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    The Potential Dark Side of a White-Hot Labor Market

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    The strong job market may be about to take a turn for the worse. That could come to haunt those who made choices based on today’s conditions.Shanna Jackson, the president of Nashville State Community College, is struggling with a dilemma that reads like good news: Her students are taking jobs from employers who are eager to hire, and paying them good wages.The problem is that students often drop their plans to earn a degree in order to take the attractive positions offered by these desperate employers. Ms. Jackson is worried that when the labor market cools — a near certainty as the Federal Reserve Board raises interest rates, slowing the economy in an attempt to control rapid inflation — an incomplete education will come back to haunt these students.“If you’ve got housing costs rising, gas prices going up, food prices going up, the short-term decision is: Let me make money now, and I’ll go back to school later,” Ms. Jackson said. Anecdotally, she said, the issue is most intense in hospitality-related training programs, where credentials are often valued but not technically required.Strong labor markets often encourage people to forgo training, but this economic moment poses unusually difficult trade-offs for students with families or other financial responsibilities. Cutting working hours to go to class right now means passing up the benefits of strong wage growth at a moment of soaring fuel, food and housing costs.Taking advantage of the plentiful job opportunities available now could come with upsides — employment can build résumés and provide people with valuable experience and skills. But labor economists say that deciding to skip school and training today could come at a cost down the road. Research consistently suggests that people with degrees and skills training earn more and have more job stability in the longer run.“It’s really great to have income, but you also want to keep your eye on the future,” Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said in an interview last week. “Workers with higher skills will have higher wages and more upside potential.”Ms. Daly speaks from personal experience. She herself dropped out of high school at age 15 to earn money. She eventually earned her graduation equivalency and enrolled in a semester of classes at a local college, but had to work three part-time jobs — at a Target, a doughnut shop and a deli — to support herself while she studied. She went on to pursue a degree full time and later earned a Ph.D. in economics.“That hard work was the best choice I have ever made,” she said. Drawing on her own experience and on the data she parses as a labor economist, she often urges young people to stay in training to improve their own future opportunities, even if they have to balance it with work.“The jobs that are hot right now — restaurants, warehousing — these are things that won’t last forever,” Ms. Daly said.Many sectors are, unquestionably, booming. Today’s labor market has 1.9 open jobs for every available worker and the fastest wage growth for rank-and-file workers since the early 1980s. That’s especially true for lower-wage occupations in fields such as leisure and hospitality.The State of Jobs in the United StatesJob gains continue to maintain their impressive run, even as government policymakers took steps to cool the economy and ease inflation.May Jobs Report: U.S. employers added 390,000 jobs and the unemployment rate remained steady at 3.6 percent ​​in the fifth month of 2022.Slowing Down: Economists and policymakers are beginning to argue that what the economy needs right now is less hiring and less wage growth. Here’s why.Opportunities for Teenagers: Jobs for high school and college students are expected to be plentiful this summer, and a large market means better pay.Higher Interest Rates: Spurred by red-hot inflation, the Federal Reserve has begun raising interest rates. What does that mean for the job market?Against that backdrop, fewer students are opting to continue their education. The latest enrollment figures, released in May by the National Student Clearinghouse Research Center, showed that 662,000 fewer students enrolled in undergraduate programs this spring than had a year earlier, a decline of 4.7 percent.Community college enrollment is also way down, having fallen by 827,000 students since the start of the pandemic. The decline is likely partly demographic, and partly a result of choices made during the pandemic.The shift to online learning was challenging for many students, and, just as schools were allowing students back into the classroom, the job market heated up and opportunities suddenly abounded. Inflation began to ratchet up at the same time, making earning money more critical as the cost of rent, gas and food climbed. That confluence of factors is likely keeping many students from continuing to pursue their education.Gabby Calvo, 18, left the business administration program at Nashville State this year. She said she did not know what she wanted to do with the degree, and had begun making good money, $21 an hour, as a front-end manager at a Kroger grocery store. The job was an unusual one for someone her age to land.“They didn’t really have anyone, so they took a chance on me,” she said, explaining that nobody else stood ready to fill the position and she had worked closely with the person who held it previously.Teenagers are often finding they can land positions they might not have otherwise as companies stretch to find talent, and teenage unemployment is now hovering near the lowest level since the 1950s.Ms. Calvo is hoping to work her way up to the assistant store-manager level, which would put her in a salaried position, and thinks she has made the prudent choice in leaving school, even if her parents disagree.“They think it’s a bad idea — they think I should have quit working, gone to college,” she said. But she has made enough money to put her name on a lease, which she recently signed along with her boyfriend, who is 19 and works at the restaurant in a local Nordstrom.“I feel like I have a lot of experience, and I have a lot more to gain,” Ms. Calvo said.The question, then, is how people like Ms. Calvo will fare in a weaker labor market, because today’s remarkable economic strength is unlikely to continue.The Fed is raising rates in a bid to slow down consumer demand, which would in turn cool down job and wage growth. Monetary policy is a blunt instrument: There is a risk that the central bank will end up pushing unemployment higher, and even touch off a recession, as it tries to bring today’s rapid inflation under control.That could be bad news for people without credentials or degrees. Historically, workers with less education and those who have been hired more recently are the ones to lose their jobs when unemployment rises and the economy weakens. At the onset of the pandemic, to consider an extreme example, unemployment for adults with a high school education jumped to 17.6 percent, while that for the college educated peaked at 8.4 percent.The same people benefiting from unusual opportunities and rapid pay gains today could be the ones to suffer in a downturn. That is one reason economists and educators like Ms. Jackson often urge people to continue their training.“We worry about their long-term futures, if this derails them from ever going to college, for a $17 to $19 Target job. That’s a loss,” said Alicia Sasser Modestino, an associate professor at Northeastern University who researches labor economics and youth development. Still, Ms. Sasser Modestino said that taking high-paying jobs today and pursuing training later did not have to be mutually exclusive. Some people are getting jobs at places that offer tuition assistance while others can work and study at the same time.Other students, like Ms. Calvo, might use the time to figure out what they want to do with their futures in ways that will leave them better off in the long run.Plus, the economy could be shifting in ways that continue to keep workers in high demand. Baby boomers continue to age, and immigration has declined sharply during the pandemic, which could leave employers scrambling for employees for years. If that happens, degrees and certificates — labor market currency for much of the past two decades — may prove less essential.Luemettrea Williams, who holds down three jobs in order to pay her tuition and other bills, at her job in a doctor’s office in Nashville in May.Laura Thompson for The New York Times“There comes a point at which there are so few high school graduates to play with that you have to give your pool cleaner a raise,” said Anthony Carnevale, the director of Georgetown University’s Center on Education and the Workforce. Plus, Mr. Carnevale said, economic policies coming out of Washington could add to the need for high-school-educated workers for a time. President Biden’s infrastructure bill, passed last year, is expected to create jobs in construction and other fields as it directs investment toward bridge rebuilding and airport and port upgrades.“We’re about to go through an era when you don’t need to go through college. That’s going to be a popular story,” he said.Even before the pandemic, people were increasingly questioning the value of a college education. Many people do not complete their degree or certificate programs, leaving them without improved job prospects and often crushing student loan burdens. And higher education alone is not a panacea: Some certificates and qualifications confer much greater labor market benefits, while others offer a smaller wage premium.But data and research continue to suggest that staying in school benefits workers over the long run. Unemployment is consistently lower for people with college degrees, and wages increase notably as education levels climb. The typical worker with only a high school diploma earned $809 a week in 2021, while one with a bachelor’s degree earned $1,334.“The high school job market has been declining since 1983,” Mr. Carnevale said. His research has shown that after the early 1980s, degree holders began to widen their lifetime earnings advantage.The economic resiliency that comes with education is what Luemettrea Williams is banking on. Ms. Williams, 34, has recently transferred to Nashville State as a nursing student.She had been working for years as a medical assistant in a doctor’s office, but got the job because she already knew the doctor; she did not have the relevant credential. Early in the pandemic, the doctor asked her what she would do if he retired, and she realized it was time to return to school. She is working three jobs to pay her tuition, along with her rising gas and grocery bills. She and her 9-year-old daughter have moved in with her aunt, but Ms. Williams is confident she’ll end up with a sturdy career at the end of her two-year program.“That is No. 1: being able to have a stable income where I don’t have to work three jobs to make ends meet,” Ms. Williams said. “I just have to get through these two years, and my life will change.” More

