These markets have been historically strong since the economy reopened last year. But recent data suggests that the tight labor market may finally be loosening.
Last week the initial jobless claims for unemployment rose for the first time in recent history. In addition, many larger tech firms are reporting either layoffs or hiring freezes given the looming economic difficulties.
Tech firms, given their growth, have been leading the hiring markets for quite some time. Microsoft, Coinbase, Netflix, Twitter, and Google have all either had or announced layoffs or hiring freezes in the past couple of months.
Tech workers have long been in a seller’s market, being able to dictate salary, benefits, and the ability to work almost whenever or wherever they chose. That trend seems to have ended with the current tightening in the marketplace.
Many tech workers currently interviewing are reported starting salaries that have decreased 30%. Also, the laissez faire concepts of working how, where, and when they want also seem to have vanished.
Before you start acting like this is a bad thing, please realize that this is exactly what economists have been waiting and hoping for. The Fed’s actions, in raising its benchmark interest rate, seem to be finally cooling down the economy.
If this trend continues, depending on what the White House and Congress does in controlling spending, we may be able to reduce the rate of inflation in a shorter time span than previously considered.
Let me leave you with this.
Economists are talking about how payrolls are increasing, but not at a rate consistent with inflation. There isn’t anything new about this. It’s a trend that has been happening for my entire working life.
When I graduated from DePaul University in 1989, my dream job was one where I earned $18 – $19 per hour. Let’s now fast-forward 33 years to my daughter’s graduation from the same business school last month.
She graduated cum laude and her dream job was earning $24 – $25 per hour. In 33 years, starting salaries for upper tier business school grads with almost 4.0 GPA’s had only increased 33%.
During the same time period, general inflation figures rose 138.96% outpacing starting salary increases by almost 106%.
Many look at the younger generation and can’t understand them. Why don’t they get married, own houses, buy cars, or actively participate in our democracy? Why are they always so angry?
Why can’t they put in a solid day’s work? Why do they expect everything to be handed to them?
Studies have shown that my daughter’s generation is the first in America who don’t believe in the American Dream. They honestly don’t believe that their lives will be better than their parents.
I can’t tell you how sad this makes me.
Think about how you would be if you worked hard and still couldn’t afford the basics of life. If this was your economic reality, then you might feel the same way. It’s all economics.
What’s the answer? Opinions vary. I’m not going to get into that. It’s a slippery slope with no end in sight.
Suffice it to say that our economy has problems. At least it looks like things are beginning to slow down and go back to being under control.
We’re all going to get through this. Let’s get through it together.
*Words from our exceptional leadership