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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

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    Why Union Efforts at Starbucks Have Spread Further Than at Amazon

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    Why has the union campaign spread so much further at the coffee chain than at the e-commerce giant?Roughly six weeks after successful union votes at two Buffalo-area Starbucks stores in December, workers had filed paperwork to hold union elections in at least 20 other Starbucks locations nationwide.By contrast, since the Amazon Labor Union’s victory last month in a vote at a huge warehouse on Staten Island, workers at just one other Amazon facility have filed for a union election — with an obscure union with a checkered past — before promptly withdrawing their petition.The difference may come as a surprise to those who believed that organizing at Amazon might follow the explosive pattern witnessed at Starbucks, where workers at more than 250 stores have filed for elections and the union has prevailed at a vast majority of the locations that have voted.Christian Smalls, the president of the independent Amazon Labor Union, told NPR shortly after the victory that his group had heard from workers in 50 other Amazon facilities, adding, “Just like the Starbucks movement, we want to spread like wildfire across the nation.”The two campaigns share some features — most notably, both are largely overseen by workers rather than professional organizers. And the Amazon Labor Union has made more headway at Amazon than most experts expected, and more than any established union.But unionizing workers at Amazon was always likely to be a longer, messier slog given the scale of its facilities and the nature of the workplace. “Amazon is so much harder a nut to crack,” John Logan, a labor studies professor at San Francisco State University, said by email. The union recently lost a vote at a smaller warehouse on Staten Island.To win, a union must get the backing of more than 50 percent of the workers who cast a vote. That means 15 or 20 pro-union workers can ensure victory in a typical Starbucks store — a level of support that can be summoned in hours or days. At Amazon warehouses, a union frequently would have to win hundreds or thousands of votes.Organizers for the Amazon Labor Union spent hundreds of hours talking with co-workers inside the warehouse during breaks, after work and on days off. They held cookouts at a bus stop outside the warehouse and communicated with hundreds of colleagues through WhatsApp groups.Brian Denning, who leads an Amazon organizing campaign sponsored by the Democratic Socialists of America chapter in Portland, Ore., said his group had received six or seven inquiries a week from Amazon workers and contractors after the Staten Island victory, versus one or two a week beforehand.But Mr. Denning, a former Amazon warehouse employee who tells workers that they are the ones who must lead a union campaign, said that many didn’t realize how much effort unionizing required, and that some became discouraged once he conferred with them.Understand the Unionization Efforts at AmazonBeating Amazon: A homegrown, low-budget push to unionize at a Staten Island warehouse led to a historic labor victory. (Workers at another nearby Amazon facility rejected joining a similar effort shortly after.)Retaliation: Weeks after the landmark win, Amazon fired several managers in Staten Island. Some see it as retaliation for their involvement in the unionization efforts.A New Playbook: The success of the Amazon union’s independent drive has organized labor asking whether it should take more of a back seat.Amazon’s Approach: The company has countered unionization efforts with mandatory “training” sessions that carry clear anti-union messages.“We get people saying how do we get an A.L.U. situation here? How do we do that like they did?” Mr. Denning said, adding: “I don’t want to scare them away. But I can’t lie to workers. This is what it is. It’s not for everyone.”At Starbucks, employees work together in a relatively small space, sometimes without a manager present to supervise them directly for hours at a time. This allows them to openly discuss concerns about pay and working conditions and the merits of a union.At Amazon, the warehouses are cavernous, and workers are often more isolated and more closely supervised, especially during an organizing campaign.“What they would do is strategically separate me from everyone in my department,” said Derrick Palmer, an Amazon employee on Staten Island who is one of the union’s vice presidents. “If they see me interacting with that person, they would move them to a different station.”Asked about the allegation, Amazon said it assigned employees to work stations and tasks based on operational needs.Both companies have accused the unions of their own unfair tactics, including intimidating workers and inciting hostile confrontations.Organizing drivers is an even greater challenge, partly because they are officially employed by contractors that Amazon hires, though labor organizers say they would like to pressure the company to address drivers’ concerns.Christy Cameron, a former driver at an Amazon facility near St. Louis, said the job’s setup largely kept drivers from interacting. At the beginning of each shift, a manager for the contractor briefs drivers, who then disperse to their trucks, help load them and get on the road.