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    Hiring Remains Strong Even as Fed Tries to Cool Economy

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    The Labor Department reported 390,000 new jobs in May, as policymakers try to ease inflation without inducing a recession.American employers extended an impressive run of hiring in May, even as policymakers took steps to cool the economy in an effort to ease high inflation.The Labor Department reported Friday that employers added 390,000 jobs, the 17th straight monthly gain. The unemployment rate was 3.6 percent for the third straight month, a touch away from a half-century low.At the same time, the labor force grew by 330,000 people, and the share of adults employed or looking for work continued to edge closer to prepandemic levels.The data signaled that the Federal Reserve’s initial moves to dial back its monetary support for the economy were — at least so far — not constraining business activity so much that hiring was feeling a pinch.After the strong rebound from the depths of the coronavirus lockdowns — all but 800,000 of the 22 million jobs that were lost have been recovered — the Fed has shifted its emphasis from maximum employment to its other mandate: price stability. The challenge is to apply its primary tool, a steady series of interest-rate increases, without inflicting a recession.“I think we’re on sort of what looks like a glide path right now, and that’s good — nothing’s broken,” said Guy Berger, the principal economist at the career-focused social network LinkedIn. “But keep fast-forwarding it a year and the question marks are still big.”The closely watched indicators include the impact on wages, which have been increasing at a pace not seen in decades, though not enough to keep up with inflation over the past year. The Fed is worried that rising labor costs will be passed along to consumers.Wages kept rising across industries.Percent change in average hourly earnings for nonmanagers since January 2019

    Data is seasonally adjusted. Not adjusted for inflation.Source: Bureau of Labor StatisticsBy The New York TimesOn that score, the Labor Department report showed little change in trajectory. Average hourly earnings rose 0.3 percent from the previous month, the same pace as in April, and were 5.2 percent higher than a year earlier, compared with a 5.5 percent year-over-year increase in April.“It’s moderating, but it’s not moderating to a level, I think, where it’s consistent with the Fed’s inflation goals,” said Michael Feroli, chief U.S. economist at J.P. Morgan, said of wage growth. He said the Fed would probably want wages to cool toward an annualized 3.5 percent pace, at the higher end, a rate that officials view as aligned with 2 percent inflation.The State of Jobs in the United StatesJob gains continue to maintain their impressive run, even as government policymakers took steps to cool the economy and ease inflation.May Jobs Report: U.S. employers added 390,000 jobs and the unemployment rate remained steady at 3.6 percent ​​in the fifth month of 2022.Vacancies: Employers had 11.4 million vacancies in April down from a revised total of nearly 11.9 million the previous month, which was a record.Opportunities for Teenagers: Jobs for high school and college students are expected to be plentiful this summer, and a large market means better pay.Higher Interest Rates: Spurred by red-hot inflation, the Federal Reserve has begun raising interest rates. What does that mean for the job market?President Biden gave a nuanced celebration of the jobs data in remarks on Friday, emphasizing recent gains while arguing that a slowdown would be welcome, allowing inflation to ease.“The point is this: We’ve laid an economic foundation that’s historically strong,” Mr. Biden said. “Now we’re moving forward to a new moment, where we can build on that foundation, build a future of stable, steady growth so that we can bring down inflation without sacrificing all of the historic gains that we have made.”Stocks declined on Friday and bond yields rose as investors evidently read the report as reinforcing the Fed’s muscular efforts, which risk denting economic growth. “The better the data, the more difficult that a pause or reduced pace of tightening later this year becomes,” analysts at TD Securities wrote in a research report published after the jobs numbers were released.The continued job gains are among many indications of a vibrant economy. Reports from the nation’s largest banks show checking accounts are still above 2019 levels for nearly all income groups. New bankruptcies and debt-collection proceedings are both at their lowest levels since tracking began in 1999.Yet those encouraging trends have been at odds with the generally sour national mood, dominated by inflation concerns. U.S. consumer sentiment declined in early May to the lowest since 2011, according to the University of Michigan.The unemployment rate stayed flat in May.The share of people who have looked for work in the past four weeks or are temporarily laid off More

