NC State Economist Dr. Mike Walden – Job Churning
If economic forecasters are correct, we will see over 2 million jobs created in the country this year. But, as N.C. State University economist Mike Walden explains, this doesn’t mean all existing jobs will stay in place and we will simply add 2 million to the total.
“I think most people understand that. We’re always going to have some jobs destroyed, even in the best of times, (and) some jobs added. So I think the question is, really, if you’re going to have a net increase of 2 million, how many total jobs changed hands, so to speak, during the year? And that’s a very good question.
“If you look at the research on this, about 8 percent of all jobs turn over, either added or cut, during the course of a year. So what that means, for example, just to continue with our example, if we had 2million net new jobs created in the country this year, that would likely result from 6 million new hires, but 4 million firings.
“So what this means is even in the best of times, because we have a very dynamic economy, we’re always going to have a worker somewhere who’s getting pink slips. So even if the economy is booming, there are always going to be people out there who have lost their job, and obviously they don’t feel the economy is booming. We simply have a great turnover of jobs all the time in our country.”