“It leaves very little time to talk with co-workers outside of a hello,” Ms. Cameron said in a text message, adding that Amazon’s training discouraged discussing working conditions with fellow drivers. “It was generally how they are highly against unionizing and don’t talk about pay and benefits with each other.”Amazon, with about a million U.S. workers, and Starbucks, with just under 250,000, offer similar pay. Amazon has said that its minimum hourly wage is $15 and that the average starting wage in warehouses is above $18. Starbucks has said that as of August its minimum hourly wage will be $15 and that the average will be nearly $17.Starbucks workers celebrated the results of a vote to unionize in Buffalo last year.Joshua Bessex/Associated PressDespite the similarity in pay, organizers say the dynamics of the companies’ work forces can be quite different.At the Staten Island warehouse where Amazon workers voted against unionizing, many employees work four-hour shifts and commute 30 to 60 minutes each way, suggesting they have limited alternatives.“People who go to that length for a four-hour job — it’s a particular group of people who are really struggling to make it,” said Gene Bruskin, a longtime labor organizer who advised the Amazon Labor Union in the two Staten Island elections, in an interview last month.As a result of all this, organizing at Amazon may involve incremental gains rather than high-profile election victories. In the Minneapolis area, a group of primarily Somali-speaking Amazon workers has staged protests and received concessions from the company, such as a review process for firings related to productivity targets. Chicago-area workers involved in the group Amazonians United received pay increases not long after a walkout in December.Ted Miin, an Amazon worker who is one of the group’s members, said the concessions had followed eight or nine months of organizing, versus the minimum of two years he estimates it would have taken to win a union election and negotiate a first contract.For workers who seek a contract, the processes for negotiating one at Starbucks and Amazon may differ. In most cases, bargaining for improvements in compensation and working conditions requires additional pressure on the employer.At Starbucks, that pressure is in some sense the union’s momentum from election victories. “The spread of the campaign gives the union the ability to win in bargaining,” Mr. Logan said. (Starbucks has nonetheless said it will withhold new pay and benefit increases from workers who have unionized, saying such provisions must be bargained.)At Amazon, by contrast, the pressure needed to win a contract will probably come through other means. Some are conventional, like continuing to organize warehouse employees, who could decide to strike if Amazon refuses to recognize them or bargain. The company is challenging the union victory on Staten Island.But the union is also enlisting political allies with an eye toward pressuring Amazon. Mr. Smalls, the union president, testified this month at a Senate hearing that was exploring whether the federal government should deny contracts to companies that violate labor laws.On Thursday, Senator Bob Casey, a Pennsylvania Democrat, introduced legislation seeking to prevent employers from deducting anti-union activity, like hiring consultants to dissuade workers from unionizing, as a business expense.While many of these efforts may be more symbolic than substantive, some appear to have gotten traction. After the Port Authority of New York and New Jersey announced last summer that it was awarding Amazon a 20-year lease at Newark Liberty International Airport to develop an air cargo hub, a coalition of community, labor and environmental groups mobilized against the project.The status of the lease, which was to become final by late last year, remains unclear. The Port Authority said that lease negotiations with Amazon were continuing and that it continued to seek community input. An Amazon spokeswoman said the company was confident the deal would close.A spokeswoman for Gov. Phil Murphy of New Jersey indicated that the company might have to negotiate with labor groups before the deal could go forward. “The governor encourages anyone doing business in our state to work collaboratively with labor partners in good faith,” the spokeswoman said.Karen Weise More

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    Child-care benefits could help ease the worker crunch, an advocacy campaign says.