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    Ford Plans 6,000 New Union Jobs in Three Midwestern States

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    Ford Motor said on Thursday that it was planning to invest $3.7 billion in facilities across the Midwest, much of it for the production of electric vehicles, which the company said would create more than 6,000 union jobs in the region.“We’re investing in American jobs and our employees to build a new generation of incredible Ford vehicles,” Jim Farley, the company’s president and chief executive, said in a statement. “Transforming our company for the next era of American manufacturing requires new ways of working.”The announcement, made jointly with the United Automobile Workers union, detailed investments in three states. Ford said it would invest $2 billion and create about 3,200 union jobs in Michigan, including many tied to production of the new F-150 Lightning pickup truck, the company’s highest-profile and most important bet on electric vehicles.In Ohio, Ford will spend over $1.5 billion and create nearly 2,000 union jobs, primarily to build commercial electric vehicles in the middle of this decade. The company also said it would add over 1,000 union jobs at an assembly plant in Kansas City, Mo., that will produce commercial vans, some gas-powered and some electric.The company had indicated that some of the investments would be coming, like the expansion of production capacity for the F-150 in Michigan, but had not detailed the magnitude.The moves follow Ford’s announcement last year that it would build four factories in Kentucky and Tennessee — three battery factories for electric vehicles and a truck assembly plant — irking union officials and elected leaders in Midwestern states, who worry about losing manufacturing jobs to the South.In addition to the new Midwestern jobs, Ford said it would convert nearly 3,000 temporary jobs into permanent full-time positions before the date that its contract with the U.A.W. calls for — which is after two years of employment.“We are always advocating to employers and legislators that union jobs are worth the investment,” the U.A.W. president, Ray Curry, said in a statement. “Ford stepped up to the plate by adding these jobs and converting 3,000 U.A.W. members to permanent, full-time status with benefits.”Assembling the F-150 Lightning at the Dearborn Truck Plant. Ford will add about 3,200 jobs in Michigan, many tied to the electric truck’s production.Brittany Greeson for The New York TimesSam Abuelsamid, an auto industry analyst at Guidehouse Insights, said the changes were important as a way to help Ford attract and retain labor in a tight job market, while potentially helping the company avoid costly labor unrest during negotiations over a contract that expires next year as it spends billions on the transition to electric vehicles. A six-week strike by workers at General Motors in 2019 cost that company billions of dollars.“I’m sure one thing Ford would absolutely love to avoid is the potential for a strike,” Mr. Abuelsamid said. “Keeping a positive relationship with the U.A.W. now is to their benefit.”But the investments appear unlikely to substantially diminish the broader threat that the shift toward electric vehicles poses to the autoworkers union and to employment in the U.S. vehicle manufacturing industry, which stands at around one million.“It’s about changing the perception of what’s happening,” Mr. Abuelsamid said. “It’s a balancing act between your work force and your investors,” who would prefer to see labor costs rise more slowly or decline at unionized automakers like Ford and General Motors.Because electric vehicles incorporate far fewer moving parts than gasoline-powered vehicles, they require significantly less labor — about 30 percent less, according to figures that Ford has generated.As a result, estimates suggest that the toll of electrification on auto industry jobs could be significant absent large new government subsidies. A report released in September by the liberal Economic Policy Institute, which has ties to organized labor, found that the auto industry could lose about 75,000 jobs by 2030 without substantial government investment.By contrast, the report found, if additional government subsidies encourage the domestic manufacturing of components and greater market share for vehicles assembled in the United States, the industry could add about 150,000 jobs over the same period.President Biden has backed substantial subsidies for electric vehicles, including vehicles made by unionized employees, but those measures have languished in the Senate and their prospects are uncertain.In the meantime, much of the job growth tied to electric vehicles has occurred at nonunion facilities owned by newer automakers like Tesla, Rivian and Lucid, or U.S.-based battery facilities owned wholly or in part by foreign companies like the South Korean manufacturers SK Innovation and LG Chem.In Thursday’s announcement, Ford noted that its new battery and vehicle production facilities in the South would create about 11,000 jobs. But those employees will not automatically become union members, and workers in those states tend to face an uphill battle in unionizing.For investors, however, Ford’s additional investments in electric vehicles appears to be welcome news as the company seeks to reinvent itself amid competition from the likes of Tesla and Rivian. Ford’s stock price, which had dropped substantially this year, rose more than 2 percent on Thursday.Ford also said Thursday that it sold 6,254 electric vehicles in May, a jump of more than 200 percent from a year earlier. That number included 201 F-150 Lightnings, which the company started producing in April.The company has about 200,000 reservations for the Lightning, which is central to its efforts to catch up to Tesla, and stopped accepting new ones because production will take months to meet demand.Ford indicated that sales of the truck would be much higher in the coming months as production increased and trucks in transit reached dealerships. Ford is aiming to produce 150,000 Lightning trucks a year by the end of 2023.Sales of electric vehicles — and conventional cars — have been limited by a shortage of computer chips. Ford’s overall sales of new vehicles in May fell 4.5 percent from a year earlier. Auto executives are also increasingly worried that the supply of lithium, nickel and other raw materials needed to make the batteries that power electric cars is not keeping up with the growing demand for those vehicles.Vikas Bajaj More

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    Economic Scorecard: Biggest Numbers May Not Be Best, for Now

