobility’ and move geographically, change your vocation or deeply sharpen your skillset so you rise to the top of the growing pool of the unemployed.  It’s every individual’s call as to their own development as a person and how they prioritize the development of necessary talents.  Make your call.  Know why you make those calls at that time.  Then the trade-offs or sacrifices you had to make won’t come back as regrets in your future. 

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