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    Almost half of mothers with young children who left the work force cited child care as a reason for the move, according to a survey released Wednesday, and 69 percent of women looking for a job said child-care benefits could sway their decision on where to work.The survey of more than 1,000 workers, by the consulting firm McKinsey & Company and Marshall Plan for Moms, a campaign focused on the economic participation of mothers, adds to research exploring how the lack of child care continues to drag on the economy and tighten an already-hot labor market.“Companies are scrambling for talent,” said Reshma Saujani, who founded Marshall Plan for Moms and Girls Who Code, a nonprofit aimed at closing the gender gap in tech. “Our report shows that you can attract, retain and advance women in the work force only through the provision of offering child-care benefits.”Child care has long been too scarce or too expensive for most families. And during the pandemic, the industry more or less collapsed, as day-care centers struggled to stay open and child-care workers quit en masse.Many executives and child-care activists had hoped that President Biden’s sprawling infrastructure plan would provide support for the industry. But the pared-back bill was signed into law without big investments in child care. Ms. Saujani says the onus is now on the private sector.Most salaried and hourly workers do not have access to child-care benefits. Six percent of hourly workers surveyed and 16 percent of salaried workers said they had access to child-care subsidies. The same percentage of hourly workers, and even fewer salaried workers, reported that their employer provided backup child care or offered pretax flexible spending accounts that could be used to pay for care. About 30 percent of respondents said they had flexible working hours.Ms. Saujani’s campaign is forming a business coalition that includes Patagonia and Archewell, the production company founded by Prince Harry and Meghan, the Duchess of Sussex. To sign on, companies must offer a child-care subsidy or benefit or intend to provide one, Ms. Saujani said. Once they join the coalition, businesses can share and learn best practices from one another.Synchrony, a financial services firm that is part of the coalition, found that offering its employees creative child-care options led to a surge in job satisfaction and an influx of applications for job openings, said Carol Juel, the company’s chief technology and operating officer.In the summer of 2020, the company created a virtual summer camp, putting high school and college children of their employees in charge of keeping 3,700 campers occupied in exchange for mentorship training and college credit. And the company would “send out, every Friday, the next week’s schedule so that workers could plan their meetings around this,” Ms. Juel said.Fast Retailing USA, which operates apparel brands including Uniqlo, Theory and Helmut Lang and is also part of the coalition, has started offering monthly child-care stipends of up to $1,000 for many employees, including store managers. The money can be spent in any way they see fit rather than being tied to specific providers.“A lot of the people who were involved in sponsoring this policy, myself included and some of our heads of human resources, all have kids the same age,” said Serena Peck, Fast Retailing’s chief administrative officer and general counsel. They were seeing firsthand how “the market was shrinking for good child care” and “felt like we had to do something.” More

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    For Tens of Millions of Americans, the Good Times Are Right Now

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    Their houses are piggy banks, their retirement accounts are up and their bosses are eager to please. When the boom ends, everything will change.This is an era of great political division and dramatic cultural upheaval. Much more quietly, it has been a time of great financial reward for a large number of Americans.For the 158 million who are employed, prospects haven’t been this bright since men landed on the moon. As many as half of those workers have retirement accounts that were fattened by a prolonged bull market in stocks. There are 83 million owner-occupied homes in the United States. At the rate they have been increasing in value, a lot of them are in effect a giant piggy bank that families live inside.This boom does not get celebrated much. It was a slow-build phenomenon in a country where news is stale within hours. It has happened during a time of fascination with the schemes of the truly wealthy (see: Musk, Elon) and against a backdrop of increased inequality. If you were unable to buy a house because of spiraling prices, the soaring amount of homeowners’ equity is not a comfort.The queasy stock market might be signaling that the boom is ending. A slowing economy, renewed inflation, high gas prices and rising interest rates could all undermine the gains achieved over the years. But for the moment, this flood of wealth is quietly redefining retirement, helping fuel Silicon Valley and stoking a boom in leisure and entertainment. It is boosting corporate profits by unprecedented amounts while also giving just about everyone the notion that a better job might be within reach.More than 4.5 million workers voluntarily quit in March, the highest number since the government started keeping this statistic in 2000, the Bureau of Labor Statistics reported last week. A few years ago, the monthly total was between three million and 3.5 million.