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    As the Federal Reserve tries to rein in inflation without causing a recession, slower job creation and wage growth could be a plus.When it comes to the economy, more is usually better.Bigger job gains, faster wage growth and more consumer spending are all, in normal times, signs of a healthy economy. Growth might not be sufficient to ensure widespread prosperity, but it is necessary — making any loss of momentum a worrying sign that the economy could be losing steam or, worse, headed into a recession.But these are not normal times. With nearly twice as many open jobs as available workers and companies struggling to meet record demand, many economists and policymakers argue that what the economy needs right now is not more, but less — less hiring, less wage growth and above all less inflation, which is running at its fastest pace in four decades.Jerome H. Powell, the Federal Reserve chair, has called the labor market “unsustainably hot,” and the central bank is raising interest rates to try to cool it. President Biden, who met with Mr. Powell on Tuesday, wrote in an opinion article this week in The Wall Street Journal that a slowdown in job creation “won’t be a cause for concern” but would rather be “a sign that we are successfully moving into the next phase of recovery.”“We want a full and sustainable recovery,” said Claudia Sahm, a former Fed economist who has studied the government’s economic policy response to the pandemic. “The reason that we can’t take the victory lap right now on the recovery — the reason it is incomplete — is because inflation is too high.”But a cooling economy carries its own risks. Despite inflation, the recovery from the pandemic recession has been among the strongest on record, with unemployment falling rapidly and incomes rebounding fastest for those at the bottom. If the recovery slows too much, it could undo much of that progress.“That’s the needle we’re trying to thread right now,” said Harry J. Holzer, a Georgetown University economist. “We want to give up as few of the gains that we’ve made as possible.”Economists disagree about the best way to strike that balance. Mr. Powell, after playing down inflation last year, now says reining it in is his top priority — and argues that the central bank can do so without cutting the recovery short. Some economists, particularly on the right, want the Fed to be more aggressive, even at the risk of causing a recession. Others, especially on the left, argue that inflation, while a problem, is a lesser evil than unemployment, and that the Fed should therefore pursue a more cautious approach.But where progressives and conservatives largely agree is that evaluating the economy will be particularly difficult over the next several months. Distinguishing a healthy cool-down from a worrying stall will require looking beyond the indicators that typically make headlines.“It’s a very difficult time to interpret economic data and to even understand what’s happening with the economy,” said Michael R. Strain, an economist with the American Enterprise Institute. “We’re entering a period where there’s going to be tons of debate over whether we are in a recession right now.”Slower job growth could be good (or bad).The jobs report for May, which the Labor Department will release on Friday, will provide a case study in the difficulty of interpreting economic data right now.Understand Inflation and How It Impacts YouInflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Measuring Inflation: Over the years economists have tweaked one of the government’s standard measures of inflation, the Consumer Price Index. What is behind the changes?Inflation Calculator: How you experience inflation can vary greatly depending on your spending habits. Answer these seven questions to estimate your personal inflation rate.Interest Rates: As it seeks to curb inflation, the Federal Reserve began raising interest rates for the first time since 2018. Here is what that means for inflation.Ordinarily, one number from the monthly report — the overall jobs added or lost — is enough to signal the labor market’s health. That is because most of the time, the driving force in the labor market is demand. If business is strong, employers will want more workers, and job growth will accelerate. When demand lags, then hiring slows, layoffs mount and job growth stalls.Right now, though, the limiting factor in the labor market is not demand but supply. Employers are eager to hire: There were 11.4 million job openings at the end of April, close to a record. But there are roughly half a million fewer people either working or actively looking for work than when the pandemic began, leaving employers scrambling to fill available jobs.The labor force has grown significantly this year, and forecasters expect more workers to return as the pandemic and the disruptions it caused continue to recede. But the pandemic may also have driven longer-lasting shifts in Americans’ work habits, and economists aren’t sure when or under what circumstances the labor force will make a complete rebound. Even then, there might not be enough workers to meet the extraordinarily high level of employer demand.A coffee shop advertised open positions in New York. The limiting factor in the labor market is not demand but supply.Amir Hamja for The New York TimesMost forecasters expect the report on Friday to show that job growth slowed in May. But that number alone won’t reveal whether the mismatch between supply and demand is easing. Slowing job growth coupled with a growing labor force could be a sign that the labor market is coming back into balance as demand cools and supply improves. But the same level of job growth without an increase in the supply of workers could indicate the opposite: that employers are having an even more difficult time finding the help they need.Many economists say they will be watching the labor force participation rate — the share of the population either working or looking for work — just as closely as the headline job growth figures in coming months.“One can unambiguously root for higher labor force participation,” said Jason Furman, a Harvard economist who was an adviser to President Barack Obama. “Beyond that, nothing else is unambiguous.”Wage growth may need to slow.Another number will be getting a lot of attention from economists, policymakers and investors: wage growth.Employers have responded to the hot competition for workers exactly the way Econ 101 says they should, by raising pay. Average hourly earnings were up 5.5 percent in April from a year earlier, more than twice the rate they were rising before the pandemic.Normally, faster wage growth would be good news. Persistently weak pay increases were a bleak hallmark of the long, slow recovery that followed the last recession. But even some economists who bemoaned those sluggish gains at the time say the current rate of wage growth is unsustainable.“That’s something that we’re used to saying pretty unequivocally is good, but in this case it just raises the risk that the economy is overheating further,” said Adam Ozimek, chief economist of the Economic Innovation Group, a Washington research organization. As long as wages are rising 5 or 6 percent per year, he said, it will be all but impossible to bring inflation down to the Fed’s 2 percent target.Inflation F.A.Q.Card 1 of 5What is inflation? More

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    Job Openings Declined Slightly in April From a High Point

