Employers Are Calling All Workers Off the Benches

(Bloomberg Opinion) -- As American society increasingly self-sorts itself into political tribes, there’s a growing and noteworthy exception to that trend: the labor market. A rising share of job growth is going to people who were not in the labor force. This climate forces employers to set aside historical practices and biases that may have excluded certain types of people from jobs. Political attitudes often follow the economy’s lead, raising the possibility that some ossified biases in U.S. culture could be the next to bend.

As reports of labor market shortages become more widespread, employers get more creative to attract and retain talent. Some relax dress codes, make scheduling more employee-friendly, or increase benefits like paid time off or continuing education. Others increase pay.

Employers are also casting a wider net by taking a chance on teenagers for jobs that typically have gone to adults, or by looking past criminal records for applicants. A tighter labor market means all of a sudden drug testing might not be mandatory for many jobs in which off-hours recreational drug use is irrelevant. A labor shortage in the male-dominated construction industry can lead to recruiting efforts for women. The gap between the black unemployment rate and the overall unemployment rate has fallen to a record low this year, implying some improvement in employment racial equality.

These standards now being relaxed were built up over years, accelerated by the mass unemployment brought about by the great recession. When the unemployment rate is 10 percent, employers have the luxury of deciding only to hire prime-age workers with college degrees with no criminal record who can pass a drug test and who will relocate to New York or San Francisco. For older and younger applicants, for those with a criminal record, for those unable to relocate — it could feel like the labor market had built walls built to keep them out.

But now the walls are coming down. On one major issue, the walls are falling in culture as well: Americans are warming to immigration.

Geographically, rural areas and the agricultural sector are feeling the hurt of labor shortages more than most. It’s no coincidence that Americans have the most favorable attitude toward immigration that we’ve seen in years. The recent low point was in the depths of the great recession, when jobs felt scarce. Now workers are scarce.

This divergence between the labor market needs of the economy and the populist right’s anti-immigrant rhetoric may be the most important trend to watch for the remainder of this economic expansion. As much as President Donald Trump has seemed to double down on his nationalist vision for America, counting on the loyalty of his base to back him up, his Treasury secretary, Steven Mnuchin, has said government is a “mark-to-market business,” implying that ultimately the stock market and the performance of the economy will dictate how the administration is doing.

For the time being, job growth remains robust, and employers are doing what they have to do to attract and retain talent by bringing marginalized Americans into the workforce. But on the current trajectory, demand for workers simply outstrips what the U.S. population can meet. The one remaining wall that hinders the economy may be the one the Trump has pledged to build.

©2018 Bloomberg L.P.