Shortage bottlenecks are showing up in the lack of hiring, JPMorgan says

toilet paper disinfecting wipes sold out grocery stores
Shelves with toilet paper and disinfecting wipes are nearly empty at a Pavilions supermarket in South Pasadena on March 11, 2020 in Los Angeles, California.

  • April’s dismal job growth is similar to the commodity shortages plaguing US businesses, JPMorgan said.
  • Average wages swung higher in April as firms raised pay to attract workers.
  • That increase is “consistent with constraints” in hiring and mirrors rising prices for key materials, the bank said.
  • See more stories on Insider’s business page.

Commodity shortages and hiring woes are more similar than they first appear, according to JPMorgan economists.

A handful of obstacles stand in the way of what is otherwise a promising US economic recovery. Supply-chain disruptions and a slew of factory backlogs gummed up the country’s manufacturing sector as demand strongly rebounded in April. Prices for everything from lumber and gasoline to toilet paper and palm oil have shot higher as a result.

Businesses’ need for workers similarly rebounded as firms look to service outsize consumer demand, but the US added only 266,000 jobs in April, a sharp deceleration from the job growth seen in March and a big miss of the 1 million-payroll estimate. Yet average hourly earnings surged through the month and the average workweek grew longer as businesses converted part-time employees to full-time work.

These developments are “consistent with constraints” in the labor market, rather than a lack of demand for workers, JPMorgan said.

“We had anticipated bottleneck pressures this year, but signs of similar constraints in US labor markets is a surprise,” the team led by Bruce Kasman said in a note to clients.

Economic data published Tuesday morning supports such claims. The country ended March with a record 8.1 million job openings, according to the monthly Job Openings and Labor Turnover Survey. The hiring rate climbed slightly, and about 1.2 Americans competed for every job opening. Although April JOLTS won’t be released for another month, the March figures suggest businesses were ramping up hiring efforts as the economy continued to reopen.

The rising commodity prices also point to another pressure plaguing the labor market. Experts including Federal Reserve Chair Jerome Powell suggested before the report that a jump in average wages would be indicative of a worker shortage. If wages need to climb to accelerate hiring, the combination of higher labor and materials costs could further boost inflation and create new economic worries.

JPMorgan, for now, sees such bottlenecks fading as the recovery charges on. Sustained policy support and strong economic growth should drive more Americans into the workforce. This should, in turn, alleviate some manufacturing pressures and help producers address their massive order backlogs.

The bank isn’t alone in its optimism. The expiration of bolstered unemployment benefits and the start of the school year will push more Americans to job openings, Neel Kashkari, president of the Federal Reserve Bank of Minneapolis, said Sunday.

The creation of new businesses can also offset permanent job losses. While April job data was hugely disappointing, it still seems as though the labor market will emerge without the long-term scarring many feared, Nobel prize-winning economist Paul Krugman said Wednesday.

“People seem to be eager to go back to work. Not enough to make companies that don’t want to pay higher wages happy. But this whole thing is really looking like a V-shape recovery,” he told Insider.

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Job openings hit a record high in March – showing the gap between job postings and hirings was huge even before April’s jobs report

Hiring jobless December
  • US job openings rose to 8.1 million from 7.4 million in March, according to JOLTS data.
  • That lands above the median estimate of 7.5 million and marks a record number of openings.
  • The hiring rate climbed to 4.2% from 4% as stimulus and vaccinations fueled reopening.
  • See more stories on Insider’s business page.

Job openings grew to record highs in the US in March amid continued vaccination and fresh stimulus.

The data shows businesses reopening along with the country, yet last Friday’s jobs report for April indicated employers have since had trouble filling those jobs.

Openings rose to 8.1 million from 7.5 million, according to Job Openings and Labor Turnover Survey, or JOLTS, data published Tuesday morning. The median estimate from economists surveyed by Bloomberg was for 7.5 million openings. The reading marks a third straight increase and places job openings at their highest level ever.

The food services, accommodations, and state and local government education sectors added the most openings throughout the month. The health care and social assistance sectors shed 218,000 jobs, marking the largest decline of the month.

Separations, which count layoffs and quits, dropped to 5.3 million from 5.4 million.

Quits climbed by 125,000 to 3.5 million. Layoffs and discharges sank by 243,000 to 1.5 million.

The country’s hiring rate rose to 4.2% from 4%, according to the report. That’s just above the pre-pandemic trend. Yet with roughly 10 million Americans unemployed, the pace signals the labor market recovery will take years if hiring doesn’t accelerate further.

Data published Friday suggests that such acceleration isn’t likely, at least not in April. The US added just 266,000 jobs last month, grossly missing the median estimate for 1 million payrolls. The reading also marked a sharp deceleration from the job growth seen in March. Unless the April figures prove to be noise or are revised higher, the report hints the labor market recovery hit major snags despite the broad easing of economic restrictions.

Some attributed the weak payroll growth to reports of labor shortages, but JOLTS data showed plenty of Americans searching for work. About 1.2 Americans competed for each job opening in March. That’s down from the February reading of 1.3 and the pre-pandemic level of about 0.8.

To be sure, a phenomenon known as reallocation friction can keep companies from hiring even in areas with an abundance of jobless Americans. Experts have warned that the post-pandemic economy will be drastically different from that seen in early 2020. The types of jobs available to workers could be very different, and jobless Americans might need time to decide which sector to work in if they have to make such a pivot.