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    The labor market may be cooling off, but not by much, according to new data on job openings and turnover.Employers had 11.4 million vacancies in April, according to the Labor Department, down from a revised total of nearly 11.9 million the previous month, which was a record.The April vacancies represented 7 percent of the entire employment base, and left nearly two available jobs for every person looking for work, reflecting continued high demand for labor even as the Federal Reserve begins to tamp it down.The number of people who left their jobs was steady, at six million, also close to the highest number ever recorded, as was the number of people hired, at 6.6 million. The data, gathered on the last business day of April, was reported Wednesday in the Labor Department’s monthly Job Openings and Labor Turnover Survey, or JOLTS report.Employment gaps remain largest in the services sector, where consumers have shifted more of their spending as pandemic restrictions have eased, but they are shrinking. The leisure and hospitality industry had a vacancy rate of 8.9 percent, for example, down from 9.7 percent in March.The State of Jobs in the United StatesThe U.S. economy has regained more than 90 percent of the 22 million jobs lost at the height of pandemic in the spring of 2020.April Jobs Report: U.S. employers added 428,000 jobs and the unemployment rate remained steady at 3.6 percent ​​in the fourth month of 2022.Vacancies: Employers had 11.4 million vacancies in April down from a revised total of nearly 11.9 million the previous month, which was a record.Opportunities for Teenagers: Jobs for high school and college students are expected to be plentiful this summer, and a large market means better pay.Higher Interest Rates: Spurred by red-hot inflation, the Federal Reserve has begun raising interest rates. What does that mean for the job market?The construction and manufacturing industries, however, had the greatest surge in openings. Both reached record highs, showing that demand for housing and goods hasn’t slowed enough to make a dent in available jobs.Wages have escalated rapidly in recent months as employers have competed to fill positions, peaking in March at a 6 percent increase from a year earlier, according to a tracker published by the Federal Reserve Bank of Atlanta. Although not quite fast enough to keep up with inflation, growth has been stronger for hourly workers and those switching jobs. The millions of workers quitting each month tend to find new jobs that pay better, data shows.Employers have struggled to bring workers back from the pandemic, which initially sent labor force participation down to levels not seen since the 1970s, before a wave of women entered the workplace. The economy remains more than a million jobs under its peak employment level in February 2020.Steve Pemberton, chief human resources officer for the employee benefits platform Workhuman, said his firm’s clients gave out 50 percent more monetary awards to their employees in 2021 over the previous year in an effort to increase retention. But he doubts that work force participation will ever reach its prepandemic level given the options available outside traditional employment.“You can’t gig your way to a living wage in some parts of the country,” Mr. Pemberton said. “But for the overwhelming majority of the work force, they might say, ‘Going back to being a full-time employee isn’t something I’m going to do; I’ve found a way to make a living with multiple jobs.’” (The JOLTS report does not capture those working as independent contractors.)Layoffs declined to a low of 1.2 million, indicating that employers are hanging on to as many workers as they can. That number fits with new claims for unemployment insurance, although they’ve been rising since reaching a half-century low in March.Over the weekend, Christopher J. Waller, a Federal Reserve governor, gave a speech explaining how he hoped interest rate increases would slow inflation: by shrinking the number of vacancies without putting too many people out of work.“The unemployment rate will increase, but only somewhat because labor demand is still strong — just not as strong,” Mr. Waller said. “And because when the labor market is very tight, as it is now, vacancies generate relatively few hires.” More

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    Illegal Immigration Is Down, Changing the Face of California Farms

