In this episode, Pete shares the latest data included in the Open Jobs and Unemployment Reports produced by the US Bureau of Labor and Statistics and talks about what it might mean for those in and outside of the job market.
Unemployment and job market data
According to the US Bureau of Labor and Statistics:
1. Current job openings have surpassed 10.9 million
2. Current unemployment is less than 8.4 million (5.2%)
• 2022 Salary & Hiring Guide
• Current Recruiting Trends
• Big Ways Candidate Screening Will Change Because of Covid-19
• Ways the Pandemic Will Change the Recruiting Process as We Know It
Pete Newsome 0:00
You’re listening to the Hire Calling Podcast. In today’s episode, I’m going to break down the latest data in the US jobs and unemployment reports. It may not be information you want to hear, but it’s information I think everyone needs to hear. Let’s go.
Pete Newsome 0:27
Welcome, everyone and thank you for listening to the Hire Calling Podcast. I’m Pete Newsome and this is your source for all things hiring, staffing, and recruiting. I’m flying solo tonight, giving Ricky a bit of a break because I wanted to spend a few minutes talking about numbers. Some numbers that have been on my mind for a few months, that I’ve been trying to reconcile, with limited success and I’m not sure I feel better about the numbers that I’ve seen over the last couple of days.
Pete Newsome 0:56
But I think they’re important. I think they’re relevant to everyone in America. And I want to take a few minutes to share that information. And hopefully, anyone listening will get some benefit from this episode tonight. So, I own a staffing company. And being in the position that I am in, I feel like I get the benefit of seeing trends in the hiring market, often before anyone else does.
Pete Newsome 1:24
And I’m lucky to have a good group of peers and friends across the country who were in the same industry, staffing company owners in the Pacific Northwest, in California, Texas, Midwest, New York, all up and down the East Coast. And through various associations, we have the opportunity to share information with each other. And we do pretty openly.
Pete Newsome 1:48
And a few months ago, probably around the May timeframe, we started to collectively realize that the market was shifting pretty significantly. It was becoming harder to fill jobs. In many cases, specifically for us at 4 Corner Resources, we were having a really difficult time filling jobs, in some cases we’ve filled for years, without any problem at all. Candidates just weren’t interested, certainly not interested in the salary and hourly rates that we were offering.
Pete Newsome 2:23
So, we’ve had to make adjustments. And at first, I didn’t realize how widespread it was. But over a matter of a couple of weeks, talking to this group of folks that I stay in close contact with, I realized, boy, this is prevalent, you know, across the country right now, where companies large and small, employers of all sizes are having to raise their salaries significantly. Now we hear and have heard a lot in the press recently.
Pete Newsome 2:57
And most of you’ve probably experienced it firsthand. I know I have in retail stores in restaurants. They’re very understaffed. And the easy complaint, of course, is that the restaurant owners and retail store owners need to pay more. And maybe they do. I have to say that I don’t have much first-hand knowledge of that space, I don’t operate in that area.
Pete Newsome 3:22
Our company fills professional-level roles, primarily in the IT finance marketing space, we cover a lot of different verticals, but we just don’t play at that level. So, I really don’t have a lot of insight other than as a consumer. And absolutely, I’ll be the first to admit that there’s a labor problem. When you can’t get a table because there’s not enough coverage at a restaurant. That’s a problem.
Pete Newsome 3:48
But I’ll leave it up to the restaurant owners to figure out how to solve that. I’ve been much more concerned with the problem of my own business and that of my clients who need good employees, need good employees at reasonable rates. And I can assure everyone out there, everyone that I know firsthand, from a personal and professional standpoint, has been making those adjustments and accommodations to an alarming point.
Pete Newsome 4:17
And that’s really the first thing that started to be on my mind with this is the realization that this isn’t necessarily a great thing. Now, of course, we all want individuals to make more money. But when we see it happen with such a spike and across the board, it doesn’t take a lot to conclude that these costs are going to be passed along with the consumer and that’s what I really started to think about.
