Recently, a laid-off YouTube employee is about to receive their final paycheck, a former entrepreneur had to borrow money from family to pay the mortgage, and a senior financial advisor struggled to secure interview opportunities.
According to Bloomberg, white-collar employment growth in the United States has stagnated. While the national unemployment rate remains at a historic low, job opportunities in industries such as finance, technology, media, law, and accounting have not seen significant growth.
Over the past year, nearly 120,000 corporate positions have disappeared in Chicago, Los Angeles, and San Francisco, while white-collar employment in smaller cities like Phoenix and Seattle has also declined. Even emerging cities amid the pandemic like Austin and Miami have experienced stagnation in the labor market.
Data released by the U.S. Bureau of Labor Statistics in March shows that white-collar employment in the U.S. only grew by 0.6% compared to a year ago, roughly one-third of the overall employment growth rate. The wage growth for high-paid workers has also significantly slowed down.
During the peak of the pandemic, banks, consulting firms, and tech companies were heavily recruiting, benefiting from the policy environment of low interest rates, easy access to loans, and government subsidies. However, as the post-pandemic period unfolds, many of these support measures have tapered off, leading companies like Citigroup, McKinsey, and Tesla to initiate layoffs.
“The labor market’s boom during the pandemic has come to an end,” said Alexandra-Dana Gusita, head of the Tiger Recruitment New York office, to Bloomberg. “Employers are now more cautious when hiring.”
Compared to pre-pandemic levels in February 2020, job listings on platforms like Indeed for positions in banking, finance, media, communications, and software development have decreased.
Recently, 25-year-old Jack Benedict learned that he and 43 other employees of YouTube Music were let go in February after speaking in support of unionization at the Austin City Council. At that time, he had already been informed that his contract with Alphabet would end in March.
“Even though the job market seems robust, job security lacks, especially in the tech industry,” Benedict said. “All these big tech companies are trying to downsize or replace employees with artificial intelligence. He worries that simply having a college degree won’t suffice when companies require ten years of work experience.”
The weakness in white-collar employment is partly due to a significant reduction in part-time positions. Part-time positions are often seen as economic indicators because during challenging economic times, companies tend to cut part-time positions first before moving on to full-time layoffs. Two years ago, part-time positions peaked, but now over 420,000 part-time jobs have disappeared.
Daniel Lapin, a 48-year-old financial management advisor in Boca Raton, Florida, has been struggling to find a job since being laid off by a pharmaceutical company in February. Lapin mentioned that he has applied to over 100 job positions, many of which had over 200 competitors. In the span of two months, he received numerous automated rejection letters and some interview invitations.
He noted that the vacancies currently available are mostly blue-collar jobs, stating, “People may say the job market is strong. But what is the definition of strong? The newly added job positions now have relatively lower salaries.”
Vanguard’s Chief Global Economist Joe Davis wrote in a report last month that the demand is highest for workers earning less than $55,000 annually.
Based on Vanguard’s data from employer 401(k) plans, the employment rate for the lowest one-third of workers surpasses that of high-income earners. The analysis also revealed that low-income workers are experiencing faster wage growth. Davis explained, “Many high-income workers are accepting slower wage growth due to opting for remote work, which accelerates wage growth for low-income workers.”