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    Listen to This ArticleTo hear more audio stories from publications like The New York Times, download Audm for iPhone or Android.GONZALES, Calif. — It looks like a century-old picture of farming in California: a few dozen Mexican men on their knees, plucking radishes from the ground, tying them into bundles. But the crews on Sabor Farms’ radish patch, about a mile south of the Salinas River, represent the cutting edge of change, a revolution in how America pulls food from the land.For starters, the young men on their knees are working alongside technology unseen even 10 years ago. Crouched behind what looks like a tractor retrofitted with a packing plant, they place bunches of radishes on a conveyor belt within arm’s reach, which carries them through a cold wash and delivers them to be packed into crates and delivered for distribution in a refrigerated truck.The other change is more subtle, but no less revolutionary. None of the workers are in the United States illegally.Both of these transformations are driven by the same dynamic: the decline in the supply of young illegal immigrants from Mexico, the backbone of the work force picking California’s crops since the 1960s.The new demographic reality has sent farmers scrambling to bring in more highly paid foreign workers on temporary guest-worker visas, experiment with automation wherever they can and even replace crops with less labor-intensive alternatives.“Back in the day, you had people galore,” said Vanessa Quinlan, director of human resources at Sabor Farms. These days, not so much: Some 90 percent of Sabor’s harvest workers come from Mexico on temporary visas, said Jess Quinlan, the farm’s president and Ms. Quinlan’s husband. “We needed to make sure we had bodies available when the crop is ready,” he said.For all the anxiety over the latest surge in immigration, Mexicans — who constitute most of the unauthorized immigrants in the United States and most of the farmworkers in California — are not coming in the numbers they once did.There are a variety of reasons: The aging of Mexico’s population slimmed the cohort of potential migrants. Mexico’s relative stability after the financial crises of the 1980s and 1990s reduced the pressures for them to leave, while the collapse of the housing bubble in the United States slashed demand for their work north of the border. Stricter border enforcement by the United States, notably during the Trump administration, has further dented the flow.“The Mexican migration wave to the United States has now crested,” the economists Gordon Hanson and Craig McIntosh wrote.As a consequence, the total population of unauthorized immigrants in the United States peaked in 2007 and has declined slightly since then. California felt it first. From 2010 to 2018, the unauthorized immigrant population in the state declined by some 10 percent, to 2.6 million. And the dwindling flow sharply reduced the supply of young workers to till fields and harvest crops on the cheap.The state reports that from 2010 to 2020, the average number of workers on California farms declined to 150,000 from 170,000. The number of undocumented immigrant workers declined even faster. The Labor Department’s most recent National Agricultural Workers Survey reports that in 2017 and 2018, unauthorized immigrants accounted for only 36 percent of crop workers hired by California farms. That was down from 66 percent, according to the surveys performed 10 years earlier.The immigrant work force has also aged. In 2017 and 2018, the average crop worker hired locally on a California farm was 43, according to the survey, eight years older than in the surveys performed from 2007 to 2009. The share of workers under the age of 25 dropped to 7 percent from a quarter.The radish harvest at Sabor Farms. “Back in the day, you had people galore,” the company’s human resources director said. Desperate to find an alternative, farms turned to a tool they had largely shunned for years: the H-2A visa, which allows them to import workers for a few months of the year.The visa was created during the immigration reform of 1986 as a concession to farmers who complained that the legalization of millions of unauthorized immigrants would deprive them of their labor force, as newly legalized workers would seek better jobs outside agriculture.But farmers found the H-2A process too expensive. Under the rules, they had to provide H-2A workers with housing, transportation to the fields and even meals. And they had to pay them the so-called adverse effect wage rate, calculated by the Agriculture Department to ensure they didn’t undercut the wages of domestic workers.It remained cheaper and easier for farmers to hire the younger immigrants who kept on coming illegally across the border. (Employers must demand documents proving workers’ eligibility to work, but these are fairly easy to fake.)That is no longer the case. There are some 35,000 workers on H-2A visas across California, 14 times as many as in 2007. During the harvest they crowd the low-end motels dotting California’s farm towns. A 1,200-bed housing facility exclusive to H-2A workers just opened in Salinas. In King City, some 50 miles south, a former tomato processing shed was retrofitted to house them.“In the United States we have an aging and settled illegal work force,” said Philip Martin, an expert on farm labor and migration at the University of California, Davis. “The fresh blood are the H-2As.” Immigrant guest workers are unlikely to fill the labor hole on America’s farms, though. For starters, they are costlier than the largely unauthorized workers they are replacing. The adverse effect wage rate in California this year is $17.51, well above the $15 minimum wage that farmers must pay workers hired locally.So farmers are also looking elsewhere. “We are living on borrowed time,” said Dave Puglia, president and chief executive of Western Growers, the lobby group for farmers in the West. “I want half the produce harvest mechanized in 10 years. There’s no other solution.”Produce that is hardy or doesn’t need to look pretty is largely harvested mechanically already, from processed tomatoes and wine grapes to mixed salad greens and tree nuts. Sabor Farms has been using machines to harvest salad mix for decades.“Processed food is mostly automated,” said Walt Duflock, who runs Western Growers’ Center for Innovation and Technology in Salinas, a point for tech entrepreneurs to meet farmers. “Now the effort is on the fresh side.”“It scares me that they are coming with H-2As and also with robots,” said José Luis Hernández, who emigrated from Mexico as a teenager.“We used to prune the leaves on the vine with our hands, but they brought in the robots last year,” said Ancelmo Zamudio, a vineyard worker.Apples are being grown on trellises for easy harvesting. Scientists have developed genetically modified “high rise” broccoli with long stems to be harvested mechanically. Pruning and trimming of trees and vines is increasingly automated. Lasers have been brought into fields for weeding. Biodegradable “plant tape” packed with seeds and nutrients can now be germinated in nurseries and transplanted with enormous machines that just unspool the tape into the field.A few rows down from the crew harvesting radish bunches at Sabor Farms’ patch, the Quinlans are running a fancy automatic radish harvester they bought from the Netherlands. Operated by three workers, it plucks individual radishes from the ground and spews them into crates in a truck driving by its side.And yet automation has limits. Harvesting produce that can’t be bruised or butchered by a robot remains a challenge. A survey by the Western Growers Center for Innovation and Technology found that about two-thirds of growers of specialty crops like fresh fruits, vegetables and nuts have invested in automation over the last three years. Still, they expect that only about 20 percent of the lettuce, apple and broccoli harvest — and none of the strawberry harvest — will be automated by 2025.Some crops are unlikely to survive. Acreage devoted to crops like bell peppers, broccoli and fresh tomatoes is declining. And foreign suppliers are picking up much of the slack. Fresh and frozen fruit and vegetable imports almost doubled over the last five years, to $31 billion in 2021.Consider asparagus, a particularly labor-intensive crop. Only 4,000 acres of it were harvested across the state in 2020, down from 37,000 two decades earlier. The state minimum wage of $15, added to the new requirement to pay overtime after 40 hours a week, is squeezing it further after growers in the Mexican state of Sinaloa — where workers make some $330 a month — increased the asparagus acreage almost threefold over 15 years, to 47,000 acres in 2020.H-2A workers won’t help fend off the cheaper Mexican asparagus. They are even more expensive than local workers, about half of whom are immigrants from earlier waves that gained legal status; about a third are undocumented. And capital is not rushing in to automate the crop.“There are no unicorns there,” said Neill Callis, who manages the asparagus packing shed at the Turlock Fruit Company, which grows some 300 acres of asparagus in the San Joaquin Valley east of Salinas. “You can’t seduce a V.C. with the opportunity to solve a $2-per-carton problem for 50 million cartons,” he said.While Turlock has automated where it can, introducing a German machine to sort, trim and bunch spears in the packing shed, the harvest is still done by hand — hunched workers walk up the rows stabbing at the spears with an 18-inch-long knife.These days, Mr. Callis said, Turlock is hanging on to the asparagus crop mainly to ensure its labor supply. Providing jobs during the asparagus harvest from February to May helps the farm hang on to its regular workers — 240 in the field and about 180 in the shed it co-owns with another farm — for the critical summer harvest of 3,500 acres of melons.Workers harvested asparagus by hand on a farm in Firebaugh, Calif.Losing its source of cheap illegal immigrant workers will change California. Other employers heavily reliant on cheap labor — like builders, landscapers, restaurants and hotels — will have to adjust.Paradoxically, the changes raking across California’s fields seem to threaten the undocumented local work force farmers once relied on. Ancelmo Zamudio from Chilapa, in Mexico’s state of Guerrero, and José Luis Hernández from Ejutla in Oaxaca crossed into the United States when they were barely in their teens, over 15 years ago. Now they live in Stockton, working mostly on the vineyards in Lodi and Napa.They were building a life in the United States. They brought their wives with them; had children; hoped that they might be able to legalize their status somehow, perhaps through another shot at immigration reform like the one of 1986.Things to them look decidedly cloudier. “We used to prune the leaves on the vine with our hands, but they brought in the robots last year,” Mr. Zamudio complained. “They said it was because there were no people.”Mr. Hernández grumbles about H-2A workers, who earn more even if they have less experience, and don’t have to pay rent or support a family. He worries about rising rents — pushed higher by new arrivals from the Bay Area. The rule compelling farmers to pay overtime after 40 hours of work per week is costing him money, he complains, because farmers slashed overtime and cut his workweek from six days to five.He worries about the future. “It scares me that they are coming with H-2As and also with robots,” he said. “That’s going to take us down.” More

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    ‘I Had to Go Back’: Over 55, and Not Retired After All

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    After leaving the labor force in unusual numbers early in the pandemic, Americans approaching retirement age are back on the job at previous levels.When Kim Williams and millions of other older Americans lost their jobs early in the coronavirus pandemic, economists wondered how many would ever work again — and how that loss would weigh on the economy for years to come.Ms. Williams, now 62, wondered, too, especially when she struggled for months to find work. But in January, she started a new job at an AAA office near her home in Waterbury, Conn.“I’m too young to retire, so I had to go back,” she said.Whether by choice or financial necessity, millions of older Americans have made the same move in recent months. Nearly 64 percent of adults between the ages of 55 and 64 were working in April, essentially the same rate as in February 2020. That’s a more complete recovery than among most younger age groups.

