‍Editor's Note: This report is based on survey data from July 2023 that was published in August 2023. This is the most recent data available. (Source: Bureau of Labor Statistics)

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The adjusted unemployment rate in the US, which has fluctuated between 3.4% and 3.7% since early 2022, essentially held steady at 3.5% last month

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In total, 7 states saw their unemployment rates reduce over the course of the month, which is down from 11 states the month before as the job market cools a bit. Pennsylvania saw the largest drop at minus 0.3%, followed by Louisiana, Maryland, Virginia, and Washington state at minus 0.2% each, and Massachusetts and Vermont at minus 0.1%.

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Arizona and Wisconsin actually registered small increases in their unemployment rates of 0.1% apiece, while the remaining states were stable for the most part.

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Below is the breakdown of the Bureau of Labor Statistics’ (BLS) market employment summary for August 2023.

States With the Highest Unemployment Rates

For half a year now, Nevada has been at the top of the list of states with the highest unemployment rates, though its rate has dropped by a tenth of a percentage point over the last month, going from 5.4% to 5.3% as of the most recent data. 

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Besides Washington DC at 5%, only 2 states other than Nevada had unemployment rates higher than the national average - California at 4.6% and Texas at 4.1%.

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In the last 12 months, 5 states plus Washington DC saw an increase in unemployment, led by DC at plus 0.9%, California at 0.8%, and New Jersey at 0.7%. 

States With The Lowest Unemployment Rates

New Hampshire separated itself from the crowd and once again claimed sole ownership of the lowest unemployment rate in the country, down a tenth of a point to 1. 7%, followed by Maryland and Vermont at 1.8% apiece, then South Dakota, which had tied New Hampshire at the top of the list last month, now at 1.9%.

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20 states in total registered unemployment rates lower than the national average. 

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Over the previous 12 months, 23 states saw their unemployment rates go down, led by Maryland at minus 1.4%, followed by Massachusetts at minus 1.2%.

States With New Job Losses

No states reported statistically significant job losses last month.

States With New Job Gains

Payrolls increased on net in 4 states last month, while the remaining 46 states plus Washington DC saw little changed. Florida gained about 45 thousand jobs, Indiana added about 14 thousand jobs, Hawaii reported about 5 thousand new jobs, and Vermont saw the employment ranks of in-state companies climb by about plus 3 thousand. 

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In terms of relative growth, however, Vermont actually saw the biggest total increase at plus 0.9%, followed by Hawaii at plus 0.8%, Florida at plus 0.5%, and Indiana at plus 0.4%. 

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In the last 12 months, Nevada has registered the largest percentage increase at plus 3.8%, followed by Texas at plus 3.3%, and Florida at plus 3.2%, while Texas, California, and Florida saw the largest number of jobs added in terms of raw figures, with their payroll additions ranging from about 300 thousand to about 450 thousand over the year. 

Mployer Advisor’s Take: 

Consistency remains one of the underlying themes in these reports, even as the job market finally starts cooling as intended by the Federal Reserve through its interest rate hiking campaign, which it has been implementing pretty consistently for almost a year and a half now. 

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After a brief reprieve during June, the Federal Reserve Board of Governors resumed that campaign at the end of July with another quarter point rate hike. 

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The softening of the labor market coincides with inflation of 3.2% over the last 12 months, which is looking much better than it had been through much of the last year, despite ticking back up last month by about two-tenths of a point.

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With that 3.2% inflation figure still above the Fed’s previously declared target of 2% and moving in the wrong direction even if ever so slightly, it remains a very real possibility that another quarter point rate hike is in store when the Fed meets again next month, which is a possibility that Fed Chairman Jerome Powell indicated was very much on the table when announcing last month’s rate hike. 

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Still, with rates already above anything we’ve seen in the US in more than 2 decades, however, there is plenty of reason to believe that another pause to the larger rate-hiking campaign will be in order before the Fed then moves on to determining whether another hike is merited in either or both of the two final meetings of the calendar year, set to conclude at beginning of November and in the middle of December, respectively.

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In the meantime, albeit subject to change, economic signals continue lining up in favor of the Fed’s sought-after soft landing in which inflation is tamped out without necessitating, or inducing for that matter, recession. 

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Looking for more exclusive content? Check out the Mployer Advisor blog.

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August is National Breastfeeding Month in the US and the US Department of Labor announced a new nationwide campaign to increase awareness about the challenges faced by nursing workers in trying to express breast milk during work hours. 

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This campaign from the DOL has been named “Power to Pump” and is being helmed by the department’s Wage and Hour division. The aim of the campaign is to build awareness about the relevant issues and accommodations involved via the allocation of significant resources across a variety of community organizations throughout the country, including the distribution of information cards containing key points of the Nursing Mothers Act and compliance guidelines to help employers better navigate the requirements of the Pump Act.