“Maybe it’s easier to focus on the negative, but a huge number of people, maybe 40 million households, have been doing pretty well,” said Dean Baker, an economist who was a co-founder of the liberal-leaning Center for Economic and Policy Research. “You’d have to go back to the late 1990s to find a similar era. Before that, the 1960s.”This widespread wealth throws light on why the number of workers who say they expect to be working past their early 60s has fallen below 50 percent for the first time. It accounts for the abundance of $1 billion start-ups known as unicorns — more than 1,000 now, up from about 200 in 2015. It offers a reason for the rise in interest in unionizing companies from Amazon to Apple to Starbucks, as hourly workers seek to claim their share.And it helps explain why Dwight and Denise Makinson just returned from a 12-day cruise through Germany.“Our net worth has reached the millionaire level due to our investments, which was unfathomable when we were married 40 years ago,” said Mr. Makinson, 76, who is retired from the U.S. Forest Service.The couple, who live in Coeur d’Alene, Idaho, have company. There are 22 million U.S. millionaires, Credit Suisse estimates, up from fewer than 15 million in 2014.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.“I used coupons to buy things. One of my daughters would say, ‘Mom, that’s so embarrassing,’” said Ms. Makinson, 66, a registered nurse. “But we believed in saving. Now she uses coupons, too.”Denise and Dwight Makinson in their backyard in Coeur d’Alene, Idaho. Their net worth has reached the millionaire level.Margaret Albaugh for The New York TimesEvery economic transaction has several sides. No one thought home prices in 2000 were particularly cheap. But in the last six years, prices have risen by the total value of all housing in 2000, according to the Case-Schiller index. In many areas of the country, it has become practically impossible for renters to buy a house.This is fracturing society. Even as the overall homeownership rate in 2020 rose to 65.5 percent, the rate for Black Americans has severely lagged. At 43.4 percent, it is lower than the 44.2 percent in 2010. The rate for Hispanics is only marginally better.That disparity might account for the muted sense of achievement.“It’s a time of prosperity, a time of abundance, and yet it doesn’t seem that way,” said Andy Walden, vice president of enterprise research at Black Knight, which analyzes financial data.Shawn and Stephanie McCauley said the value of their house 20 miles north of Seattle had shot up 50 percent since they bought it a few years ago, a jump that was typical of the market.“We are very fortunate right now given the situation for many others during the pandemic,” said Mr. McCauley, 36, who works for a data orchestration company. “Somehow we are doing even better financially, and it feels a bit awkward.”Even for those doing well, the economy feels precarious. The University of Michigan’s venerable Index of Consumer Sentiment fell in March to the same levels as 1979, when the inflation rate was a painful 11 percent, before rising in April.Politicians are mostly quiet about the boom.“Republicans are not anxious to give President Biden credit for anything,” said Mr. Baker, the economist. “The Democrats could boast about how many people have gotten jobs, and the strong wage growth at the bottom, but they seem reluctant to do this, knowing that many people are being hit by inflation.”The initial coronavirus outbreak ended the longest U.S. economic expansion in modern history after 128 months. A dramatic downturn began. The federal government stepped in, generously spreading cash around. Spending habits shifted as people stayed home. The recession ended after two months, and the boom resumed.Jerome H. Powell, the Federal Reserve chair, recently warned that there were too many employers chasing too few workers, saying the labor market was “tight to an unhealthy level.” But for workers, it’s gratifying to have the upper hand in looking for a new position or career.“Both my husband and I have been able to make job changes that have doubled our income from five years ago,” said Lindsay Bernhagen, 39, who lives in Stevens Point, Wis., and works for a start-up. “It feels like it has mostly been dumb luck.”A decade ago, the housing market was in chaos. Between 2007 and 2015, more than seven million homes were lost to foreclosure, according to Black Knight. Some of these were speculative purchases or second homes, but many were primary residences. Egged on by lenders, people lived in houses they could not easily afford.Now the reverse is true. People own much more of their homes than they used to, while the banks own less. That acts as a shield against foreclosures, which in 2019 were only 144,000, according to Black Knight. (During the pandemic, foreclosures mostly ceased due to moratoriums.)The equity available to homeowners reached nearly $10 trillion at the end of 2021, double what it was at the height of the 2006 bubble, according to Black Knight. For the average American mortgage holder, that amounts to $185,000 before hitting loan-to-value tripwires. The figure is up $48,000 in a year — about what the average American family earns annually, according to some estimates.Even very new homeowners feel an economic boost.