Thursday, July 7, 2022
Yesterday a Los Angeles Times headline read: “Are widespread layoffs coming? How the pandemic has changed employers’ recession strategy.” While some businesses are facing a recession by laying people off, others are struggling to keep their employees while cutting back other expenses. The companies cited in the article are relatively small: a restaurant owner in Madison, Wisconsin, with 180 workers, a Modesto, California, container plant with 164 people, and a bicycle importer with 70 people in New Jersey and 140 in South Carolina. Hopefully they will be able to keep their employees in the face of rising costs and falling demand.
One lesson from the last two pandemic years is that once trained employees are laid off, they don’t sit around waiting to be asked back. They may retire early, move out of state, move in with family, or find another way to make a living, but, one way or another, they have to move on. Then, when help wanted signs go back up in the high-rent areas, no one is there to answer.
Certainly the airlines are finding this out as they look for pilots, flight attendants, and maintenance crews. TSA is hiring. The Federal Aviation Administration is looking for air traffic control specialists. Airports are looking for support staff of all kinds. This summer has seen a huge influx of travelers, not because COVID is over, but the evidence that Omicron variants are less virulent has loosened the floodgates of pent-up demand. Like me. I’m “fully vaxed,” had a light case of COVID three weeks ago, and am flying to London in 10 days. At the same time, I understand that airport personnel in Europe are striking because of the impossible working conditions caused by a shortage of baggage handlers, check-in staff, security, cleaning staff, and ground crews. I will report back from Heathrow (assuming my flight isn’t canceled) and let you know what I find.
While it’s encouraging to think that some employers may be hiring or at least thinking twice about letting people go, layoffs are a grim reality in sectors hit directly by rising interest rates and inflation. For example, tech companies: Tesla, Coinbase, Netflix, Peloton, and Robinhood. And the real estate industry: Redfin, Compass, Zillow Offers. Mortgage companies, including Wells Fargo’s mortgage division and First Guaranty Mortgage Corp. These businesses are known to be cyclical, but the pandemic economy brought on rapid expansion which is now hitting a wall, as rising interest rates impact the affordability of houses which are still priced high.
Unfortunately, the job skills needed at Robinhood or Redfin are not necessarily transferable to the openings at Delta or LAX. Although, in some cases, you can find a new job by spreading the news about your layoff on social media, according to yesterday’s Wall Street Journal article: “The Career-Boosting Strategy of Announcing Your Layoff.” This report has several examples of people who announced their layoff on Twitter or LinkedIn and were contacted by interested employers. Apparently in some high-tech jobs, skills are transferable. Worth a try, but I wouldn’t count on it.
The job market has a lot of moving parts and they are not moving in synch. We have not yet recovered the number of jobs that we had just before the pandemic. The graph below from the St. Louis Fed shows 152,504,000 jobs in Feb. 2020, just before the pandemic started in March. In April, 2020, the number of jobs began to rise. In May, 2022, we were up to 151,682,000.
According to the Bureau of Labor Statistics, the sectors which were still below their February 2020 level in May 2022, include: Leisure and Hospitality, Healthcare, Retail Trade, Wholesale Trade, Manufacturing, and Utilities,.
Sectors which have added jobs since February 2020 include: Government, Transportation and Warehousing, Construction, Information, Financial Activities, and Professional and Business Services.
But with the war in Ukraine, the price of oil, Omicron surges, rising interest rates and inflation, the moving parts continue to move and how the job market will sort itself out in the U.S. and globally remains to be seen.
Today’s Notable Headlines
“Are widespread layoffs coming? How the pandemic has changed employers’ recession strategy,” Yahoo Finance (from L.A. Times), July 6, 2022. https://finance.yahoo.com/news/widespread-layoffs-coming-pandemic-changed-120031683.html
“AIRLINE HIRING HITS RECORD HIGH, 2022 THE BEST YEAR YET” AOPA, June 14, 2022. https://www.aopa.org/news-and-media/all-news/2022/june/14/airline-hiring-hits-record-high
“Workers at Airports Have Had It,” New York Times, July 1, 2022. https://www.nytimes.com/2022/07/01/business/airport-employees-travel-delays.html
“Woman left with no clothes faced HOURS of searching for her luggage at Heathrow,” Express, July 7, 2022. https://www.express.co.uk/travel/articles/1636990/heathrow-airport-luggage-search-clothes-missing
“Tech companies rocked by layoffs as industry faces biggest downturn in two decades,” CBS News, June 14, 2022. https://www.cbsnews.com/news/tech-companies-layoffs-stock-market-cryptocurrency/
“Real estate firms Compass and Redfin announce layoffs as housing market slows,” CNBC, June 14, 2022. https://www.cnbc.com/2022/06/14/real-estate-firms-compass-and-redfin-announce-layoffs-as-housing-market-slows.html
“Mortgage industry stung by more mass job layoffs,” MPA, June 29, 2022, https://www.mpamag.com/us/news/general/mortgage-industry-stung-by-more-mass-job-layoffs/411353
“The Career-Boosting Strategy of Announcing Your Layoff: Workers sound off on Twitter and LinkedIn about their pink slips—and find new jobs,” Wall Street Journal, July 6, 2022. https://www.wsj.com/articles/the-career-boosting-strategy-of-announcing-your-layoff-11657106060?mod=life_work_featured_strip_pos1
Other Sources:
Jobs at LAX, https://www.jobsatlax.org/
Jobs at TSA, https://www.tsa.gov/about/jobs-at-tsa
Delta Airline Careers, https://www.delta.com/us/en/careers/overview
FAA jobs, https://www.faa.gov/jobs/career_fields/aviation_careers
Fred Economic Data, St. Louis Fed. U.S. Bureau of Labor Statistics, All Employees, Total Nonfarm [PAYEMS], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/PAYEMS, July 6, 2022.
Current Employment Statistics Highlights, BLS, May 2022. https://www.bls.gov/ces/publications/highlights/2022/current-employment-statistics-highlights-05-2022.pdf
Why am I doing this?
The coronavirus pandemic will be written on our memories just as the 1918 Flu Pandemic, the Great Depression, or the Cold War left their mark on past generations. Since March 11, 2020, this blog has examined the modern pandemic experience, drawing on my background as a medical technologist, a historian, and an ordinary person living through an extraordinary world crisis.
History's Edge 