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The Pump act was enacted at the close of 2022, significantly building upon the foundational protections for nursing employees that were established in the Fair Labor Standards Act and expanding those protections to include workers in industries like agriculture, service and hospitality, transportation, and education. Under the Pump Act, for a period of at least 1 year following the birth of a baby, employers are required to provide applicable employees both work breaks and privacy sufficient to express breast milk while on the job. The Pump Act also outlines the remedies available to employees if the rights provided to them under the Pump Act are violated by their employer.

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The Power to Pump campaign is primarily focusing its outreach efforts on employers and employees who have recently or will soon become parents, as well as any workers that are particularly vulnerable and/or work in the industries that will be most impacted by the new rules - the industries that will require the most change and effort on the part of employers in order to meet accommodation expectations. Some of this outreach will be accomplished through webinars organized and hosted by the DOL Wage and Hour Division that are designed to ensure that all companies and employees alike understand the underlying mandates as well as the consequences for employers who fall short. 

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For the large number of women that return to their job within a year after giving birth - many of whom will be expressing milk throughout the entirety of that timeframe - not only does the Pump Act fill a crucial role in making that return to the workforce possible in the first place, but the peace of mind that comes with knowing that privacy and breaks will be available when needed also reduces stress and improves health at a time when reduced stress and bodily recovery are often most necessary. 

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Any employee or employer seeking clarification about compliance issues or assistance in compliance enforcement can contact a confidential, toll-free helpline at 866-4US-WAGE (866-487-9243). Non-native English speakers who call the helpline will have the option of more than 200 other languages from which to choose.

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You can read more about the Power to Pump Campaign as well as the relevant laws, in addition to the Department of Labor's other related efforts to provide protections and accommodations for nursing employees here. 

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Before the onset of the pandemic, only about 7% of US workers with jobs that were compatible with remote work were working full time off-site, but by October of 2022, that percentage was up to 55%. 

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At that point in the fall of 2022, about 2 and a half to 3 years since the pandemic had begun and about 1 year after the rollout of the first vaccines, more than half of all remote-capable employees were doing their job from an off-site location, which seemed like an indication that remote work had established itself as a major and permanent fixture in the business operational landscape.

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In the time since, however, the percentage of remote-capable workers who are still working remotely full time has been falling fairly consistently and is now down to just 35%, meaning that nearly 2 out of every 3 workers who currently have a job that could be done remotely full-time are instead working on-location at an office or company worksite at least part-time, and that number seems likely to grow.

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For one, many employees who have worked an entirely remote schedule have acknowledged some of the perceived disadvantages of doing so, including lost opportunities for networking, collaborating, mentoring, and general career growth. That said, the benefits of working remotely are clearly substantial as well, with remote workers saving millions of hours of commute time as well as the accompanying expenses, as one example. Still, given the choice, many employees will opt for a hybrid-schedule that gives them a best-of-both-worlds arrangement over strictly on-site or strictly remote work.

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Despite the common preference among employees for doing at least some portion of their work on-site, however, remote work has become so interwoven into the fabric of business culture that companies at this point expect to face major employee pushback for abrupt changes to remote work policies and expectations.

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Even in the face of employee protestation, of course, many businesses have made significant pushes to get employees back into the office, which have returned mixed results. Further complicating the matter is the fact that there are differences of opinion as to whether remote employees are more productive or less productive than their on-site counterparts, with one recent study finding that remote data entry employees were 18% less productive that their onsite peers while a separate study out of Stanford determined that productivity was 13% better among the remote worker set, for example. 

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Also, the cost-benefit analyses surrounding remote work aren’t always so cut and dried, with one case study of a Fortune 500 firm noting that engineers working on site got more than 20% more feedback than remote workers filling similar roles, but the on-site workers also wrote a little more than 20% less code per month than those working remotely, so the trade-offs involved in crafting an optimized arrangement from the perspectives of both employers and employees aren’t exactly intuitive.

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Despite some of the uncertainties about how the advantages and disadvantages of remote work stack up, however, there is fairly clear consensus in favor of minimizing remote work among many employers and certainly those with an interest in commercial real estate, which has a role in the continuing push to get more employees back to the offices and on-site workplaces, as well.

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Given the forces at play, the trend toward back-to-office pushes seems likely to continue, although the changes will probably be more gradual and incremental to avoid the abrupt shifts and culture shock that appear correlated to the degree of employee pushback in response, especially in light of employee openness to hybrid schedules. 