“We never had enough for a down payment, but then in summer of 2020, we got a good tax return, a stimulus check and had a little money in the bank,” said Magaly Pena, 41, an architect for the federal government. She and her husband bought a townhouse in the Miami suburb of Homestead.Ms. Pena, a first-generation immigrant from Nicaragua, likes to check out the estimated value of her house and her neighbors on the real estate website Redfin. “Sometimes I’ll check it every day for three days,” she said. “It’s been crazy — everything has skyrocketed.”In 2006, homeowners cashed in their equity. Sometimes they used the money to double down on another house or two. In 2022, there’s little sense of excess. One reason is that lenders and the culture in general are no longer so encouraging about that sort of refinancing. But owners are also more cautious.Brian Carter, an epidemiologist in Atlanta, said he and his wife, Desiree, had about $250,000 in equity in their home but didn’t plan to draw on it.“I was 27 in 2007 and watched a lot of people lose their houses because they couldn’t leave their equity alone,” he said. “That included my next-door neighbor and the family across the street. I don’t want to worry.”Those who take a boom for granted often get upstaged by reality. In May 2000, the entrepreneur Kurt Andersen said raising money for a media start-up called Inside was as easy “as getting laid in 1969.” That was a few weeks after the stock market peaked. Seventeen months and one merger later, Inside shut down. (Mr. Andersen clarified in an email that he did not actually have sex until the 1970s.)In 2000, the start-up downturn was the first sign of wider economic trouble. This time it may be simply that people are doing too well. “U.S. households in best shape in 30 years … but does it matter?” Deutsche Bank asked in a research note last month.Its logic: Households have more cash than debt for the first time in decades, which is theoretically good. But all that money is encouraging spending, which is propelling inflation, which is forcing the Fed to push up interest rates. The result: a recession late next year.Ashley Humphries, 31, feels prepared for most any scenario. Six years ago, she was a graduate teaching assistant making $12,000 a year. Now she earns a low six figures as a senior product manager for a parking app developer in Atlanta.“I’ve lived out some childhood dreams like dyeing my hair vibrant colors and seeing ‘Phantom of the Opera’ from the front row,” Ms. Humphries said. She got a dog named Kylo, put a bit of her income in the stock market and bought a Tesla. She just left on a Caribbean cruise. Two of them, in fact, one after the other.Ashley Humphries and Kylo. “I’ve lived out some childhood dreams,” she said.Kendrick Brinson for The New York Times More

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    April Jobs Report: Gain of 428,000 Shows Vibrant Labor Market

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    The Labor Department reported a gain of 428,000 jobs in April, along with a 5.5 percent increase in average hourly earnings from a year earlier.The U.S. economic rebound from the pandemic’s devastation held strong in April with another month of solid job growth.Employers added 428,000 jobs, matching the previous month, the Labor Department reported Friday, with the growth broad-based across every major industry.The unemployment rate remained 3.6 percent, just a touch above its level before the pandemic, when it was the lowest in half a century.The challenge of a highly competitive labor market for employers — a shortage of available workers — persisted as well. In fact, the report showed a decline of 363,000 in the labor force.The economy has regained nearly 95 percent of the 22 million jobs lost at the height of coronavirus-related lockdowns two years ago. But the labor supply has not kept up with a record wave of job openings as businesses expand to match consumers’ continued willingness to buy a variety of goods and services. There are now 1.9 job openings for every unemployed worker.The hiring scramble has driven up wages, and employers are largely passing on that expense, helping fuel inflation that Americans have cited as their leading economic concern. On that front, Friday’s report showed an easing in the acceleration of average hourly earnings, which increased 0.3 percent from the month before, after a 0.5 percent gain in March.President Biden pointed to the latest data as evidence of “the strongest job creation economy in modern times,” a message the White House is increasingly amplifying ahead of the congressional elections.The unemployment rate stayed under 4 percent in April.The share of people who have looked for work in the past four weeks or are temporarily laid off, which does not capture everyone who lost work because of the pandemic. More

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    The Fed Wants to Fight Inflation Without a Recession. Is It Too Late?

