The most recent statistics from the labor markets show many things happening simultaneously. This first is that small businesses, the main driver of employment in our country, have for the most part stopped hiring.
Current surveys show that the portion of small business owners who expect to expand their workforces in the near future is below 50% for the second month in a row. The last time it was this low was in June of 2020 back in the early stages of the pandemic.
Larger companies began lay-offs in late 2022 as the economy started slowing down. Tech companies took the lead shedding somewhere between 5% to 15% of their workforces.
Those lay-offs have continued and we now find ourselves in a sort of no man’s land.
Is the labor market good? Is it bad? It’s actually somewhere in the middle.
This point of ceteris paribus has also had an effect on the virtual workplace. Since the beginning of the year, the return to an in-office setting has actually stalled.
At the beginning of the year, 49% of employers required workers to be present in the workplace. That number has now decreased to 42%.
As the labor market has softened, employers have become more lenient. That really doesn’t make much sense, does it?
Most would think it would go in the other direction; that as labor markets softened, employers would gain leverage and be able to make more demands. But a strange thing happened.
The first round of lay-offs eliminated most of the new hires and other workers that were less productive. Now employers are more concerned about keeping the remaining, more productive workers, so they’ve actually become more lenient.
This is probably only temporary. As the economy worsens, this current dynamic will probably fade.
This is just more strange news from the land of limbo.
Let me leave you with this.
The crisis on our southern border and expiration of Title 42 has been all over the news for the past couple of weeks. What no one is talking about is the fact that America is one of the last affluent nations that doesn’t welcome migrant workers.
Think about it. We’re in a tough labor market, and we’re trying to keep people out. Doing so does nothing but create worker shortages and raise the cost of labor.
Other countries that historically shunned new workers have begun welcoming them with open arms. Countries from Germany to South Korea have opened their borders to deal with labor shortages to help their economies.
Why? Because the number of native workers in most industrialized nations is decreasing as populations get older and birth rates decline. With this decline, there are less workers to handle the physical jobs that keep an economy rolling.
We can only hope that our elected officials will come to a reasonable solution that will lead our nation into the future.
We’re all going to get through this. Let’s get through it together.
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