    The rapid rebound has surprised many economists, who thought that fear of the virus — which is far deadlier for older people — would contribute to a wave of early retirements, especially because many people’s savings had been fattened by years of market gains. But there is increasing evidence that the early-retirement narrative was overblown.“The bottom line is that older workers have gone back to work,” said Alicia Munnell, director of the Center for Retirement Research at Boston College. For many people, retiring early was never an option. Ms. Williams spent more than 25 years in manufacturing, working for a Hershey’s plant making Almond Joy and Mounds bars. The job paid reasonably well, and offered a retirement plan and other benefits. But in 2007, Hershey’s closed the factory, moving production partly to Mexico.The State of Jobs in the United StatesThe U.S. economy has regained more than 90 percent of the 22 million jobs lost at the height of pandemic in the spring of 2020.April Jobs Report: U.S. employers added 428,000 jobs and the unemployment rate remained steady at 3.6 percent ​​in the fourth month of 2022.Trends: New government data showed record numbers of job openings and “quits” — a measurement of the amount of workers voluntarily leaving jobs — in March.Job Market and Stocks: This year’s decline in stock prices follows a historical pattern: Hot labor markets and stocks often don’t mix well.Unionization Efforts: Since the Great Recession, the college-educated have taken more frontline jobs at companies like Starbucks and Amazon. Now, they’re helping to unionize them.Ms. Williams, then in her 40s, went back to school, earning an associate degree in hospitality and eventually finding a job as a supervisor at a local hotel. But the position paid significantly less than her factory job, and she drew down her retirement savings to cover medical expenses and other bills. When she was laid off again in June 2020, just a few weeks after her 60th birthday, Ms. Williams had little in savings.Ms. Williams tried to change careers again, this time going back to school to train as a medical secretary. But she has been unable to find work in her new field. In January, with her savings gone, she took a job at AAA for $16.50 an hour, $2 an hour less than she earned at the factory in 2007, before accounting for inflation. She says she will have to work at least until she can start drawing her full Social Security benefits at age 67.“If I could’ve left at 62, I would’ve left at 62, but I can’t,” she said. “Not all of us made that money where I could move down to Florida and get a $400,000 house.”The fastest inflation in decades has added to the pressure on people of all ages to return to work. More recently, so has the turmoil in financial markets, which has taken a bite out of retirement savings.But even some people who could retire are choosing to return to work as the pandemic ebbs.When the Long Island fitness studio where she worked as a spinning instructor shut down early in the pandemic, Jackie Anscher lost both a job and a part of her identity. In an interview with The New York Times that summer, she described what seemed at the time like an abrupt end to her career as “a forced retirement.”But after spending the beginning of the pandemic reorganizing her life and re-evaluating her priorities, Ms. Anscher, 60, has begun teaching spin classes again as a substitute instructor at a local gym, and she is looking for a more regular gig. Her husband is already retired — “he’s been waiting for me to go fishing,” she said — and the couple could afford for her to stop working. But she isn’t ready to hang up her cycling shoes.“I liked what I had. I loved who I was in front of the room,” she said. “It’s about my mental health. For me, it’s about preserving me.”Older workers weren’t any more likely than younger workers to leave the labor force early in the pandemic. But economists had reason to think they might be slower to return. Unemployed workers in their 50s and 60s typically have a harder time finding jobs than their younger counterparts, because of ageism and other factors. And unlike after the 2008-9 recession, when depressed housing prices and high debt levels left many people with little choice but to keep working, in this crisis prices of both homes and financial assets kept rising, providing a financial cushion to some people nearing retirement age.The share of Americans reporting that they were retired did rise sharply in the spring of 2020. But retirement is not an irreversible decision. And research from the Federal Reserve Bank of Kansas City has found that at the pandemic’s onset, there was a steep drop in the number of people leaving retirement to return to work, attributable at least partly to fear of the virus and a lack of job opportunities, swelling the ranks of the retired.As the economy has reopened and the public health situation has improved, these “unretirements” have rebounded and have recently returned roughly to their prepandemic rate, according to an analysis of government data by Nick Bunker of the Indeed Hiring Lab.

    The return of older workers has been concentrated among those in their late 50s and early 60s, people who were still several years or more away from retirement when the pandemic began. The employment rate among those 65 and older fell more sharply and has been much slower to recover. That suggests that the pandemic might have led some people who were already closer to retirement to accelerate those plans, and that the greater health risks they faced may have made them less likely to return to work while the virus continues to circulate. Still, the return of early retirees to the labor force is a reminder that rising wages and abundant job opportunities can draw in workers who might otherwise remain on the sidelines, Mr. Bunker said. The labor force shrank during the last recession, too, and some economists were quick to declare that workers were gone for good. But many people eventually came back during the strong job market that preceded the pandemic: It provided opportunities to people with disabilities and criminal records, to people with little formal education and to people who had taken time away from work to raise children or to care for ailing parents.That pattern may be repeating itself, but on a much more compressed timeline.“Don’t underestimate labor supply,” Mr. Bunker said. “Don’t count out the possibility that people want and need work. It has happened much more quickly than what we saw after the global financial crisis, but the broad principle is the same.”When Tad Greener lost his job managing utilities for a Utah university in late 2019, he wasn’t worried at first about finding a new one — the unemployment rate, after all, was near a 50-year low. But Mr. Greener had hardly begun his search when the pandemic hit and the bottom fell out of the economy. Suddenly, he was 60 years old, unemployed and facing the worst labor market in nearly a century.Mr. Greener eased up on his job search during the first phase of the pandemic, in part because of some health issues unrelated to the coronavirus. By spring of 2021, he was ready to work again, but he had little luck applying for jobs. He thinks many prospective employers were turned off by the combination of his age and his time out of the work force.“It’s a daunting task to be 62 years old, to be unemployed for over a year and to try and find work,” Mr. Greener said. “There were times where I didn’t think I was ever going to be able to go back to work.”As the economy reopened, however, many businesses struggled to hire enough workers to meet the surge in demand. That prompted employers to consider candidates they might otherwise have dismissed, or to look for ways to attract people who could work but weren’t looking.In Mr. Greener’s case, he learned about a new “returnship” program from the State of Utah that was meant to help people who had been out of the labor force get back to work. Last fall, he was accepted into the program, landing a part-time job in the state Office of Energy Development, which quickly turned into a permanent, full-time job. Now that he is back at work, Mr. Greener says he plans to stay until he is 67, or perhaps longer if he stays healthy.“Every day I hear about how there aren’t enough workers available,” Mr. Greener said. “There are a lot of older workers that are being written off, or at least finding it much more difficult to get back into the workplace, who have a lot of years and things to offer.” More

