Labor Trends

Susan Jung |

I was driving this week in the Central Valley and noticed businesses shutting down and spaces for lease. Next to several businesses that have closed were signs advertising open positions. It's interesting to see side-by-side the trends in labor and business. The businesses that were closing were large retail outlets and the businesses that were hiring included delivery service companies.

It is true that the unemployment rate in the United States is very low and at multi-decade low levels. It is also true that many companies cannot find qualified candidates to fill positions. The jobs that often go unfilled are for highly skilled workers and  those that have a particular expertise. The demand for these types of workers underscores the importance of higher education and just why the future of any economy is dependent upon educating its population to compete in the global economy.

The trends by industry are interesting. A recent Bureau of Labor Statistics report highlighted by industry current employment trends. You can read that report here:

The press recently has highlighted current student loan levels and the high price of education. With trillions of dollars of student debt outstanding, one can see why this is a challenging problem for graduates. Going forward, the question remains as to how the United States will educate its workforce to compete in the global economy while at the same time not burdening students with excessive debt levels. It's a major problem that needs a solution.

When we analyze companies, one factor we consider are long-term trends that impact a company's products and services demand levels. This includes the ability to compete with a skilled workforce in a competitive environment. We also carefully examine fundamental shifts in business trends such as the erosion of popularity for brick-and-mortar retail stores. Likewise, the rising demand for logistics support and delivery services is a related development due to a shift in retail purchasing preferences.

In short, we look at businesses that will win in the future and have trends or demographics on their side. We call these industries “tailwind industries” and we tend to gravitate towards this type of business.

If you have any questions about this information, please let us know. Happy to help!

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