Summer Break, Summertime Sadness, or Chasing Rainbows? Job Market Update: June-July 2023
August 9th, 2023
SUMMARY / KEY TAKEAWAYS
- The job market is the constant process of change, due to major shifts in the world economy and technological progression.
- In this collection of recent, relevant news, we look at different new trends in jobs that show how companies, workers, and the economy all connect.
Table of Contents
Introduction: News & Trends in the Job Market.
The job market is the constant process of change, due to major shifts in the world economy and technological progression. In this collection of recent, relevant news, we look at different new trends in jobs that show how companies, workers, and the economy all connect.
1. Here’s How Workers Use Side Gigs to Make Ends Meet While Unemployed.
The increasing prevalence of side jobs among American workers is driven by the need to cope with inflation and bridge income gaps during periods of unemployment.
According to a survey by LendingTree, 44% of Americans reported having a secondary source of income, a significant increase from 13% in 2020. Workers in the online platform economy, such as those engaged with Airbnb, Uber, or TaskRabbit, were found to be more likely to receive unemployment benefits than those relying solely on wages, based on a study of IRS data from 2009 to 2016. This type of gig work helps individuals smooth their income during periods of job loss and provides them with flexibility while they search for permanent employment.
In addition to side hustles, there are other financial strategies that can help individuals weather income disruptions. It is advisable to gradually save at least three months’ worth of expenses to provide a financial safety net. Furthermore, individuals should promptly apply for unemployment benefits, explore healthcare options, and review their retirement plans after a layoff.
Assessing one’s budget and considering a side gig can also contribute to financial stability during challenging times. Certified financial planner Lazetta Rainey Braxton emphasizes the importance of recognizing oneself as the greatest asset and suggests filtering job searches according to skills and interests for a better fit. It is crucial to consider factors such as startup costs, payment timelines, and potential effects on unemployment benefits before committing to a side job.
To effectively manage primary and side gigs, individuals should leverage their skills in a sustainable and productive manner. Additional income can be used to achieve personal goals, build emergency savings, or create cushion accounts. Braxton advises being mindful of how time and resources are allocated and making wise decisions regarding the generated income. Ultimately, the key is to be clear about priorities and utilize time and capacity efficiently to maximize the benefits of side gigs.
2. The Workers Already Replaced by Artificial Intelligence.
The introduction of Artificial Intelligence (AI) systems in various industries is raising concerns about job security. Dean Meadowcroft, a former copywriter, experienced this firsthand when his company implemented an AI system to assist with content creation. While the AI could produce content quickly, it lacked the creativity and individuality of human writers. Shortly after the AI’s introduction, Mr. Meadowcroft and his team were laid off, leading him to realize the impact of AI on his job.
Reports suggest that AI has the potential to replace a significant number of jobs, with administrative and legal professions being particularly susceptible. However, there is also recognition that AI can enhance productivity, create new job opportunities, and provide human-led content in a more efficient manner.
The fear of being replaced by AI is prevalent among workers, especially those in frontline positions. A survey conducted by Boston Consulting Group (BCG) found that a third of the 12,000 workers surveyed were worried about being replaced by AI. Frontline staff expressed greater concerns than managers, likely due to their limited exposure and familiarity with the technology. While AI adoption can bring benefits, such as improved efficiency and cost savings, its potential to disrupt traditional job roles is causing anxiety and uncertainty.
The impact of AI on specific professions is already being felt. Alejandro Graue, a voiceover artist, discovered that an AI-generated voice had replaced his work on a popular YouTube channel. The decision to experiment with AI was driven by cost and time considerations, but the poor quality of the AI-generated voice led to viewer complaints and the removal of those videos. However, Graue remains concerned about the future of his profession and the possibility of further AI advancements that could threaten his livelihood.
Despite the potential job displacement caused by AI, some individuals are finding opportunities to work alongside AI systems. Dean Meadowcroft, for example, now works for an employee assistance provider, where he collaborates with AI to deliver wellbeing and mental health advice. He believes that the future lies in using AI to provide quick access to human-led content rather than completely replacing human involvement. This suggests that AI may be more effective as a tool for enhancing human capabilities rather than as a complete substitute for human workers.
3. Self-employment Hasn’t Recovered from Pandemic Shock. Why the ‘hangover’ Persists.
The aftermath of the COVID-19 pandemic and the slow recovery have brought renewed hardships for Canadian small business owners. Ryan Dunne, the owner of Winchester Catering and Events, recalls the impact of lockdowns and gathering restrictions on his business. Despite putting most of their savings into the business, Dunne and his family managed to survive by adapting their operations, taking on debt, and pivoting to cater corporate events. However, challenges persist, with weddings now hosting fewer guests, outstanding debts, and the looming renewal of their mortgage with higher interest rates. Dunne’s experience reflects the struggles faced by many small businesses in Canada.