The JOLTS report provides more detail around what was largely an encouraging month for the labor market. The country added 770,000 payrolls as Democrats’ $1.9 trillion stimulus supercharged spending. The unemployment rate fell to a pandemic-era low of 6%.

While the April jobs report showed the recovery stagnating last month, other indicators have shown more promising trends. Daily COVID-19 case counts fell to an 11-month low on Sunday and are swiftly trending lower as vaccination continues. Filings for unemployment benefits have similarly declined over the past four weeks and most recently slid below 500,000 for the first time since March 2020.

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Why America’s economic recovery is stumbling as experts badly misjudge the labor market

Now Hiring sign
A customer walks by a now hiring sign at a BevMo store on April 02, 2021 in Larkspur, California.

  • April’s jobs report was a shocking miss, suggesting the hiring rebound many anticipated was an illusion.
  • Virus fears, childcare pressures, and unemployment benefits all likely drove the weak payrolls read.
  • Biden has proposed massive packages focused on jobs, but they likely face months of negotiation before passage.
  • See more stories on Insider’s business page.

Democratic political advisor James Carville became famous in the 1990s for his phrase “it’s the economy, stupid.”

After April’s shockingly disappointing jobs report, it looks more like “it’s not the economy, stupid, it’s the virus.”

March’s strong jobs data – along with widespread projections of a coming economic boom – had raised optimism among economists for a continued recovery in the labor force. It prompted Federal Reserve Chair Jerome Powell to deem March an “inflection point” for the reopening of the economy, and experts saw it kicking off a season of outsize payroll increases. But the drop in April makes clear the virus continues to bite.

Economists had expected payroll gains to reach 1 million, but the country added just 266,000 jobs last month. It was the smallest monthly increase since January and the biggest miss of payroll forecasts in more than two decades. The unemployment rate rose to 6.1%, female employment declined, and, although hard-hit sectors like leisure and hospitality saw healthy gains, most others posted either meager growth or shed jobs entirely.

The Bureau of Labor Statistics’ Friday release underscores just how much the labor market still has to recover, and that the climb won’t be as easy as most economists anticipated. Even if April stands out as a gloomy outlier, the average pace of payroll growth suggests it could take years to fully recoup the millions of jobs lost to the pandemic.

What went wrong?

The jobs report was such a shock that it’s hard to find a single explanation at first glance. It also highlights just how inadequate forecasting tools are for measuring this unique economic moment.

Economists typically use a combination of quantitative and qualitative data to estimate future growth. Indicators like weekly jobless claims and hours worked join anecdotal evidence and broad surveys to create forecasting models. Economists’ calculations, when tallied together and averaged, usually come close to guessing monthly payroll additions.

The April data serves as a wake-up call for the many forecasters who didn’t even come close to guessing correctly. Whether models overlooked details like COVID-19 fears or bullish biases tarnished forecasts, economists need to reconcile how they were so wrong.

The disappointment was likely fueled by several factors instead of one solvable hurdle. Despite President Joe Biden’s overdelivering on vaccinations, the country is far from placing the coronavirus pandemic behind it. Daily case counts still averaged about 50,000 at the end of last month, and highly contagious strains continue to spread across the US.

The coronavirus pandemic has also been notable for the “she-cession,” hurting female employment much more than men. The absence of affordable childcare and lack of in-person schooling around the country likely kept some Americans home instead of working, as born out by the April report, which showed women – who disproportionately take on childcare responsibilities – losing jobs through the month.

How big is the labor shortage?

Last month also saw several businesses across the manufacturing and service sectors reporting difficulties in finding workers. The jury is still out on how widespread worker shortages might be, as about 10 million Americans remain unemployed. On one hand, some economists suggest boosted unemployment benefits cut into the incentive to find work. Strong wage growth in the leisure and hospitality sector also signals businesses may need to lift compensation to attract workers.

“The benefits are due to expire in September but perhaps people think jobs will be just as easy to find then as they are now, so why take a job today?,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said. “If people continue to resist taking the jobs on offer at the pay on offer, then wages will have to rise more quickly.”

The Chamber of Commerce called on lawmakers to withdraw the federal benefit to unemployment insurance following the April report. The supplement results in 25% of recipients earning more from unemployment benefits than by working, Neil Bradley, executive vice president and chief policy officer at the Chamber of Commerce, said in a statement.

“We need a comprehensive approach to dealing with our workforce issues and the very real threat unfilled positions pose to our economic recovery from the pandemic,” he added.

The April data does not quite agree with the chamber’s argument, showing labor demand overshadowing anecdotes of a supply shortage. April job gains were strongest in lower-wage industries and in sectors with in-person jobs. The composition of last month’s job additions “doesn’t scream supply constraints as the problem,” Nick Bunker, an economist at Indeed, wrote on Twitter.

Separately, the number of Americans temporarily laid off ticked slightly higher in April. That also signals labor demand wasn’t as robust as businesses’ anecdotes suggested.

Looking to other labor-market data, the steady decline in weekly jobless claims now looks much less encouraging for the recovery. The April uptick in unemployment comes as filings for unemployment benefits fell throughout the month to numerous pandemic-era lows. The drops initially seemed to signal that more Americans were returning to work, but BLS’ report suggests the downtrend has more to do with Americans dropping out of assistance programs than finding employment.

