Though mass layoffs always make headlines, they actually say very little about the US economy. Even recent stock market volatility and slowing economic growth don’t tell the entire story.
The surprising truth is, jobs are incredibly secure. Workers are less likely to get laid off today than at nearly any other time in modern US history.
In 2018, US businesses laid off 21.9 million workers. That may seem like a lot, but not when you consider that twice as many people — 40.1 million — quit their jobs last year, according to the latest data from the Bureau of Labor Statistics. When more workers are quitting jobs than getting fired, that means they have strong confidence in the economy and in their job prospects.
The US economy is actually recording the lowest rate of layoffs and firings since the federal government began tracking job turnover two decades ago. Just look at how much has changed since the 2007 recession.
These numbers only go back two decades, but the trend is the same if you look at a different measure of job security: the number of people filing for unemployment benefits.
About 213,500 laid-off workers filed for unemployment each week in March, which was the lowest number in 50 years. The last time fewer people filed for unemployment was in November 1969, when the economy was booming and incomes were skyrocketing.
That said, it’s important to note that this data only includes workers who are officially classified as employees. It does not include gig workers, such as Instacart or Lyft drivers, who employers classify as independent contractors.
The data also tells us that the most reliable paychecks these days come from jobs in health care, finance, insurance, and durable goods manufacturing, while the most at-risk jobs are at restaurants, retail shops, and wholesale businesses.
But even workers in the most unstable industries don’t have to worry much if they lose their jobs. Restaurants and retail stores are creating way more new positions than they’re slashing. So all those Toys R Us employees likely won’t struggle to find a new job.
There actually aren’t enough workers to fill all the open positions.
The US is experiencing a massive labor shortage
For the past two decades, employers could be picky. There were always more workers than jobs available, so managers didn’t have to do much to find a good candidate to hire.
That’s not the case anymore, though. For nearly a year now, the number of open jobs each month has been higher than the number of people looking for work — the first time that’s happened since the labor department began recording job turnover at the end of 2000.
At the end of January, the US economy had 7.6 million unfilled jobs, but only 6.5 million people were looking for work. This was the 11th straight month that the number of job openings was higher than the number of job seekers.
Employers have been complaining about a shortage of skilled workers in recent years, particularly workers with advanced degrees in STEM fields. Nearly ever industry now has a labor shortage, but here’s the twist: Employers are having a harder time filling blue-collar positions than professional positions that require a college education.
The hardest-to-find workers are no longer computer engineers. They are home health care aides, restaurant workers, and hotel staff. The shift is happening because more and more Americans are going to college and taking professional jobs, while working-class baby boomers are retiring en masse.
This means that — for once — low-skilled workers have the most leverage in the current labor market.
There’s no better time for working-class Americans to demand better wages, benefits, schedules, and work conditions. They may need to if they want to see their paychecks grow.
Wages are finally starting to rise, but barely
Americans may have job security but, for the most part, they’re not getting richer.
Slow income growth has been the most persistent problem afflicting the US economy in its recovery from the Great Recession. Wages have barely kept up with the cost of living, even as the unemployment rate dropped and the economy expanded.
In March, workers only got a 4-cent average hourly raise, despite a surprising 10-cent jump in February. (At first, the labor department recorded an 11-cent increase, but revised it down by a penny.)
The cost of food and housing have gone up in the past year, so paychecks have had to stretch further. But because of recent falling gas prices, the annual inflation rate has fallen to 1.5 percent, compared to a high of 2.4 percent in 2018 (based on the Consumer Price Index). So when you take inflation into account, workers’ wages only grew about 1.9 percent within the past year. That’s much faster than they’ve been growing since the recession started in 2007, but it’s still pitiful when you compare it to the sky-high payouts corporate CEOs are getting.
Frustration over stagnant wages is also the major underlying factor behind widespread worker strikes across the country in places like California, Illinois, and Missouri. Congressional Republicans had promised that their massive corporate tax cuts would help the average worker, but the gains have been meager.
In response, voters in some states have forced businesses to give low-paid employees a raise.
In November’s midterm elections, voters in Missouri and Arkansas overwhelmingly approved ballot measures that will raise the minimum wage for nearly 1 million workers across both states. And as a result of the new laws, low-wage workers in 19 states got pay raises on January 1.
And for the first time, Congress is considering a bill that would double the federal minimum wage to $15 an hour. Businesses that raise wages experience lower job turnover, so higher pay raises could help keep another 40 million people from quitting their jobs this year.