Despite Strong Labor Market Americans Are Still Struggling to Get Jobs; Here’s Why
Explaining the current situation of the American economy is pretty difficult. If you were to take a look at the traditional measures, then you would see that the U.S. labor market is incredibly strong and the same can be said about the overall economy. Reports say that the economy has added more than three million jobs in 2023 and the unemployment rate has plummeted below 4% in two years. Then why is it that Americans are still finding it very difficult to get a job? The last couple of years have been onerous for workers, to say the least. Wages have been up and unemployment has been low. Then, why is it that the national metrics are saying otherwise?
For starters, the job market is profoundly different depending on the industry you are in. For example, there is no doubt that employees are flowing in sectors such as healthcare and hospitality. However, you can still see slower hiring in white-collar jobs. The uneven growth from sector to sector has been a matter of concern for many economists and financial experts. "That’s unusual and it’s not what you’d necessarily associate with a strong, vibrant U.S. economy," said James Knightley, chief international economist for Dutch bank ING.
"It does hint that the headline [numbers] may look very strong indeed, but that the details beneath it look less positive," Knightley added that this aggressive pace of hiring may not be sustainable. He also added how the rate of workers quitting their jobs has gone down as the workers are not getting other attractive offers.
"On the face of it, the headline numbers look fantastic," he said. "When you look at the composition, it paints a less rosy picture." On top of this, many employees are worried about potential layoffs. "Hiring is slowing across the board," Brad Hershbein, senior economist at the W.E. Upjohn Institute for Employment Research said, via USA Today. This means that hiring is only soaring in a few industries.
Tech giants such as Google, Amazon, and Microsoft have announced thousands of layoffs in the last year and yet, the number of job cuts remains low as many companies are reluctant to let workers go. According to experts, the lay-off headlines that everybody is looking at these days, are not reflective of the broader labor market. Other economists believe that the losses are momentary. "The labor market isn’t falling apart," said Gregor Jarosch, an economist at Duke University. "It seems like a lot of the losses at the moment are concentrated in a few sectors, and maybe those people are particularly loud about it."
Meanwhile, there are people like Jenny Lustig who have decided to not go back to the corporate world after being laid off. She says that as a recruiter, she had the opportunity to see the job market in her industry very closely. Now she is opting to start her own business instead of applying for roles at other companies, as according to her, "The odds are very much stacked against you," via Market Watch. She believes that the companies are going to continue to do more things with fewer people. "I don’t expect it to change anytime soon," she added.