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    Federal Reserve officials took a while to recognize that inflation was lasting. The question is whether they can tame it gently now.The Federal Reserve is poised to set out a path to rapidly withdraw support from the economy at its meeting on Wednesday — and while it hopes it can contain inflation without causing a recession, that is far from guaranteed.Whether the central bank can gently land the economy is likely to serve as a referendum on its policy approach over the past two years, making this a tense moment for a Fed that has been criticized for being too slow to recognize that America’s 2021 price burst was turning into a more serious problem.The Fed chair, Jerome H. Powell, and his colleagues are expected to raise interest rates half a percentage point on Wednesday, which would be the largest increase since 2000. Officials have also signaled that they will release a plan for shrinking their $9 trillion balance sheet starting in June, a policy move that will further push up borrowing costs.That two-front push to cool off the economy is expected to continue throughout the year: Several policymakers have said they hope to get rates above 2 percent by the end of 2022. Taken together, the moves could prove to be the fastest withdrawal of monetary support in decades.The Fed’s response to hot inflation is already having visible effects: Climbing mortgage rates seem to be cooling some booming housing markets, and stock prices are wobbling. The months ahead could be volatile for both markets and the economy as the nation sees whether the Fed can slow rapid wage growth and price inflation without constraining them so much that unemployment jumps sharply and growth contracts.“The task that the Fed has to pull off a soft landing is formidable,” said Megan Greene, chief global economist at the Kroll Institute, a research arm of the Kroll consulting firm. “The trick is to cause a slowdown, and lean against inflation, without having unemployment tick up too much — that’s going to be difficult.”Optimists, including many at the Fed, point out that this is an unusual economy. Job openings are plentiful, consumers have built up savings buffers, and it seems possible that growth will be resilient even as business conditions slow somewhat.Understand Inflation in the U.S.Inflation 101: What is inflation, why is it up and whom does it hurt? Our guide explains it all.Your Questions, Answered: Times readers sent us their questions about rising prices. Top experts and economists weighed in.Interest Rates: As it seeks to curb inflation, the Federal Reserve announced that it was raising interest rates for the first time since 2018.How Americans Feel: We asked 2,200 people where they’ve noticed inflation. Many mentioned basic necessities, like food and gas.Supply Chain’s Role: A key factor in rising inflation is the continuing turmoil in the global supply chain. Here’s how the crisis unfolded.But many economists have said cooling price increases down when labor is in demand and wages are rising could require the Fed to take significant steam out of the job market. Otherwise, firms will continue to pass rising labor costs along to customers by raising prices, and households will maintain their ability to spend thanks to growing paychecks.“They need to engineer some kind of growth recession — something that raises the unemployment rate to take the pressure off the labor market,” said Donald Kohn, a former Fed vice chair who is now at the Brookings Institution. Doing that without spurring an outright downturn is “a narrow path.”Fed officials cut interest rates to near-zero in March 2020 as state and local economies locked down to slow the coronavirus’s spread at the start of the pandemic. They kept them there until March this year, when they raised rates a quarter point.But the Fed’s balance-sheet approach has been the more widely criticized policy. The Fed began buying government-backed debt in huge quantities at the outset of the pandemic to calm bond markets. Once conditions settled, it bought bonds at a pace of $120 billion, and continued making purchases even as it became clear that the economy was healing more swiftly than many had anticipated and inflation was high.Late-2021 and early-2022 bond purchases, which are what critics tend to focus on, came partly because Mr. Powell and his colleagues did not initially think that inflation would become longer lasting. They labeled it “transitory” and predicted that it would fade on its own — in line with what many private-sector forecasters