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The operative question then becomes, where will remote work find its equilibrium as a stable proportion of total jobs, and the reality is that answer will likely vary considerably from industry to industry and company to company. Given the potential range of advantages that can be gained by both employees and employers, harnessing maximum schedule flexibility within the constraints and considerations specific to the relevant team, company, and/or line of work is likely the target for which most employers will be aiming. 

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In the meantime, with even video-conferencing platform pioneer Zoom currently in the process of bringing more workers back to the office, the proportion of remote work being conducted off-site will likely continue to gradually fall until that balance is found.

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You can read more about this topic here.

According to this recent article from Bizwomen, US companies are anticipating that they will be offering a 3.8% pay increase on average in 2024.

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This projected figure of 3.8% represents a slight decrease relative to the 4% average pay increase registered in 2023 so far. That said, 3.8% was also the projected pay increase for 2023 at the outset of the year, but the labor-favoring job market and competition for talent among companies has led to larger pay increases than were previously anticipated.

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In total, while nearly 8 out of 10 (78%) employers are expecting their budgeted salaries to increase or remain essentially unchanged through 2024, the remaining 22% of employers are planning to decrease their salaries next year, which is more than double the proportion of employers who anticipated decreasing salaries in 2023 (9%).

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Among companies that are increasing their salary budgets, nearly 2 out of 3 (65%) list the competitive labor market as their motivation for upping employee pay, although many of these businesses are expecting to issue smaller pay increases than in 2023. In fact, the outsized raise in 2023 is part of the justification many of these companies are citing to employees to explain the smaller pay bump planned for next year, alongside concerns about economic downturn on the horizon. 

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In light of inflation forecasts and demand persistently outpacing supply for a number of specialized skills in the labor market, many experts predict that average annual pay increases will likely remain between 3.5% and 4% in general for the foreseeable future, which is a higher range than was common prior to the onset of the pandemic. That said, with the job market finally softening a bit, employees are also becoming more wary of imbalance in pay relative to the value of their skills and contributions as it pertains to job security, which helps keep the range of average pay increases from over-inflating further. For example, median wage growth in the Spring of 2023 was at 5.6%, down from the year before when it peaked at 6.7%, which is a good sign for those rooting for wages to grow at a more moderate pace despite the fact that median wage growth is still significantly higher than the 3% to 4% median growth registered before the pandemic.

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The number of job openings has become relatively stable at about 9.6 million as of June 2023, and with layoffs holding steady and the number of job quitters dropping, it appears that the job market may have hit an equilibrium in line with the “soft landing” for which the Federal Reserve has been aiming with its rate hiking campaign, which is great news for employers and employees alike. Accordingly, the number of economists and forecasters predicting recession in the next year has dropped considerably, and most of those who are still calling for an economic downturn of some sort now forecast a shorter duration and less severity.

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In sum, there are a lot of indicators suggesting that the current wage stability may be sustainable, which combined with stabilizing prices and an inflation rate that is now lower than historical averages, adds up to greatly reduced risk of a wage and price spiral. While workers finding new jobs can still expect a bump in their pay rate, that bump is considerably smaller than it was just last year, and the job market and pay increases seem like they may be relaxing into a new normal. 

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You can read more about this topic here.

Artificial intelligence has become increasingly enmeshed in a growing number of industries, and the insurance and employee benefits spaces are clearly no exceptions to the rule. 

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There are already many business functions across numerous fields that largely depend on AI and machine learning platforms, thus rendering these technologies as essentially critical infrastructure, even when little to no human oversight is involved. 

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Further, given the trends of how quickly these technologies are both evolving and being adopted, it’s reasonable to assume that barring some unforeseen intervention, business operations will become even more AI-dependent going forward into the future.

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With those considerations in mind when looking at the bigger picture, even though artificial intelligence is practically ubiquitous in many arenas already, we are likely still in the very early stages of the ultimate AI development timeline. As a result, there remain both many novel ways to put these technologies to use as they exist today that have not yet been explored, as well as many potential pitfalls that have yet to be experienced and for which there are no warnings. 

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In light of both the opportunity and the risks involved with staying on the cutting edge of artificial intelligence, and the importance of doing so in order to keep up with the competition, it may be wise to keep an eye on what’s happening with AI across a variety of industries in order to learn vicarious lessons and adopt/implement analogous uses for the technology from one industry or business process to another. 

