As we have reported in the past, Labor Day typically signals a return to active recruiting and white-collar hiring after the August vacations. But the core unemployment rate keeps rising for workers with a bachelor’s degree, by 1.7%, versus .7% for those with a high school degree or less says Politico.com . Job postings for high-wage occupations, as reported by HiringLab.org, are trending 28% below last year at the same time, versus a 12% reduction for lower-wage occupations. With white-collar workers comprising 59.9% of total employment the impact of this turn down could have even more negative economic impact than the devastating low-wage job losses.
“This is not just a low-wage recession,” said Diane Swonk, Chief Economist at Grant Thornton. While lower-paid workers lost their jobs at about three times the rate of higher-wage employees, Swonk found that employment in the information industry is down 11.4% now compared to 7.7% during the great recession and employment in management services is down 4.7% compared to 2.4% then. Employment in the finance and insurance industries was down 5% between February and late June 2020 according to economists from the Federal Reserve and the University of Chicago. “Those are typically fairly recession-proof industries that are continuing to lose jobs, even though every other industry is recovering to some degree,” said Julia Pollak, a labor economist with ZipRecruiter. “That’s really cause for concern and pause.”
The U.S. Labor Department reports that more than 9 million workers in the bottom 40% of wage earners remain out of work at the end of June compared to 3.3 million workers in the top 40% of wage earners. But employers are slower with white-collar hiring and layoffs in white-collar industries are more likely to be permanent than those in front line sectors such as restaurant or retail. The flattening in job postings that occurred in August could indicate concern by companies at the timing of the economic recovery and lead to an even more conservative approach to white-collar hiring.