The latest Labor Force Survey from Statistics Canada reveals a significant drop in self-employment positions in May, the largest decline since the early days of the pandemic. Benjamin Reitzes from BMO suggests that Canada’s tight labor market, characterized by low unemployment and a high number of vacancies in the private sector, may deter individuals from pursuing self-employment opportunities.
The decline in self-employment is concerning, as small businesses play a crucial role in the Canadian economy. The Canadian Federation of Independent Business (CFIB) emphasizes the need for support for small and medium-sized businesses, including debt relief and policies that create a favorable environment for entrepreneurship.
Simon Gaudreault, chief economist of CFIB, highlights the importance of self-employed individuals and entrepreneurs for economic growth. While some may turn to self-employment during recessions, others thrive in periods of economic booms. Gaudreault urges the government to focus on supporting small and medium-sized businesses rather than solely attracting large foreign companies to Canada. Small businesses, burdened by debt and struggling to recover pre-pandemic revenue levels, require more targeted government assistance. Despite the challenges ahead, small business owners like Dunne remain resilient, hoping for recognition of the impact of the shutdowns and relief measures that address their specific needs.
4. Employers Mainly Recruit Through Vacancies on Social Media.
According to a survey conducted by UWV (Employee Insurance Agency) in the Netherlands, employers primarily rely on social media for recruitment, with 78% of respondents distributing vacancies through platforms like Facebook, LinkedIn, and Instagram. Posting job openings on their own websites (74%) and recruiting through their own staff (71%) are also common methods used by employers.
LinkedIn is the preferred platform for direct candidate approaches, with 23% of employers opting for it compared to 18% for Facebook. The choice of recruitment method varies based on the required education level, with low-skilled workers often being recruited through existing staff and vacancies for highly educated individuals being shared on LinkedIn.
The survey included 4,500 employers from various sectors, and the results highlight the importance of aligning recruitment methods with the target audience. By understanding the characteristics and preferences of job seekers, employers can increase their chances of attracting suitable candidates.
Job seekers are advised to be aware of how employers recruit staff to enhance their job search strategies accordingly. The UWV offers resources and tips on finding employment on the werk.nl website, and employers can seek support and advice from the employer service point in their region.
5. Florida Has More Jobs than New York for the First Time Ever — Here’s Why the Trend of Americans Heading South Isn’t Slowing Anytime Soon.
Florida has surpassed New York as the state with the most jobs, according to a report by the Bureau of Labor Statistics. Over 400,000 people moved to Florida between 2021 and 2022, with a significant portion of the new residents being young people.
Remote working during the pandemic played a major role in driving this migration, as individuals sought a warmer climate and a better quality of life. Additionally, Florida’s appeal is not limited to former New Yorkers; the state has seen a surge in the formation of new businesses and a decrease in unemployment, making it an attractive destination for job seekers.
Florida’s population has experienced significant growth, becoming the fastest-growing state since 1957. The state’s population reached 22.2 million residents in 2022, marking a year-over-year increase of 1.9%. Meanwhile, New York has seen a population decrease, with roughly 180,000 residents leaving the state.
The allure of Florida extends beyond retirees and snowbirds, as the tech and finance sectors have contributed to job opportunities and economic growth. Lower taxes, including no personal income tax, have also been a factor attracting individuals and businesses to the state.
While Florida’s growth is remarkable, the sustainability of its current rate of growth remains to be seen. Nonetheless, the state’s economic prospects and favorable conditions have positioned it as a leading destination for job seekers and businesses, while New York faces challenges in recovering its pre-pandemic job growth.
6. Teen Worker Shortage Alert: Small Businesses Struggle to Find Teen Workers in a Competitive Market.
Small and seasonal businesses may face a challenge in finding teen workers to fill roles during the summer hiring market. Outplacement firm Challenger Gray projected a slight decrease in the number of jobs gained by teens in 2023 compared to the previous year, reaching the lowest forecast since 2011.
While teens are returning to pre-pandemic employment levels, many of those willing to work are likely already in the workforce. The unemployment rate for teens aged 16 to 19 slightly increased to 11% in June, and the labor participation rate fell year on year, potentially resulting in fewer available workers for businesses heavily reliant on teen employees.