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To those ends, this recent piece from author and data advisor Bernard Marr pulls together a collection of tips that’s worth taking a look at on how to avoid common AI-implementation mistakes that different types of companies are making for often very similar reasons:

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• Clearly define your objectives. In order to best address the problems that it is tasked with solving, AI must have clearly drawn parameters and guidelines for evaluating success, otherwise the bulk of the potential advantages that AI offers are largely wasted.
• Implement a change management strategy alongside AI adoption. Recognize in advance that incorporating AI platforms into your business process often creates concerns about learning curves and/or job security among employees that lead to pushback and low adoption rates. These issues can be countered with well-conceived and executed change management efforts that better frame the benefits of AI adoption in employee-centric terms.
• Manage AI capability expectations. Although artificial intelligence and machine learning are very powerful tools, their abilities are not without limitation and often depend on human input, both for the collection of data and execution of strategy, which provides additional opportunities for error.
• Test AI systems: Inaccuracies and system errors are the probable result of a failure to adequately test and validate artificial intelligence system operations for accuracy and reliability.
• Don’t overlook ethics and privacy issues. There’s a particularly sensitive lawsuit vulnerability when it comes to both privacy and ethical issues, which can be exacerbated when AI is involved. Further, the conclusions drawn from AI are only as good as the information on which those concussions are based, which means that bias in data and/or human-conceived process can be perpetuated through AI systems if not properly addressed. 
• Ensure adequate talent is in place to manage AI operations. Optimizing the implementation of artificial intelligence while maximizing results and minimizing disruption requires a specific skill set and knowledge base that are not easily learned on the fly. It is advisable to work with outside consultants that have experience in your field at least until internal staff with the necessary skills and experience have been trained and/or hired.
• Don’t ignore data strategy. Information is the lifeblood that drives artificial intelligence, so if that data isn’t clean, organized, and accessible, then the quality of the output generated by AI in return will be diminished. 
• Don’t underestimate costs. Properly implementing artificial intelligence requires investments not just in technology, but also in talent and in the underlying company infrastructure beyond just what’s required to host the new AI platform. Failing to properly budget sufficiently for all of these necessary expenditures often results in an underfunded effort that does not meet its goals. 
• Don’t Approach AI implementation like a one-off event. As these technologies continue to evolve, businesses that treat the launch and implementation of artificial intelligence as a singular occurrence will soon see their platforms become obsolete and fall behind those companies that understand the AI launch is just the first phase of an ongoing project. 
• Plan for scale. Even if your company’s initial ventures into the artificial intelligence space are relatively small in scope, it’s still a good idea to consider growth on the front end to ensure that no bottlenecks inhibiting platform expansion in the future are built into the system inadvertently. 

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You can read more about this topic here. 

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In the final week of July, a joint effort between the Treasury Department, Department of Labor, and Department of Health and Human Services produced some analysis and guidance to help companies comply with the Mental Health Parity and Addiction Equity Act (MHPAEA).

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While these proposed regulations crafted in support of the MHPAEA are still in flux and will likely evolve some in response to the stakeholder feedback and comments that will be collected over the coming months, the guidance in its current form reveals a great deal about the regulators’ intent, focus, and framework for addressing these issues, much of which will likely carry over to the final rule.

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One of the main thrusts of the guidance as it stands is improving employee access to treatment for mental health and substance abuse. It’s clear the interdepartmental group tasked with creating these regulatory guidelines identified access issues as a key barrier to current mental health care delivery, especially in the wake of the pandemic, which exacerbated these issues for many Americans.

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The guidance-producing body also focused its efforts on ensuring that those mental health and substance abuse treatment options are comparable in availability and quality of care for all employees. The proposed regulations include a new rule that should help ensure there will be a sufficient number of providers within each plan’s network - a hugely important factor in terms of access to care, which can also be severely impacted in a negative way by low-reimbursement rates combined with demand that outpaces supply. Regulators are particularly interested in hearing public comment about these particular issues in order to devise a minimally intrusive, optimized-parity-achieving system. 

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Further, in order to better evaluate access and parity issues with regard to mental health care and substance abuse facilities from a macro perspective, the new guidelines emphasize the importance of employers’ obligation to produce satisfactory Nonquantitative Treatment Limitation (NQTL) comparative analysis reports. A lack of data about access and parity has hindered many an analysis and regulatory response in the past, which is why the new rules mandate plans and issuers gather and assess relevant information before imposing any NQTLs, including minimum data collection requirements as well as standards for when and how that data must be submitted. 

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The new rules will also likely include definitions and guidance to help better address areas that need special attention, including Applied Behavior Analysis (ABA) Therapy, which has historically encountered treatment limitations in some plans (a practice that will now be prohibited) even though ABA is one of the main forms of treatment for people on the autism spectrum. 

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While the proposed regulations have yet to be formalized, and can not in fact be adopted prior to the public and stakeholder comment period, given how closely the final rules will likely mimic the announced guidelines, employers would be wise to begin working with advisors and subject matter experts in order to ensure their compliance with the ultimate regulations, especially when it comes to network provider provisions. 

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You can read more about this topic here.