It could take months for the government to lend a hand

Much of the last few months’ promising job gains were linked to massive stimulus packages. The CARES Act helped a sharp hiring rebound after initial COVID-19 lockdowns in March 2020. And Biden’s $1.9 trillion plan in March 2021 spurred stronger economic activity last month.

The president has since rolled out two new spending proposals, the larger of which would spend $2.3 trillion on job creation. The American Jobs Plan would create millions of jobs by funding traditional infrastructure projects, clean energy initiatives, and nationwide broadband, Biden said in a Thursday speech. Biden’s administration has at other times cited a Moody’s Analytics projection of 2.7 million new jobs from the American Jobs Plan.

The smaller package, named the American Families Plan, could support hiring in its own right by overhauling the care economy, as it seeks to provide paid family and medical leave and childcare support.

Yet such support is likely months away. Republicans have balked at both plans, lambasting their hefty price tags and the tax hikes proposed to offset them. Democrats seem to face a challenge passing the package on a party-line vote via reconciliation, as some moderates in their party have yet to throw their full support behind the follow-up packages as they exist.

To be sure, the April report represents just one month of hiring. May numbers could show a healthy rebound and revive the positive trend. The economy is not even fully reopened from virus-safety considerations yet, so rebounds are likely.

But with additional fiscal support far on the horizon and economists highlighting a number of obstacles hindering job growth, the resurgent spring recovery for jobs that many economists were predicting is gone.

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Stimulus and COVID fears are keeping millions of Americans from rejoining the labor market, BofA says

hiring sign coronavirus
  • Some 2.5 million Americans won’t rejoin the labor force until late 2021, Bank of America said.
  • Virus fears and boosted unemployment benefits are keeping them from seeking work, the bank added.
  • Retirements and COVID-19 deaths will leave a more permanent drag on participation, BofA said.
  • See more stories on Insider’s business page.

The rapidly accelerating economic recovery is running up against labor shortages. The snags are temporary, but they hint at permanent changes to the US job market because of the coronavirus pandemic, according to Bank of America economists.

Stimulus, COVID-19 vaccinations, and reopening all helped hiring rebound in recent months. March job additions were the strongest since August, and consumer spending gauges suggest healthy demand will keep payroll growth robust into the summer. Yet as businesses rehire in preparation for a pickup in demand, some are reporting difficulties in finding workers.

While some 9.7 million Americans are officially tallied in the government’s unemployment gauges, another 4.6 million workers exited the labor force during the pandemic, the team led by Joseph Song said in a note to clients. More than half of those workers will likely rejoin the labor force by the end of the year, but face a few obstacles before they do so.

For one, fears of catching COVID-19 and its more contagious variants still loom large. Those concerns are likely playing a role inkeeping Americans from rejoining the workforce and looking for jobs, the economists said.

Low-income Americans might also hold off on seeking work because of stimulus’s disincentive effects, the bank added. The Biden administration’s $1.9 trillion support package included a $300-per-week expansion to unemployment insurance through September. While smaller than the CARES Act benefit, the latest boost could be leading some Americans to stay on the sidelines for now, Bank of America said.

“Our estimates suggest that those who previously made less than $32,000 would be better off in the near term to collect UI benefits than work,” the team added.

Still, Bank of America expects those 2.5 million Americans will rejoin the workforce by the fall as vaccination continues and the stimulus benefit fades. The remaining 2.1 million will take much longer to join the job market, or may not rejoin at all.

About 700,000 Americans are expected to have left the workforce due to a mismatch between their skills and available job openings. Training programs can help close the gap but bringing those workers back will take some time, the economists said.

Separately, 1.2 million workers retired during the health crisis and are unlikely to seek work once the country fully reopens. Another 140,000 workers have been lost due to COVID-19 deaths, the team estimated.

These longer-term worker shortfalls will influence economic data in two ways. At first, accelerated hiring will see the unemployment rate fall throughout the year. Tighter labor-market conditions will then lead to faster wage growth as businesses pay more to fill their openings.

BofA
Source: Bank of America Global Research

Yet those encouraging readings will rest on a less optimistic foundation. The millions of Americans that are unlikely to rejoin the workforce until the fall will leave the labor force participation rate well below its pre-pandemic level.

There is a “high risk” the participation rate doesn’t fully recover, and demographic trends could drag participation steadily lower over the next decade, the economists said.

Bank of America reiterated its forecast for the unemployment rate to fall to 4.2% by the end of the year. The benchmark will then return to its pre-pandemic low of 3.5% by the end of 2022, the team said.

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Some companies are blaming stimulus benefits for their hiring struggles, saying workers can earn more money on unemployment

now hiring
  • Stimulus checks and enhanced unemployment benefits are making it harder for companies to hire.
  • “Why work when you can get more staying home?” said a McDonald’s franchisee.
  • Hiring for some unskilled jobs was difficult pre-pandemic and could get worse in the coming years.
  • See more stories on Insider’s business page.

Companies are struggling to hire, and some say the stimulus package is to blame.

In March, Congress passed a stimulus package that included up to $1,400 in direct payments for individuals. The package also included weekly payments of $300 in federal unemployment aid through September, in addition to unemployment benefits paid out by states.

