Maximum employment? What it means post-pandemic may have changed already

WASHINGTON (Feb 1) - The U.S. unemployment rate hit a record low of 3.5% a year ago, but that bit of history comes with a footnote.

It arguably was not the best overall time for workers in recent decades. That honor goes to the final months of 2000. Even though unemployment rates were a bit higher, wage growth was stronger and a significantly larger share of the population was either in a job or looking for one.

It was a particular moment, with a younger population and women still ramping up their engagement in the U.S. job market, and it is unlikely to be repeated in a country that is graying by the year.

As the effort gets underway to repair the hole carved in the job market by the coronavirus pandemic, understanding the differences between those two eras - one good, one even better - may be key to choosing the best policies to fix the damage and then judging when the task is complete.

“It is going to take a long time to get back to 2000, to the absolute best situation, if ever,” said Roberto Perli, an economist with consulting firm Cornerstone Macro. “It might be impossible,” thanks to a population skewing older and thus towards a lower share of people wanting to work.

Reuters