Friday, May 24, 2024

‘I am losing my mind’: Behind the rosy job numbers, Americans are struggling to find work

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Companies are warier about hiring, workers compete for fewer spots and a large share of employees fear layoffs.

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Since leaving a university research administration job last May, Kyle Clark has cast an ever-widening net in his search for a new position.

First the 30-year-old sought jobs in technical editing, a skill he honed at the university. Then he leveraged his administrative experience, applying for openings in insurance and project management. Finally, he tossed his hat in the ring for a job posting at a local big-box retailer, only to be told the store wasn’t hiring.

After fruitlessly job hunting in the Portland, Oregon, area, Clark moved in with his parents in Tennessee with no better results. Now he’s heading to Chicago to try his luck in the Windy City.

The tally so far: about 250 applications, 14 positive responses, 12 interviews. No job offers.

“I am losing my mind,” Clark says, noting he has a four-year college degree and seven years of work experience. “I am just burned out. … I just want to be employed. I have skills, I want to work, and that’s what’s frustrating. I want to. Just let me.”

Why is it so hard to find a job right now?

The nation added a robust 275,000 jobs in February. But behind the gaudy job numbers, a labor market that was still soaring a year ago has become less hospitable to job seekers.  

Companies are warier about hiring amid high interest rates and wages. Workers are vying with more job candidates for fewer openings, forcing them to send in more applications. And a large share of employees are jittery about getting laid off.

“Hiring is slowing across the board,” says Brad Hershbein, senior economist at the W.E. Upjohn Institute for Employment Research, based in Kalamazoo, Michigan.

‘We already have over 100 applications’

Cheyenne Barton, 26, of Kissimmee, Florida, graduated in December with one degree in biomedical sciences and another in computing technology and software development – the kind of practical background employers have coveted.

She initially targeted software development jobs but is now looking for “really any job” where she can use her degrees.

Barton has applied for about 1,000 positions but hasn’t yet notched an interview.

Companies “say they want recent grads who are teachable and can learn quicker,” she says. “But then you apply for the job and it’s like, ‘Oh, we already have over 100 applications with people who are more qualified.’”

Many senior-level job seekers aren’t faring much better. Jennifer Gobora, 56, of Philadelphia, co-owned and helped run a marketing company for 20 years until the family business shut down during the pandemic. After earning a certificate toward an MBA, Gobora has applied for hundreds of marketing jobs in the Philadelphia area over the past eight months.

She was drawing interest from an average of about one company a week and had about 20 interviews, she says. But in the past few months, the positive responses have slowed to about two a month.

She wonders if companies are filling jobs internally and posting them just to satisfy corporate protocol.

“I keep telling myself that I’d be a catch,” she says.

Is job growth slowing?

The hiring slowdown is difficult to discern from the monthly jobs report. Besides the 275,000 jobs added in February, which followed 229,000 in January, job gains averaged a sturdy 255,000 average in 2023

Much of the job creation in 2022 and 2023 represented catch-up hiring after COVID-19 wiped out 22 million jobs and Americans flush with cash from stimulus checks and hunkering down spent the cache, says Hershbein from the Upjohn Institute. The buying binges prompted businesses to staff up. Now, the catch-up hiring is over and most of the savings have been depleted.

Meanwhile, companies are feeling the effects of high interest rates and sharply rising wages at the same time customer demand is waning and recession fears, though easing, are still swirling. Oh, and it’s a presidential election year – a wild card for economic and business policy.

“There’s a lot of uncertainty,” Hershbein says. As a result, many companies are saying, “’We’re just going to wait’” before bringing on more workers.

How common is getting laid off?

Although net employment growth in the jobs report has been strong, much of the gains can be traced to fewer layoffs, Hershbein says.

Companies such as Amazon, Google, Citigroup and UPS have announced thousands of layoffs recently, but initial jobless claims, a broad gauge of job cuts, remain historically low. After grappling with COVID-19-related labor shortages, firms have been reluctant to let workers go.

But bumps in employment gains from fewer people leaving jobs can last only so long, economists say. Hiring needs to pick up to sustain payroll growth.

How many job postings are there in the US?

In January, employers posted 8.9 million job openings, down slightly from the previous month and a peak of 12 million in March 2022, the Labor Department said Wednesday. The number of new hires dropped to 5.7 million, below the pre-COVID level. And just 3.4 million workers quit jobs, the fewest since January 2021 and a sign that workers don’t have another position lined up or are less confident they can land one.