Grotto Pizza, a business with multiple locations in Delaware and Maryland, considers teens a critical part of their success, comprising almost one-third of their 1,100 workers. However, hiring manager Glenn Byrum acknowledges the challenges of teen hiring, as young workers have more job options during the summer and are highly aware of factors such as job flexibility, pay, and work environment. Byrum emphasized the importance of providing the best work environment to attract and retain teen workers who have the freedom to seek alternate employment if dissatisfied.
Small business owners, particularly in the restaurant sector, have been struggling with hiring and labor availability in the aftermath of the pandemic. The National Restaurant Association projects an addition of 500,000 jobs by the end of the year but has encountered a shortage of workers, with one job seeker for every two open positions.
For teens like Makiah Grindstaff, who works at Famous Toastery in North Carolina, having a job allows them to save for various goals, such as college expenses, driving costs, and personal expenses, while also enjoying financial independence.
7. Companies’ Strategies to Redefine Work Habits and Office Environments.
A report by the McKinsey Global Institute indicates that the return to the traditional five-day office workweek is facing resistance as employees prefer the hybrid model, working in the office for three days a week. The study reveals that office attendance has stabilized at 30% below pre-pandemic levels.
The demand for office space is expected to decrease by up to 20% by 2030, driven by remote and hybrid work, as well as automation and the trend towards more compact workspaces. Companies are now reconsidering their real estate strategies to align with new work habits and create spaces that meet employees’ needs for productivity and collaboration.
The shift in office culture has also influenced people’s residential choices. A survey conducted by McKinsey shows that 20% of respondents who moved after March 2020 did so because they could work from home more frequently. People have been relocating from expensive, office-centric areas to more affordable neighborhoods with mixed-use real estate.
The pandemic has changed shopping patterns as well, with remote and hybrid workers less likely to spend near the office. McKinsey suggests that retailers need to rethink their models as foot traffic and spending remain lower, particularly in office-dense neighborhoods, while online shopping continues to gain market share.
As a result, the report suggests the need for more mixed-use environments at the city level to create resilient communities that can adapt to evolving work and shopping patterns. The integration of physical and virtual offices is emphasized, along with the importance of providing spaces that support productivity and collaboration, as well as meeting equity for both in-person and remote participants.
You can read our article to become a productive employee whether you are working remotely or hybrid: https://ontologyofvalue.com/top-13-productivity-tips-for-remote-workers/
8. Rising Pay-checks Spark Inflation Anxiety to New Heights.
UK wages have surged at a record annual rate, raising concerns about prolonged high inflation. Official figures reveal that regular pay grew by 7.3% in the March to May period compared to the previous year, matching the highest growth rate from the previous month. Despite this substantial increase, pay rises continue to lag behind inflation, which is currently at 8.7%, well above the Bank of England’s target of 2%.
The central bank is closely monitoring the pace of wage growth as it tries to control inflation, but strong wage growth may lead to higher costs for companies and further price increases for goods. While pay is growing at record rates, it is still failing to keep up with rising prices, with regular pay falling by 0.8% after accounting for inflation. Economists suggest that the latest wage figures will not significantly ease the Bank of England’s inflation concerns.
The central bank recently raised interest rates by more than expected, increasing its key rate to 5% from 4.5%. Some experts believe that a further rate hike to 5.5% is likely, depending on next month’s inflation figures. Forecasts of additional rate increases by the Bank have contributed to higher mortgage costs, reaching their highest level in 15 years.
Additional data from the Office for National Statistics (ONS) revealed that regular pay growth in the private sector was the highest rate since the pandemic began, while the public sector saw its highest growth since late 2001. However, the unemployment rate rose to 4% in the March to May period, and job vacancies declined for the 12th consecutive time.
Although the labor market tightness is starting to ease, businesses continue to face difficulties in finding suitable workers. The government is now offering a “Midlife MOT” to help individuals in their mid-40s and above retrain and navigate their careers.
9. Breaking Barriers: Employment Among People with Disabilities Reaches Historic Highs.
The post-pandemic labor market rebound has had a significant positive impact on employment for people with disabilities in the United States. The Bureau of Labor Statistics (BLS) reported that the number of employed individuals with disabilities reached approximately 7.6 million in June, the highest level since June 2008.
The employment-to-population ratio for disabled individuals also hit a record high of 22.4%. Experts attribute these gains to a steady demand for labor, driven by workforce shortages in various sectors, as well as the decreasing stigma around remote work due to the pandemic. The remote-work boom has particularly benefited individuals with disabilities by removing barriers related to transportation and accessibility. Many disabled workers have long desired the flexibility that remote work offers, and it has opened up a broader range of job opportunities.