“The biggest challenge out there is the federal government and the state government are going to continue with this unemployment,” Blake Casper, who owns 60 McDonald’s locations in Florida, recently told Insider.

“That is truly creating the incentive to not work right now,” added Casper, who has tested giving away $50 for anyone who comes in for a job interview. “And, how do you blame somebody? You can make more money on unemployment.”

A federal program that paid $600 a week in unemployment benefits for part of 2020 meant that two-thirds of people collecting benefits made more than they had when they were employed, according to economists at the University of Chicago. While the current $300 in federal benefits is less substantial, it still has the potential to make up for lost wages, especially when combined with enhanced state benefits, business owners said.

Jake Abramson, a chef in Brookline, Massachusetts, told Insider that unemployment benefits paid him roughly $400 more per paycheck than his job after he was laid off in March 2020.

He said he took a significant pay cut when he lost his unemployment benefits several months later because he returned to work to avoid a career setback.

If he was working in another job where he was simply clocking the hours, Abramson said, his calculus would be different.

“I would definitely take the unemployment over that,” Abramson said.

Companies are struggling to hire, and some blame stimulus benefits

McDonald's worker
Fast-food chains are struggling to hire.

John Motta, a Dunkin’ franchisee who serves as chairman of the Coalition of Franchisee Association, said the math just doesn’t add up for many people deciding between unemployment benefits and working at a fast-food chain.

In Rhode Island, for example, the average weekly unemployment check is $270 from the state, plus $300 in federal benefits – $570 total. In 2020, the median weekly earnings in the the restaurant industry was $582 nationally, according to US Bureau of Labor and Statistics data.

“It’s gotten to a crisis status today,” Motta said.

A McDonald’s franchisee told Insider that he had been unable to open dining rooms because he didn’t have enough workers to staff locations.

“Why work when you can get more staying home?” the franchisee said. “Stimulus and unemployment are killing the workforce.”

Staffing struggles extend far beyond the fast food industry.

“There is an insatiable appetite in America for unskilled labor,” said Marc Wulfraat, the president of logistics consulting firm MWPVL.

Ryan Alovis, the CEO of LensDirect, told Insider that the eye contacts company is struggling to hire employees, particularly for shipping, inventory, and distribution positions. The company is facing “chronic no-shows,” with only 50 percent of candidates showing up for scheduled interviews. Only half of those who are hired ultimately show up on their first day.

“It’s ghosting,” Alovis said. “It’s very rare that we’ll get a reason.”

Alovis said that a number of factors are making hiring difficult. He said he supports federal benefits, but believes that the higher unemployment payments and stimulus checks are playing a role.

“I think that the government needs to be more methodical with how they’re offering these benefits and to whom they’re offering these benefits,” Alovis said. “I think that the government needs to incentivize people to get back to work.”

Critics say that employers are too quick to blame benefits

Outback Steakhouse
Outback Steakhouse faced backlash after a sign blamed staffing problems on “stimulus money and tax time.”

Last week, an Outback Steakhouse in Memphis sparked backlash online over a sign that said “people just do not want to work,” due to “stimulus money and tax time.” Tami Sawyer, a local county commissioner, posted a photo of the sign to Twitter.

“For the Outbackers that do show up for work, we ask for your understanding and patience,” the sign read.

Sawyer told Insider that she was disappointed by the sign. (A representative for Outback told Insider the sign was posted by an employee without approval from the restaurant or company, and was quickly removed.)

“I’ve been very involved with COVID-19 public health and economic recovery as a commissioner,” Sawyer said. “People who were working low wage jobs before the pandemic struggled as their places of employment closed. They had to pivot to other work like Amazon.”

Sawyer said that assumptions about why people do not return to the same job or industry as businesses reopen make her bristle, especially when there are accusations of laziness.

“It’s racially and economically coded,” Sawyer said. “Misperceptions and prejudice assumes working class people are just sitting around buying beer with their $1,400 and that’s just not the story.”

Credit Suisse analyst Lauren Silberman told Insider that, while the stimulus is a factor in why it’s difficult for companies to hire, it is not the root cause. Many industries were facing labor shortages before the pandemic.

“People want to work, if they have the opportunity,” Silberman said.

Pre-pandemic, the unemployment rate dropped to less than 3% in some states, a figure that would be typical for a labor shortage. Unemployment is currently 6%, which would historically indicate plenty of people are looking for jobs. But, pandemic-era childcare concerns and fears of catching coronavirus have made returning to work less enticing for some employees.

“I think there’s a fear element,” Silberman said.

A fundamental shift in American labor could be brewing

Some employers are considering raising wages to entice people to return to work.

Casper, the McDonald’s franchisee, said that he is considering raising starting wages from $12, which is more than $3 above Florida’s minimum wage, to $13 per hour. Motta said that companies are going to be forced to raise pay to compete, rendering higher minimum wage regulation obsolete.

Higher pay will likely be offset with higher prices for consumers. In states that have passed minimum wage regulation, CEOs say the chains have passed on the costs to customers.

“It’ll put people out of business, that’s for sure,” Motta said. “Will people pay $5 for a cup of coffee at Dunkin’ Donuts? I don’t know. I really doubt if they would. Would you pay six bucks for a hamburger at McDonald’s?”

Some employers will likely try to hold out on raising pay in hopes that more people will apply for lower-paying jobs as federal enhanced unemployment benefits expire in September. But Wulfraat said he expects hiring unskilled, inexpensive labor to only get worse in the coming years.