Pete Newsome 4:51
So, when I mentioned my unique position as a staffing company owner, I’m seeing this happen to a significant degree and the only logical conclusion is that these drastic increases in hourly rates and salaries that employees are receiving are going to soon be passed along to the consumers and the prices of goods and services. And I don’t think that’s going to take very long.
Pete Newsome 5:15
Now, the inflation that’s going to come with that has nothing to do with what the government’s doing, with the Federal Reserve, with currency, value, all of that. That’s its own issue. But I also have had to question, why our government is spending taxpayer dollars in the way that they are in some of these cases, specifically, in extended unemployment benefits. Because the numbers really just don’t add up. We see a labor market that is underserved, we see job openings off the charts.
Pete Newsome 5:53
And I can tell you firsthand, I’ve seen what I consider to be pretty unnatural acts over the past few months, with what a lot of our clients have had to do to just maintain staff. And I hear these stories around the country. And I know that this, like I said earlier, is not unique to us. And so that’s a problem that has some pretty big ramifications. And I won’t go into too much detail about what I think all of those ramifications are. But it’s significant and real. I wanted to try to put some data behind it.
Pete Newsome 6:31
And about a month ago, I started digging into some statistics and came across one that I quite frankly never paid attention to before. And it’s the number of job openings that exist in the US. It’s a number that’s not really relevant to me in particular, other than as a citizen, the same way as everyone else. Unless it is alarming in a way that’s going to affect the staffing industry as a whole. And the number that I discovered last month, which is actually from July, I believe, I’m sorry, it was from June. It’s a report that came out on August 9th, is that there are currently 10.1 million job openings in the US.
Pete Newsome 7:12
As I said a second ago, I really didn’t have much reference point for that, it didn’t mean anything for us, for me. So, I look back on the historical averages, and over the last 10 years, 10-15 years, we averaged about 6 million job openings. So, 6 million openings under normal circumstances, 10.1 million job openings now. So that’s 10.1 million jobs that companies are trying to hire for and at that point in time have done so unsuccessfully.
Pete Newsome 7:44
And that is existing at a time where our government in spending taxpayer dollars, has chosen to pay unemployment benefits above and beyond what people would normally receive. And they’ve done so with the explanation, or certainly the perceptions been created, that it’s necessary because of a lack of jobs. The data indicates the absolute polar opposite is true. And that’s pretty alarming. And it’s something that I haven’t been able to reconcile, I’m not going to try to do so in this podcast episode.
Pete Newsome 8:26
But if you stop and think about what that actually means, it just doesn’t make a whole lot of sense. Now look, I am a supporter of, you know, unemployment and see the value in it, especially at a time like what we all experienced with COVID. You could argue whether a lot of the lockdown should have happened. But they did and furloughs and layoffs and permanent job losses were all very real. And there was a need for a time to help out the average American. No question about it. It was a rough time.
Pete Newsome 9:03
And the numbers, the actual numbers show that, you know, in a very clear fashion. But that time has long since passed. And we didn’t react to it very well, at all. So, you know, I’ve been kind of chewing on that number for the past few weeks trying to decide, you know, how and when and if I should communicate that out and express the concern that I think goes along with it.
Pete Newsome 9:34
And then things really stepped up a couple of days ago, when the job openings report comes out. Now in normal times, that’s a pretty good indicator of the strength of the economy. Are we creating new jobs? And for those of you who were paying attention to this, you saw that there was a lot of negative press associated with the job report that came out this past Friday. I believe it was September 3rd and we created 235,000 new jobs in the US.
Pete Newsome 10:06
And it was a disappointment because there was an expected number that was somewhere in the neighborhood of three times that. It was such a disappointment that President Biden chose to have a press conference that day and came out and started to give all kinds of explanations as to why there were “only” and I’m using air quotes for those of you who are just listening and not seeing me. That we only created 235,000 new jobs. Now, when I heard that number, my first thought was, well, we’re creating 235 on top of the 10.1.