While data on specific industries or occupations is limited, historically, workers with disabilities have been concentrated in retail and manual labor roles. The growth of white-collar opportunities, especially during the initial hiring boom spurred by tech companies after the pandemic, has contributed to increased employment prospects for disabled individuals. However, there is still work to be done in reducing barriers and increasing labor force participation for people with disabilities.
Despite the positive trends, there are ongoing challenges. Disability advocates note that the disabled community is diverse and includes many individuals with “invisible” disabilities. The employment rate for disabled individuals still lags behind that of the general population, and the unemployment rate for people with disabilities remains significantly higher.
There are concerns that some employers may resist accommodating remote work requests, even after the pandemic, potentially limiting opportunities for disabled workers. While progress has been made, advocates emphasize the need for further efforts to improve employment outcomes for people with disabilities and increase their labor force participation.
10. Staffing Crisis at Binance: Layoffs Unfold Amidst Management Exodus.
Binance, the world’s largest cryptocurrency exchange, has reportedly laid off employees shortly after experiencing a wave of executive departures. The layoffs come at a time when the future of the crypto industry in the US market is uncertain due to regulatory crackdowns on activities deemed illegal.
The Wall Street Journal initially reported that over 1,000 people had been let go in recent weeks. Binance CEO Changpeng Zhao responded on Twitter, stating that while there were involuntary terminations as the company aims to increase talent density, the reported numbers were inaccurate, and Binance is still hiring.
Binance has been facing legal challenges, with the Securities and Exchange Commission (SEC) suing the exchange and CEO Zhao for alleged deceptive operations. Binance has asserted its intention to vigorously defend itself against these allegations. The SEC’s lawsuits against Binance and Coinbase reflect SEC Chair Gary Gensler‘s firm stance on the crypto industry.
However, a recent decision in favor of Ripple Labs indicates that the regulator faces difficulties in some cases. The applications for spot bitcoin exchange-traded funds (ETFs) from asset management giants BlackRock and Fidelity are viewed as a positive signal for the industry. Binance emphasized the need to enhance talent density across the organization in preparation for the next major bull cycle.
The spokesperson for Binance explained that as the company has grown from 30 to nearly 8,000 employees worldwide over the past six years, it is crucial to remain nimble and dynamic. Alongside the layoffs, Binance experienced a series of executive resignations, including its Chief Strategy Officer Patrick Hillmann. The developments at Binance reflect the challenging landscape faced by cryptocurrency exchanges amidst regulatory scrutiny and the need for strategic adjustments in the face of market dynamics.
11. Unraveling Job Market Signals Trouble for Bank of Canada.
Canada’s unemployment rate increased in June despite a significant rebound in job gains, according to Statistics Canada. The country added 60,000 jobs last month, with a gain of 110,000 new full-time positions, marking the largest employment increase since January. However, the unemployment rate rose to 5.4%, up from 5.2% in May, due to a growing labor pool resulting from high immigration rates.
Economists view these mixed signals as the Bank of Canada prepares for its upcoming interest rate decision, with expectations that the unemployment rate could reach 6.0% by year-end. While the job gains in June exceeded expectations, economists note that employment trends over the past three and six months indicate a slowdown in hiring. The decline in job vacancies suggests a potential easing of pressure in Canada’s labor market as businesses find the staff they need.
Additionally, year-over-year wage growth slowed to 4.2% in June, compared to 5.1% in May. The presence of more workers, driven by immigration, may help cool inflationary pressures by reducing wage competition among businesses. Deloitte forecasts a milder recession in the second half of 2023, projecting the unemployment rate to rise to 5.6% by the end of the year. The June jobs report serves as the final major economic data release before the Bank of Canada announces its interest rate decision.
Economists are divided on whether the central bank will proceed with a rate hike in July. While some believe the strong jobs report and low unemployment rate may sway the Bank of Canada towards an immediate hike, others argue for a “soft landing” approach, allowing the economy to slow and inflation to stabilize before further rate increases. The decision on interest rates will be closely watched as it has implications for Canada’s economic recovery and inflation outlook.
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Ontology of Value (August 9th, 2023). Summer Break, Summertime Sadness, or Chasing Rainbows? Job Market Update: June-July 2023. Retrieved from: https://ontologyofvalue.com/summer-break-summertime-sadness-or-chasing-rainbows-job-market-update-june-july-2023/
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