In the same month, a barometer of small business hiring intentions fell to the lowest level since the depths of the pandemic in 2020, according to the National Federation of Independent Business.

“If you’re not sure business is going to be there six months, is it better to have your existing employees work harder than spend money (to add workers) and then lay them off in six months?” asks Tom Gimbel, CEO of LaSalle Network, a Chicago-based staffing agency.

‘I need to see the demand before I hire more’

Scott Ford, president of California Builder Services, plans to add just two employees to his staff of 17 this year, down from four new hires in 2023. Because of high interest rates that have discouraged homebuilding, sales have been flat at the Fresno area company, which sets up homeowner associations for developers, Ford says,

Meanwhile, wages have shot up 20% in the past couple of years because of employee shortages and skyrocketing insurance costs. As a result, his profit margins have been squeezed.

“Because the real estate market is so slow now, I need to see the demand before I hire more, expensive staff,” he says.

If the Federal Reserve cuts interest rates later this year as expected, it probably will prompt Ford to hire both because it will juice the housing market and make it cheaper for him to borrow money to pay the workers until they’re productive. But by then, he could struggle to serve the rising demand from developers.

Why are companies so slow to hire?

Many other businesses are also smarting from sharp pay increases the past few years and worry about a slowing economy, says Christi Patrick, who owns or consults for 44 Express Employment Professionals offices in Arkansas, Georgia, Mississippi and Tennessee.

Some firms are refusing to pay market rates, especially for less skilled workers, or they’re forking over high wages but demanding that workers have all 10 of the qualifications they’re seeking instead of nine of 10, Patrick says.

“Everybody is scared right now,” she says. “They see the softening coming.”

Another reason employers are imposing stricter requirements is to cut down on turnover, she says, which was a big headache during the post-COVID Great Resignation as tens of millions of employees switched jobs for higher pay during the hottest labor market on record.

Companies are also balking at the work-from-home demands of younger job candidates and requiring staffers to work in the office, at least part-time, Patrick says.

The result is more gridlock in the labor market that’s curtailing hiring. Patrick’s offices placed 10,386 employees in jobs so far this year, down from 14,084 during the same period in 2023.

Are more layoffs coming in 2024?

Even as businesses are paring back hiring, company notices of plant closures and mass layoffs are rising, notes Ian Shepherdson, chief economist of Pantheon Macroeconomics. By spring and summer, he expects average job growth to slow to 50,000 to 100,000 a month – a level that he predicts will prod the Fed to swiftly cut interest rates to avoid rising unemployment and a recession.

The drumbeat of headlines about layoffs is making workers feel less secure in their current positions. Just 45.1% of employees are confident about their company’s business outlook, the lowest on record dating to 2016, according to a recent survey by Glassdoor, the job search and employee review site.

While strong performers are burrowing down in their current roles, those who feel less confident are fervently looking for new positions, says Aaron Terrazas, Glassdoor’s chief economist.

“Everybody’s reacting to the fear,” he says.

Bottom line: More workers are competing for fewer open jobs, says LinkedIn, the employment-based social media company. There were 1.4 job vacancies for each unemployed worker in January, Labor Department figures show, down from about two jobs a year ago. That shift led U.S. job seekers to send out 21% more applications last year than in 2022, LinkedIn says in a report.

The ‘purple-striped unicorn’

Molly Dotson, 33, a sales account executive in San Diego, says she applied for about 200 jobs over six months before finding a position. Dotson had worked for a start-up tech company that hired quickly and then, over a year, laid people off. She was let go in the third wave in August. 

Landmark affirmative action case Two men fought for jobs in a river-town mill. 50 years later, the nation is still divided.

Several former co-workers who were cut in earlier waves landed new jobs quickly, Dotson says.

“When I started looking, I was shocked to find not only a dearth of actual positions open but just an insanely competitive market,” Dotson says. “There was a purple-striped unicorn” for every opening, she said, meaning hiring managers said there was a better candidate with specific experience in that particular role. 

“No matter how much self-worth and confidence you’ve got, the doubt creeps in after serial rejections,” she said. 

She finally landed a job at a project management company and took a role for which she was overqualified. But it offers growth opportunities without a pay cut, she says.

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