The percentage of the US that is 65 or older is swiftly growing as Baby Boomers enter retirement age, cutting into the labor force. Younger workers are more likely to be tech savvy, Wulfraat said, making them more prepared to apply for skilled jobs that do not involve the manual labor of a warehouse or restaurant.

“Think about all of the the trades where it’s heavy, dirty, smelly – all those nasty jobs that have to get done,” Wulfraat said. “Nobody wants to do that work anymore, cause there’s other things they want to do. Their priorities are different.”

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Students in China are paying talent agents thousands of dollars to get hired at big Wall Street names as the country opens up its financial market, report says

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Getting a top financial job with one of Wall Street’s big firms is something the well-off value immensely in China.

Talent consultant firms in the country have been recruiting finance professionals to assist rich students secure internships and full-time jobs with Wall Street titans, according to a recent Bloomberg report.

They price these services at $12,000 or more to offer an alternate route for students to get hired by companies like Goldman Sachs, Citigroup, McKinsey, Citadel, or Citic Securities, the report said.

Students are guided by bankers who help them with an entire plan of action ranging from networking, to drafting cover letters, and obtaining in-house referrals. They’ve managed to land coveted jobs in global financial hubs from Shanghai to New York.

The companies either denied association with these consulting firms, or declined to comment when contacted by Bloomberg.

A Shanghai-based agency called Wall Street Tequila is said to charge the highest fees. On its official WeChat account, the firm claims it has helped over 3,000 students secure high paid offers of 1 million yuan ($152,680) in the last seven years, Bloomberg reported.

Wall Street Tequila didn’t immediately respond to Insider’s request for comment.

It isn’t uncommon for bankers in China to tie up with talent agents, take up mentorship roles, and charge fees for internal referrals. But it leads to concern that these opportunities aren’t equally available to all socioeconomic classes.

Sean Wang, a senior banker and author, told Bloomberg: “If you pay to have someone else to write your cover letter, or get a first-round interview, is it fair to those job seekers who don’t have, or can’t afford, such packages?”

One consultant at Accenture told Bloomberg they were approached multiple times by agents, seeking payment in return for an internship referral.

The job market has become more competitive, as both global and regional banks are boosting hiring efforts to expand wealth management in the world’s second-largest economy. Goldman Sachs, UBS, and Credit Suisse are among banks looking to bump up their workforces in China.

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America’s companies are struggling to hire workers back. It risks derailing the economic recovery.

San Francisco reopening
Manager Cynthia Martinez converses with guests at El Rio, located at 3158 Mission St., on Saturday, April 3, 2021, in San Francisco.

  • The labor market is on the path to recovery, but it’s not a sure thing as the economy reopens.
  • Worker shortages are hitting some businesses, and experts warn of millions of jobs permanently lost.
  • Stimulus hasn’t led to a spending surge yet, and Americans may sit on their huge savings pile.
  • See more stories on Insider’s business page.

The positive March jobs report showed a country on the brink of full reopening, with good news for the economy around the corner. But just reopening isn’t enough for a full recovery.

“There’s no guarantee that the people whose jobs have been permanently eliminated will be able to find work elsewhere,” Nancy Vanden Houten, lead economist at Oxford Economics, told Insider. “At the same time, there’s a risk that labor force participation won’t return to what it was prior to the pandemic. We might still experience shortages of workers.”

Filling the hole in the labor market will take more than reaching a 3.5% unemployment rate and recouping every lost payroll, she said. The country was adding roughly 200,000 jobs a month before the pandemic, meaning the labor market will have to get back to the February 2020 level – and then some – to reach maximum employment.

The US began that climb in earnest last month, adding 916,000 nonfarm payrolls, blowing the median estimate of a 660,000 gain out of the water. The unemployment rate fell to 6% from 6.2%, matching economist forecasts, still far above the 3.5% pre-pandemic rate.

Experts are bracing for several months of outsize job gains as consumers thaw the frozen economy. But to Vanden Houten’s point, pressures are now emerging on the supply side. While consumer demand shows signs of coming back, other signs point to an imbalance between job openings and Americans actively seeking work.

Jobless claims, however, have been volatile in recent months and give a clearer hint at deep scarring. Filings fell to a pandemic-era low of 658,000 in March but rose to 744,000 last week, signaling persistent challenges in hiring.

Supply strains and lagging cities present new challenges

Some of the world’s top economic policymakers are warning of long-term scarring of the labor force that reopening can’t address. Countries will need to “think well in advance” of what a post-pandemic economy will look like so as to add jobs where they’re going to be, Kristalina Georgieva, managing director of the International Monetary Fund, said in a Thursday video conference.

Federal Reserve Chair Jerome Powell echoed her remarks, noting that millions of Americans will struggle to find work as they acclimate to a permanently changed labor market.

“The real concern is that longer-term unemployment can allow people’s skills to atrophy, their connections to the labor market to dwindle, and they have a hard time getting back to work,” he said in the conference. “It’s important to remember we are not going back to the same economy, this will be a different economy.”

Even the businesses set to benefit most from reopening are running into snags. Staffing at full-service restaurants remains down 20%, or 1.1 million openings, from the year-ago level, according to data from the National Restaurant Association. Owners and managers interviewed by The New York Times attributed the persistent shortfall to a lack of available workers. Others said their former employees chose to stay out of the workforce and subsist on expanded unemployment benefits.