Pete Newsome 10:43
If anyone’s disappointed by that number, they’re not really paying attention to what’s going on. And during this press conference, I was just enthralled, in listening to the President, say that you know, the limited jobs were due to the Delta variant of COVID, which just doesn’t make sense to me at all when there’s no reason to create a significant number of new jobs when companies can’t fill the ones that they already have. I mean, they can put them out there, but it just doesn’t make a whole lot of sense for the organizations.
Pete Newsome 11:19
So, there’s no question in my mind that that’s where a lot of that limited number or the number that was less than what was forecasted came from. The other thing that I found, I’ll just say disturbing during the press conference, was that the President repeatedly mentioned that his infrastructure bill is intended to create millions of new jobs. Now, as someone who’s a pretty big believer that the market is supposed to take care of these things itself.
Pete Newsome 11:50
I would say that I don’t think the federal government’s job, as a rule, should be to create jobs. I think the market does that just fine on its own, but certainly not at a point where we have historical highs in the number of open jobs that are currently out there. It makes no sense. It certainly doesn’t make sense when we’re spending taxpayer dollars unnecessarily to create those jobs. And it was a bizarre thing for me to witness because it all served, it seemed to be just in start-contrast to what’s actually happening, and no one seemed to be upset by it.
Pete Newsome 12:36
In fact, the tone was one of almost defending how few new jobs were created. So, I wanted to share some data as a next step here that hopefully will provide some insight into why I’m saying the things that I am, show the numbers firsthand if I can figure out how to how to share my screen appropriately, I will do it. Okay, here it is. So, I’m going to show three slides. And if you have the opportunity to look, watch us on YouTube, I hope you do, but I’ll do my best to walk everyone through it.
Pete Newsome 13:15
The first slide and these are directly from the Bureau of Labor Statistics website, it’s bls.gov. I recommend everyone familiarize themselves with this website, I mean it tells the story for so many things that are happening in our economy, without needing to listen to media or information on Twitter and trying to form an opinion, the data speaks for itself.
Pete Newsome 13:41
So, the first thing I want to show is the number of Americans right now, civilians, who are on unemployment, and I wish I were a little bit better at this with the mouse. But that number as of August 2021 is 8.4 million Americans are unemployed. 8.4 million Americans who are looking for a job, in theory, but don’t have one. Now, why is that alarming? Well, we have 10 point 1 million openings. Now I’ll show you a slide in a minute. I’ll go ahead and just fast forward to it now.
Pete Newsome 14:24
Since this sort of spoiled it. Well, the new number of openings actually came out today. And that’s why I’m doing the podcast right now. And that number, which if I were on the right screen, I would show, is that we have not just 10.1 million openings, which was on the last report, but we have 10.9 million openings now. So, there are 800,000 more openings in July 2021 than there were in June. This is a problem. And it’s a really frightening one.
Pete Newsome 15:07
We’re not able to keep up with the number of openings. And there’s a big battle that’s going on right now for labor in the market. And I want to show everyone in a minute that this isn’t just related to, based on the data, it’s not just related to what’s happening in restaurants. You know, that’s not nearly enough to cover all of this. Although that’s very real. This is a widespread problem. And yeah, the numbers just create what should be a concern for everyone.
Pete Newsome 15:44
Now, it should be a concerning period, it should be a significant concern when we’re looking to spend taxpayer dollars to create even more jobs. So, as we exist right now, there are roughly 2 million more jobs than there are people looking for jobs. That’s bad math. That means there’s going to be, on one hand, you can see this is a positive, increased wages, but they’re increased wages across the board, they’re going to result in significant goods and services prices increasing.
Pete Newsome 16:24
Now, that’s great for the people who are getting the raises, it’s great for the people who are changing jobs. And that’s a whole different subject that we’re going to cover on a different podcast, the great resignation that’s happening right now. But the folks who are on a fixed income, are going to suffer the most, the folks who are already being supported by taxpayer dollars are going to suffer significantly, and it’s not going to be okay.