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    What Higher Interest Rates Could Mean for Jobs

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    Layoffs are up only minimally, and employers may be averse to shedding workers after experiencing the challenges of rehiring.The past year has been a busy one for nearly every industry, as a reopening economy has ignited a war for talent. Unless, of course, your business is finding jobs for laid-off workers.“For outplacement, it’s been a very slow time,” said Andy Challenger, senior vice president of the career transition firm Challenger, Gray & Christmas. But lately, he has been getting more inquiries, in a sign that the market might be about to take a turn. “We’re starting to gear up for what we anticipate to be a normalization where companies start to let people go again.”Spurred by red-hot inflation fueled partly by competition for scarce labor, the Federal Reserve has begun raising interest rates in an effort to cool off the economy before it boils over. By design, that means slower job growth — ideally in the form of a steady moderation in the number of openings, but possibly in pink slips, too.It’s not yet clear what that adjustment will look like. But one thing does seem certain: Job losses would have to mount considerably before workers would have a hard time finding new positions, given the backlogged demand.So far, the labor market has revealed some clues about what might lie ahead.Challenger’s data, for example, shows that announced job cuts rose 6 percent in April over the same month in 2021. While still far below levels seen earlier in 2020, it was the first month in 2022 to have a year-over-year increase, and followed a 40 percent jump in March over the previous month. Some of those layoffs were idiosyncratic: More than half the layoffs in health care in the first third of this year resulted from workers’ refusal to obey vaccine mandates, with some of the rest stemming from the end of Covid-19-related programs.But other layoffs seem directly related to the Fed’s new direction. Nearly 8,700 people in the financial services sector lost jobs from January through April, Challenger found, mostly in mortgage banking. Rising rates for home loans have torpedoed demand for refinances, while prospective buyers are increasingly being priced out.Theoretically, a Fed-driven housing slowdown might in turn tamp down demand for construction workers. But builders bounced back strongly after a dip in 2020 and have only accelerated since. The National Association of Home Builders estimates that the industry needs to hire 740,000 people every year just to keep up with retirements and growth. Even if housing starts fell off, homeowners feeling flush as their equity has risen would snap up available workers to add third bedrooms or new cabinets.“A big national builder that’s concentrated in a high-cost market, and all they do is single-family exurban construction, yeah, they may have layoffs,” said the association’s chief economist, Robert Dietz. “But then remodelers would come along and say, ‘Oh, here’s some trained electricians and framers, let’s go get them.’”The National Association of Home Builders estimates that the industry needs to hire 740,000 people every year just to keep up with retirements and growth.Matt Rourke/Associated PressAnother sector that is typically sensitive to the cost of credit is commercial construction, which sustained deep losses as office development came to a screeching halt during the pandemic. Nevertheless, cash-rich clients have plowed ahead with industrial projects like power plants and factories, while federal investment in infrastructure has only begun to make its way into procurement processes.“I think that lending rates might be less important right now,” said Kenneth D. Simonson, chief economist for the Associated General Contractors of America. “An increase in either credit market or bank rates isn’t sufficient to choke off demand for many types of projects.”The tech sector, which feeds on venture capital that is more abundant in low-interest-rate environments, has drooped in recent months. Under pressure to burn less cash, some companies are looking to offshore jobs that before the pandemic they thought needed to be done on site, or at least in the country.“We’ve seen several of our clients in the high-growth technology space quickly shift their focus to reducing cost,” said Bryce Maddock, the chief executive of the outsourcing company TaskUs, discussing U.S. layoffs on an earnings call last week. “Across all verticals, the operating environment has led to an acceleration in our clients’ demand for growth in offshore work and a decrease in demand for onshore work.”In the broader economy, however, any near-term layoffs might occur on account of forces outside the Fed’s control: namely, the exhaustion of federal pandemic-relief spending, and a natural waning in demand for goods after a two-year national shopping spree. That could hit manufacturing and retail, as consumers contemplate their overfilled closets. Spending on long-lasting items has fallen for a couple months in a row, even before adjusting for inflation.If spending on durable goods declines sharply, “I could easily see that creating a recession, because suppliers would be stuck with a massive amount of inventory that they wish they didn’t have, and people employed that they wish they didn’t,” said Wendy Edelberg, director of the Hamilton Project, an economic policy arm of the Brookings Institution. “Even there, it’s going to be hard to know how much was that the Fed raised interest rates, and how much was the extraordinary surge in demand for goods unwinding.”In general, if the Fed’s path of tightening does prompt firms to downsize, that’s likely to be bad news for Black, Hispanic and female workers with less education. Research shows that while a hot labor market tends to bring in people who have less experience or barriers to employment, those workers are also the first to be let go as conditions worsen — across all industries, not just in sectors that might be hit harder by a recession.So far, initial claims for unemployment benefits remain near prepandemic lows, at around 200,000 per week. But some economists worry that they might not be as good a signal of impending trouble in the labor market as they used to be.The share of workers who claim unemployment, known as the “recipiency rate,” has declined in recent decades to only about a third of those who lose jobs. These days, any laid-off workers might be finding new jobs quickly enough that they don’t bother to file. And the pandemic may have further scrambled people’s understanding of whether they’re eligible.“One possibility is that people are going to think that because they haven’t worked long enough, because they switched employers or stopped working for a period of time, that this would make them ineligible, and they’re going to assume that they can’t get it again,” said Kathryn Anne Edwards, a labor economist at the RAND Corporation. (The other possibility is that the temporary supplements to unemployment insurance during the pandemic might have introduced more people to the system, leading to more claims rather than fewer.)One good sign: Employers may have learned from previous recessions that letting people go at the first sign of a downturn can wind up having a cost when they need to staff up again. For that reason, managers are trying harder to redeploy people within the company instead.John Morgan, president of the outplacement firm LHH, said that while he was getting more inquiries from companies preparing to downsize, he did not expect as large a surge as in past cycles.“Even if they’re driving down on profits, a lot of our customers are trying to avoid the ‘fire and rehire’ playbook of the past,” Mr. Morgan said. “How can they invest in upskilling and reskilling and move talent they have inside the organization? Because it’s just really hard to acquire new talent right now, and incredibly expensive.” More