Hey, everybody, Ken McElroy here,
so today we're going to get into factors that are shaping the labor market.
A lot of people are out of work, even though there are lots of job
openings. Meanwhile, the great resignation is upon us.
Millions of people are leaving their jobs or at least thinking about quitting.
So today we're going to go take a look at who's quitting and why
and why are so many people waiting to return to the workforce.
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So if you look at globally, we've got over 200 million
people out of work around the world.
And I'm going to tell you three reasons as to why I think we're going to continue
have labor issues all the way through next year and possibly beyond.
And if you stick around, I'm going to give you three predictions
as to what I think is going to happen as we continue
to have all these high unemployment rates and all these job openings.
So the picture of today's labor market is a strange combination.
Currently, the unemployment rate is about five point nine percent,
with almost seven million lost jobs from before the pandemic
that still need to be added to the economy.
So we're well over 10 million people that are looking for work.
And in May, there was about one unemployed person for every single job opening.
And yet the unemployment rate is still higher than it was pre pandemic
in February. Twenty twenty we were at three point five percent,
and today we're almost six percent, even with relatively higher unemployment.
Workers aren't staying put in their current jobs. In fact.
Forty one percent of workers have said
they're interested in moving to a different job.
That 40 percent statistic has shown up in many different places.
A Microsoft survey of over thirty thousand global workers
showed that forty one percent of those workers
were considering quitting or changing professions this year.
Meanwhile, a study done by software company,
Personio, of workers in the UK and Ireland showed that 38 percent
of those surveyed plan to quit and the next six months to one year.
Let's see why so many people are going to quit their jobs or want to quit.
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One of the major reasons that employers are looking elsewhere
is because they have seen how much they can get done at home
and they are reluctant to head back to the office full time .
They have found that work must accommodate life, not the other way around.
Eighty seven percent of American workers who have been working remotely said
they want to continue working from home at least one day a week.
Among all workers.
Sixty eight percent suggests that a hybrid workplace model is ideal.
And 42 percent of the current remote workers say that if their current company
does away with the work from home option, they're going to look for a new job.
Another reason is that people are looking for better benefits.
Nearly eight in 10 workers
want their company to provide benefits central to their economic well-being.
The study found that workers consider retirement plans, health, disability
and life insurance, paid family, medical leave and other programs
as critical to their financial health.
Forty percent of the workers said they were more likely now
than they were a year ago
to consider moving to a different company that offered better benefits.
Career advancement was a big concern for 80 percent of the workers
who are now looking for something new.
And thirty eight percent said that their career had stagnated
since the start of the pandemic.
A lot of them have said that they have been working hard,
but have not been given opportunities to advance professionally
in their current company.
Next, a push toward work life balance was motivating people to look elsewhere.
Thirty percent of the workers said they'd even take a pay cut for better balance.
And last. People are looking for an improved company culture.
Forty two percent of the workers
with plans to leave their current employer graded them to a C or below
on their ability to maintain employee connectedness and culture.
During the pandemic.
So those are the reasons that people are looking to quit.
Now we'll turn to another group, people who aren't returning to their jobs,
even if they're still unemployed.
According to a study by the Federal Reserve Bank of Dallas,
a lot of people aren't returning for two reasons.
The resurgence of the pandemic
in most parts of the country, along with child care concerns,
have prompted many people, women especially, to exit the workforce.
The Dallas Fed puts the number of people staying away from work for these reasons.
At one point, three million people, they are part of the thirty
one percent of workers who stated that they would not return
to their previous jobs at the same hours and pay.
That number has actually grown from 19 percent in July of last year.
Fast food and retail have seen the biggest shortages of labor, with retail
seeing more recent resignations more than any other industry.
Just fewer than six hundred and fifty
thousand retail workers quit in the month of April alone.
According to the data from the Labor Department,
that is a huge number, especially for one month.
Throughout the pandemic, essential workers, often
in lower positions, have borne the brunt of employers decisions.
Many were working longer hours on similar staffs in positions
that required interaction with the public with little to no safety measures.
In the US, the majority of them have no guarantee of paid sick leave.
It quickly burned workers out.
When you also consider the difficulties of using public transportation
during a pandemic and in some cases having their hazard pay revoked.
It has made the decision to leave a lot easier.
According to an article in The Washington Post, some are finding less stressful
positions at insurance agencies, marijuana dispensaries, banks
and local governments where their customer service skills
are rewarded with higher wages and better benefits.
Others are going back to school to learn new trades or waiting
until they're able to secure reliable childcare.
So many of you are probably assuming that the labor shortage
will become a thing in the past when the additional
three hundred dollar unemployment benefits are set to expire.
But so far, twenty six states have rescinded
the additional three hundred dollars from the federal government.
You'd expect these states to see a return to pre pandemic labor patterns.
In fact, employment fell by one percent in states that ended
federal benefits early, but rose two point three percent in states that kept up.
So there is no question that millions of Americans are struggling and for whom?
Three hundred dollars a week is a big deal.
But there is also plenty of data
to suggest that many others are in a position to wait for a better job.
So here are my three predictions.
First, I really, truly believe that we're going to have this high unemployment
through twenty twenty two.
But the first prediction, I believe, is that you're going to see wage growth
anywhere from five to 10 percent just to stay competitive.
That's the prediction number one. Prediction number two.
We're definitely going to see more stimulus
because people are going to have to pay their rent.
And the third thing, which hasn't gotten a lot of attention yet, is I believe
that a lot of employers are going to start outsourcing things overseas.
Think about India.
Think about Vietnam.
Think about the Philippines, where you can do things like hire a lawyer
or hire an engineer, hire a CPA or even a personal assistant.
Because employers are going to try to figure out, obviously,
how to get things done and also how to pay less for them.
So those are my three predictions. We'll see you next time.