The country’s most densely populated areas are also experiencing slow recoveries, government data shows. Los Angeles and New York City held the highest February unemployment rates of the 51 major metropolitan areas: 9.9% and 9.8%, respectively. This kind of high unemployment in densely populated cities is bad news for the economic recovery, as the longer that the engines of the pre-2020 economy lie dormant, the further away lies a return to a kind of “normal,” unless a new normal rapidly takes its place.

The stimulus spending boost could be smaller than expected

The government acknowledged risks associated with weak spending and acted on them. The $1.9 trillion stimulus measure approved by President Joe Biden in March was the largest relief package to hit the US economy since the CARES Act was passed in the first months of the pandemic. Americans received support in the form of stimulus checks and bolstered unemployment benefits, two boosts set to supercharge spending and overall demand as the economy reopened.

Recent studies suggest that boost may not be be as potent as anticipated. Stimulus check recipients spent just under one-quarter of their latest relief payments, according to researchers at the Federal Reserve Bank of New York. That’s less than the share spent from the CARES Act checks or the $600 payments issued in January.

About 42% of the payments were saved, the highest percentage of all three stimulus checks. Though those savings can be unwound over time, they do little to aid the recovery in the near term. The remainder of the checks is expected to go toward paying down debts.

“As the economy reopens and fear and uncertainty recede, the high levels of saving should facilitate more spending in the future. However, a great deal of uncertainty and discussion exists about the pace of this spending increase and the extent of pent-up demand,” the team led by Oliver Armantier said.

Stimulus passed throughout 2020 already buttressed Americans’ savings, and there’s been little sign of that cash being put to use. Peoples’ savings grew by $1.6 trillion since last March, according to the New York Fed, but that sum is largely staying in bank accounts instead of moving throughout the economy.

Americans who held onto their jobs haven’t increased their spending activity even though their savings increased, the Fed researchers said in a Monday blog post. Limitations to how much people can dine out or go on vacation will also curb a surge in consumer spending.

“It is certainly possible that some of these savings will pay for extra travel and entertainment once the COVID-19 nightmare is behind us, but our conclusion is that the resulting boost to expenditures will be limited,” the team said.

Outlooks remain strong. Banks are forecasting the strongest economic growth in decades, and the March payrolls report bodes well for near-term job gains. The president’s $2.3 trillion infrastructure plan promises to create millions of new jobs if it can win ample bipartisan support.

But the path to a fully healed labor market remains riddled with downside risks. Trends in worker availability, consumer spending, and permanent scarring will determine whether the country can stage one of the fastest economic recoveries in history.

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The world’s biggest crypto fund manager is hiring 9 ETF-related specialists, in anticipation of approval of the first US crypto ETF

Michael Sonnenshein.JPG
Michael Sonnenshein, managing director of Grayscale Investments.

  • Grayscale Investments is hiring an ETF team, in a sign it expects the US to approve crypto exchange-traded funds.
  • The digital asset manager doesn’t currently have an active filing with the SEC for a crypto-related ETF.
  • Canada has already approved three cryptocurrency ETFs that trade on the Toronto stock exchange.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Grayscale Investments, the largest digital currency asset manager, has posted nine ETF-related job ads on LinkedIn, in a sign it expects the Securities and Exchange Commission to approve the first US crypto ETF.

Crypto ETFs have been hotly debated in the US ever since the Winklevoss twins’ filing of their bitcoin ETF with the SEC was rejected in 2017. The SEC has so far been arguing that the crypto market is too volatile, lacks sufficient surveillance, and is easily manipulated.

The US regulator is now considering ETF applications from WisdomTree, NYDIG, VanEck, and Valkyrie Digital Assets. Grayscale has filed to launch an ETF in the past, but it does not currently have an active filing with the SEC for a bitcoin, or crypto-related ETF. However, it could push its $35 billion Bitcoin Trust, the largest of its kind, into an ETF.

“We’re not able to provide further detail aside from the fact that we are continuously exploring new opportunities, such as an ETF, in response to customer demand,” Michael Sonnenshein, Grayscale’s CEO and managing director, told Bloomberg. “We were the first to provide exposure to a digital asset through a regulated wrapper, and our goal is to ensure that we lead the market in whatever future product we bring forward as well.”

Grayscale’s new roles require between three and five years experience in financial positions involving exchange-traded funds. The job postings as seen on LinkedIn currently include an ETF market-maker relationship manager, an ETF finance reporting manager, ETF finance support manager, ETF creation and redemption specialist, ETF authorized participant relationship manager, ETF product development specialist, a compliance officer, and two sales director positions.

Regulated ETFs aren’t too far away, as Canada approved three publicly-traded bitcoin ETFs within the last month that trade on the Toronto Stock Exchange.

Ark Invest’s Cathie Wood told CNBC in February she expects the US to greenlight a bitcoin ETF, as she’s confident in President Joe Biden’s pick for SEC chairman, Gary Gensler, who is seen as a positive for cryptocurrencies. The Senate banking committee on Thursday voted in favour of sending Gensler‘s nomination to the floor for confirmation.

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Over 70,000 people have applied to work at my bridesmaid-for-hire business – here’s how I decide who to hire

Jen Glantz
Jen Glantz is the founder of Bridesmaid for Hire.