expected at the time.When supply chain disruptions and labor shortages persisted into the fall, pushing up prices for months on end and driving wages higher, central bankers reassessed. But even after they pivoted, it took time to taper down bond buying, and the Fed made its final purchases in March. Because officials preferred to stop buying bonds before lifting rates, that delayed the whole tightening process.The central bank was trying to balance risks: It did not want to quickly withdraw support from a healing labor market in response to short-lived inflation earlier in 2021, and then officials did not want to roil markets and undermine their credibility by rapidly reversing course on their balance sheet policy. They did speed up the process in an attempt to be nimble.Under Jerome H. Powell, the Fed, which meets on Wednesday, is trying to walk a thin line.Nate Palmer for The New York Times“In hindsight, there’s a really good chance that the Fed should have started tightening earlier,” said Karen Dynan, an economist at the Harvard Kennedy School and a former Treasury Department chief economist. “It was really hard to judge in real time.”Nor was the Fed’s policy the only thing that mattered for inflation. Had the Fed begun to pull back policy support last year, it might have slowed the housing market more quickly and set the stage for slower demand, but it would not have fixed tangled supply chains or changed the fact that many consumers have more cash on hand than usual after repeated government relief checks and months spent at home early in the pandemic.Inflation F.A.Q.Card 1 of 6What is inflation? More

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    Starbucks Plans Wage Increases That Won’t Apply to Unionized Workers

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    Starbucks announced Tuesday that it was raising pay and expanding training at corporate-owned locations in the United States. But it said the changes would not apply to the recently unionized stores, or to stores that may be in the process of unionizing, such as those where workers have filed a petition for a union election.On a call with investors to discuss the company’s quarterly earnings, the chief executive, Howard Schultz, said that the spending would bring investments in workers and stores to nearly $1 billion for the fiscal year and that it would help Starbucks keep up with customer traffic.“The investments will enable us to handle the increased demand — and deliver increased profitability — while also delivering an elevated experience to our customers and reducing strain on our partners,” Mr. Schultz said, using the company’s term for employees.The initiative was announced as the union has won initial votes at more than 50 Starbucks stores, including several this week.The pay increases follow a commitment to raise the company’s minimum hourly wage to $15 this summer and will include a raise of at least 5 percent for employees with two to five years of experience, or an increase to 5 percent above the starting wage rate in their market, whichever is greater.Employees with more than five years’ experience will receive a raise of at least 7 percent, or an increase to 10 percent above the starting wage in their market, whichever is greater.The company will also increase pay for store managers.The plans also call for doubling the training hours that new baristas receive, as well as additional training for existing baristas and shift supervisors.In a formal charge filed with the National Labor Relations Board, the union representing the newly unionized Starbucks workers — Workers United, an affiliate of the Service Employees International Union — has accused the company of coercing employees who were voting in a union election by suggesting that it would withhold new benefits if they unionized.The company said it was legally prohibited from unilaterally imposing wage and benefit increases in stores where employees have unionized or will soon vote on unionization. It noted that it must bargain with a union over any wage or benefit changes.But labor law experts said that it could be illegal to withhold wages and benefits from only unionized employees or employees voting on a union.Matthew Bodie, a former lawyer for the labor board who teaches law at Saint Louis University, said the announced pay increases could unlawfully taint the so-called laboratory conditions that are supposed to prevail during a union election by giving employees an incentive not to unionize.