Pete Newsome 16:52
And it’s not going to take a long time for these prices to be passed on. It’s coming and it’s coming soon. So, 10.9 million current openings, as of the BLS report today, compared to 8.3 million, who were looking for a job right now on unemployment. And just for some perspective, that equates to a 5.2% unemployment rate. The last time we had that was, I believe it was August 2015, when Obama was president. Everyone thought things were going along pretty well, then, right?
Pete Newsome 17:29
The government wasn’t feeling the need to create, and I quote, millions of jobs, which is what our president is trying to do now. The government wasn’t looking to spend trillions of unnecessary taxpayer dollars to create jobs that aren’t needed. And there wasn’t the imbalance back then even, of open jobs versus folks looking for jobs. It was much more in line with the normal situation. So, we have a huge problem.
Pete Newsome 18:02
And it’s about to be made significantly worse. And that’s really the most alarming thing of all for me. So, let me just close for anyone interested, and you know, I highly recommend just going to this site, play around with the data yourself, let it speak for itself. But what this page shows is the job opening rates by industry right now, and this is a little delayed, it’s July 2021. But I expect when the August report comes out, just like the one that came out today, it’s going to be worse. It’s going to be, you know, even greater.
Pete Newsome 18:38
So, total non-farm jobs, and this includes all the industries you see here on the screen, is that 6.9% of all the jobs in those industries are unfulfilled right now, unfilled. So, let’s look at a couple of industries and compare them to the overall and I’ll go right to the foodservice industry. The one that we all know of, and no surprise, that’s the highest on the chart. 10.8% of all jobs in that industry are unfilled right now.
Pete Newsome 19:11
So that’s about what we’d expect. But as I said a couple of times now, it certainly doesn’t stop there. Our primary, one of our primary areas of businesses is in IT, these are big salaries, they’re high-end jobs, professional-level jobs, college degrees, for most of the employees, certainly in-demand roles. These are at 5.6% of those jobs that are open right now. I’m sorry, 6%. Now as you go from industry to industry, you see that this is happening across the board, you know, finance and insurance 5.2%, professional business services, let’s see, 8%. Professional in Business Services 8%.
Pete Newsome 20:06
So, I could keep going. And what we would see is, it’s every industry. I can tell you that it’s positioning, low end, high end, everything in between. And as I keep saying, the data indicates that it’s bad now, the effort that seems to be underway in Congress, from the White House, is going to make it significantly worse. I just don’t see how there’s any other outcome.
Pete Newsome 20:47
So that’s the message I wanted to share tonight. It’s one that hopefully is not considered to be political in nature. That’s certainly not the intention. But it is something that transcends the staffing industry. I think I’m in a unique position to see these things, I’m in a unique position to feel these things impact my own business, and then you start to dig around and look for answers as I did.
Pete Newsome 21:18
And I don’t like what I see. And I wanted to take the opportunity to share that if anyone’s interested in, you know, digging deeper yourself, by all means, you know, do so. If anyone is in a position to try and do something to help, you know, at the federal government level, I hope you’ll do so.
Pete Newsome 21:39
And if anyone you know, and I want to you know, make this point, very genuinely, if I’m missing something obvious, and I hope that I am, I mean I’m not an economist, I don’t have a degree in that area. I would love to know what I am missing. You know, I mean that in the most open way. So please reach out.
Pete Newsome 22:06
Our podcast email is email@example.com. Again, hire calling, H-I-R-E calling @4cornerresources.com. We’re pretty easy to find. You can go to 4cornerresources.com, you can get to me really easily if you’re interested, if you have specific information that serves as a counter to what I’m suggesting, that we should all be concerned about.
Pete Newsome 22:33
I would love to know, and I would immediately come back and do another podcast and rectify whatever misperception I may have created through this. But in the meantime, I’m going to remain concerned and do my best to guide my own business, to guide all our clients as best I can. And I’ll keep paying attention and we’ll report back soon. So, thanks for listening, and have a great day.
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