  • Jen Glantz is an entrepreneur and founder of the company Bridesmaid for Hire.
  • Since starting her business in 2014, Glantz has fielded over 70,000 applications from paid bridesmaid hopefuls.
  • Glantz says she scans applications quickly for key details, and then conducts a long interview process to get to know each candidate.
  • Visit the Business section of Insider for more stories.

Soon after I started my business Bridesmaid for Hire, clients were requesting something I truly wasn’t prepared to offer. I was the world’s first person offering a service where brides could hire me to show up at their wedding, pretend to know them from some point in their life, and be their bridesmaid for the day. All of a sudden, clients were asking if they could hire me and additional professional bridesmaids as well.

I was a solo-preneur and didn’t know how to hire a team for a job that I’d just invented. So, I decided to start by simply sharing the news that I was hiring people on social media and my website. After only a few weeks, I received thousands of job applications from people all over the world.

Over six years after starting this business, I’ve had over 70,000 people apply to work for me. I’ve both hired and fired over the years – the job isn’t as glamorous or as easy as it looks. I even found a way to monetize the audience of people who were interested in working for me and bring in an additional revenue stream for my business. 

Now, I have a streamlined hiring process. Here’s how I vet and select applicants to join my small business. 

Scanning applications for key details 

With thousands of people applying to work for my company every month, going through each application is nearly impossible. To organize the hiring process, I scan the applications for key details and keywords that are applicable to what kind of experience the ideal candidate should have.

While a lot of people think the number one job requirement to work for my company is that they’ve been a bridesmaid a handful of times, it actually isn’t something I weigh heavily in my vetting process.

Instead, I like to find people who have experience in sales (so they have top communication skills and the ability to read and react to situations), working in high-stress environments (because what wedding isn’t high-stress?), and work well with groups of people (whether they’ve managed teams or worked one-on-one with lots of people before).

Even though thousands of people apply monthly, only a handful of applicants end up being considered. 

When you’re hiring for a position, it’s important to be clear on what skills are must-haves and what experience is non-negotiable versus simply a plus. It will make the hiring process easier and more efficient. 

Conducting interviews and in-person tests

The job of being a professional bridesmaid at a strangers wedding is more of a complex role than you’d imagine. You’re not only a part of the bridal party, you’re also working as the bride’s personal assistant, on-call therapist, social director, and wedding peacekeeper. Hiring for this role means that the interview process has to be in-depth and oftentimes, in person.

Round one is a video call where I assess the person’s personality, experience, and overall passion for the job. During this round, most people express more of an interest in working as a professional bridesmaid for the perks and the party, so 90% of people don’t make it past this round.

Round two is a test where the candidate is given multiple real-life wedding scenarios and asked how they’d handle them. The candidates that don’t make the cut here are often shocked by these questions and unsure of what to do, while the best candidates bring creativity and problem solving techniques to the table. 

Round three, which very few people make it to, involves an in-person meeting and social situation test. This is the stage where I’ll spend quality time getting to know a candidate. A lot can be known about a person, their habits, and their unique value by spending time with them. By this stage, after a day or two of hanging out with the person, I’ll make my final decision on whether or not they are hired. Usually, more than 90% of people I meet in person will not make it past this round.

Creating a money-making course 

Even though over 70,000 people have applied to work for my company, my hiring rate is very low. If 10 people a year make it to round three, only one might be hired. Because of that, I realized I had to find another way to meet a major need of a large audience of people who wanted to work for my company.

In many applications, there were mentions of wanting to work a cool job, be their own boss, and move away from their current career. Since I knew I couldn’t hire all of these people, I decided to find a way to service these needs.

Four years ago, I created an online training course that helps any interested applicants learn how to start a side hustle in the wedding industry. Not only do they get the behind-the-scenes details on my business (from pricing to marketing strategies) but they get the tools they need to start their own company. 

This course has allowed me to create another popular revenue stream for my business, while also providing a service that benefits this audience immensely.

Hiring for your company can be tricky, especially if the role is unique. If you do get an influx of candidates that you can’t hire, finding an offering or product that can help them get a different opportunity might be a beneficial way to help them and help you scale your company.

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3 Black queer journalists share their advice for breaking into the journalism industry and what publications should do better to recruit minority employees

Daric L Cottingham interview
(L-R) Tre’vell Anderson, Cerise Castle, Femi Redwood.

  • Regardless of any sudden DEI efforts made in 2020, journalist Daric L. Cottingham says the media industry has a long way to go to promote diversity. 
  • Cottingham interviewed three Black LGBTQ journalists on lessons they’ve learned breaking into the media industry.
  • The group also shared their thoughts on how publications can better recruit and retain Black queer journalists.
  • Visit the Business section of Insider for more stories.

As the spike of police brutality targeted at Black people became a constant headline in 2020, the world began to listen to concerns of structural racism and bias, especially in professional settings. 

Daric Cottingham Headshot 2021
Daric L. Cottingham.

Many industries started to examine their racist pasts. Journalism in particular began to reckon with the lack of diversity in newsrooms, and the racist rhetoric it used in coverage of diverse communities.

