If you’re hoping to get a big raise soon, you may be kept waiting. The reason? Americans re-entering the working world could hold down pay rates. Companies are taking on an increasing share of people from outside the workforce (as in, people who haven’t been regularly applying for jobs), while a declining share of new hires are previously unemployed people who have been actively looking for work, according to data from the Bureau of Labor Statistics.
It’s hard to tell why more hires come from outside of the labor force, Bank of America Merill Lynch economist Emanuella Enenajor wrote in a note last week — the figures don’t distinguish between former workers re-entering the labor pool and recent college graduates gaining their first jobs, for instance.
What is clear, displayed in the Bank of America graphic below, is that a shift is under way. Though the unemployed were nabbing an elevated portion of new positions right after the recession, new entrants into the workforce are now getting the upper hand.
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