These “reckonings” felt like an empty PR attempt, since the same behaviors are still present at many publications in 2021 

Despite these “attempts,” we’re left with a lingering question of how can journalism actively change to be as diverse as the communities it reports on. One way is to hire diverse candidates with intersecting identities, such as Black queer journalists who navigate the industry with the added stress of implicit bias rooted in racism and queerphobia.  

I spoke with three Black queer journalists about the lessons they’ve learned navigating the journalism job market.

Cerise Castle .JPG
Cerise Castle.

Cerise Castle (she/her) is a Black lesbian multimedia journalist who’s produced and hosted segments for VICE News Tonight, Los Angeles NPR affiliate KCRW, and Wondery. 

Tre'vell Anderson headshot 2021.JPG
Tre’vell Anderson.

Tre’vell Anderson (they/them) is a Black queer, non-binary person of trans experience, the president of the National Association of Black Journalists of Los Angeles, co-chair of NABJ’s LGBTQ Task Force, and editor-at-large at Xtra Magazine.

Femi Redwood headsshot 2021
Femi Redwood.

Femi Redwood (she/her) is a Black lesbian TV news anchor who most recently reported for VICE News on intersectional issues including race, gender, and LGBTQ identities. She’s a board member of NLGJA: The Association of LGBTQ Journalists and a co-chair NABJ’s LGBTQ Task Force.

Here’s what they had to say, including advice they have for young Black queer journalists trying to break into the industry and advice for publications to better recruit and retain these diverse journalists. 

What was one lesson you learned as a Black, queer journalist? 

Cerise Castle: The hardest lesson I think is the fastest one you learn: that your voice and ideas will probably always be counted last. I think that’s a valuable lesson because I think it’s helpful to go in knowing the reality of most newsrooms and how most outlets work. Unfortunately, I think it’s a reality that you have to accept most of the time.

Tre’vell Anderson: A lesson that I’ve learned as a Black, queer journalist is that, just because my editor doesn’t understand the importance of a particular story, doesn’t mean that story shouldn’t be told. As Black, queer, trans folks, as folks from a marginalized, less represented community in newsrooms, often the stories that we want to tell about our communities don’t hold that same weight. Or don’t seem as necessary or worthy to our editors, who are white folk more often than not.

Femi Redwood: Pay attention to the media group because it may have more control in how the station or the publication handles things than the individual entity you will work for. If it’s a problematic station group, you don’t want to work there.

What advice do you have for young Black, queer journalists trying to break into the industry?

Castle: I would say not to change yourself for the industry. I had a college professor who told me that to be on camera, I had to have shoulder-length hair and couldn’t wear it naturally. I couldn’t have piercings or do my makeup a certain way. And all of that, just … It isn’t true. 

Granted, there will be some news directors that will force you into that box, but you can always be yourself. The first on-camera job that I got picked me because they liked my curly hair and liked that I bleached it. They liked that I had facial piercings. They liked that I didn’t look just like every other reporter from central casting. Playing into your identity can help you out in many situations, to get that job, and to get the story too.

Anderson: My advice to Black queer journalists, emerging and coming into the industry and those that are fairly established, is to remain undaunted as we navigate these spaces. Follow your heart, follow your gut, follow your intense desire to tell your community’s stories, even when the broader media ecosystem, or your editor, or whomever tells you that those stories don’t have any worth. 

It’s important to build an identity outside of the news organizations that we might work for and beyond the work we do because being a journalist is a thankless job in many ways. Still, it’s a very necessary job at the same time.

Redwood: My one piece of advice to queer Black journalists is to go into every situation as if you were a straight white man. It’s been my recent guiding principle. 

Often we are told we need to accept anything, accept any pay, and accept any position. We are told that unless we check off certain boxes – years of experience, education, awards, etc. – we don’t deserve more. Nah. 

Be like straight white men. They are socialized to expect what they believe they deserve. Young queer Black journos need to do that as well. We often see straight white men “fail up” while we tell ourselves, ‘we aren’t ready for a new position, we don’t deserve a raise, or haven’t earned a promotion.’ 

You deserve that job even if you only worked on your college paper; you deserve that pay even if you didn’t go to what’s considered a top j-school, you deserve that promotion even if you haven’t earned any awards, because why not you.

What can publications do to better recruit and retain Black, queer journalists?

Castle: Pay them. That’s all, that’s my answer. Pay them what they’re worth, more than they’re worth.

Anderson: What these people need to do to recruit more Black queer journalists is the same thing they need to do to recruit more Black journalists, right? They have to get out of their own way and get out of our way. 

Many folks hiring and recruiting reporters aren’t doing intentional outreach to groups of color, to 1) Let us know the available opportunities, and 2) Give us the same kind of level playing field that our white counterparts have. 

It also requires you to not only augment and change your recruiting habits, but you also need to change your retention practices because once you hire a Black person, you need to make sure that the work environment is one they will want to stay at your company. 

That might mean that some people on the team need to leave because they’re toxic, or they’re white supremacists, or they’re racist, or they’re homophobic, or transphobic.

Redwood: It’s all a big circle. And all of these things work hand in hand. To recruit Black queer journalists, you have to create a place they want to work. Because if the environment is homophobic or full of racist microaggressions, then Black folks aren’t going to want to work there. 

The next thing is to create paid internships. Expecting journalists to work for free, it’s a form of gatekeeping that unfortunately prevents many Black and brown and queer journalists from getting in. Because statistically speaking, we don’t have the same wealth as white counterparts.

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