“If Starbucks said, ‘Drop the union campaign and you’ll get this wage increase and better benefits,’ that’d clearly be illegal,” Mr. Bodie said by email. “Hard to see how this is that much different in practice.”Mr. Bodie said the pay increases could also amount to a violation of the company’s obligation to bargain in good faith because they suggest an intention to give unionized employees a worse deal than nonunionized employees. “They’d have to at least offer this package to the union,” Mr. Bodie added.Reggie Borges, a Starbucks spokesman, did not say whether the company would make the same proposals announced Tuesday in negotiations with unionized workers but said, “Where Starbucks is required to engage in collective bargaining, Starbucks will always negotiate in good faith.”Starbucks also said it planned to post leaflets in stores to keep employees informed, in which the company says that the outcome of collective bargaining is uncertain and risky. “Through collective bargaining, wages, benefits and working conditions may improve, diminish or stay the same,” says one of the informational sheets to be posted in stores.Such messaging is common among employers facing union campaigns, but labor experts say it is misleading because workers are highly unlikely to see their compensation drop as a result of collective bargaining. More

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    Job Openings in U.S. Rose to Record in March

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    A government survey released Tuesday showed a record number of job openings, with 11.5 million positions listed as available in March, underscoring the continuing strength of the labor market.The number of “quits” — a measurement of the amount of workers voluntarily leaving jobs — also reached a high, an indicator that many workers are confident they can leave their jobs and find employment that better suits their desires or needs.The data released by the Labor Department as part of its monthly Job Openings and Labor Turnover Survey, or JOLTS report, is a fresh indicator of the anomalous nature of the economy as it recovers from the pandemic recession. A resurgence of household spending and business investment is colliding with a messy reordering of the supply of goods and labor.Labor force participation has quickly recovered, nearing prepandemic rates, but has failed to keep up with the surge in job opportunities over the past year as business owners expand to meet the demand for a variety of goods and services.After a sharp climb last year, job openings plateaued somewhat. The March reading suggests that the decline in acute coronavirus concerns among experts and the average consumer — paired with the rolling back of public health restrictions and the start of the summer hiring season — is increasing businesses’ appetites for more workers. Layoffs and discharges remained uncommon, and relatively flat compared to the previous month, at 1.4 million.The Federal Reserve is raising the cost of borrowing as part of an effort to cool consumer spending, business lending and demand for workers. Markets expect the Fed to announce a half-percentage point increase in its benchmark interest rate on Wednesday.The State of Jobs in the United StatesJob openings and the number of workers voluntarily leaving their positions in the United States remained near record levels in March.March Jobs Report: U.S. employers added 431,000 jobs and the unemployment rate fell to 3.6 percent ​​in the third month of 2022.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.New Career Paths: For some, the Covid-19 crisis presented an opportunity to change course. Here is how these six people pivoted professionally.Return to the Office: Many companies are loosening Covid safety rules, leaving people to navigate social distancing on their own. Some workers are concerned.Andrew Patterson, a senior international economist in Vanguard’s Investment Strategy Group, argued this strong report from the Labor Department on the eve of the central bank’s rate decision gives officials “more cover to continue to raise rates” and remove its longstanding financial support of the economy “expeditiously,” as the Fed chair, Jerome H. Powell, has said in recent weeks.Overall, even in an environment of higher borrowing costs, the remarkably robust desire among businesses to expand their work forces could help economic activity plow through the twin challenges presented by inflation, which is at a 40-year high, and the discombobulation of global supply chains compounded by coronavirus outbreaks in Asia and war in Eastern Europe.“If there’s something that’s going to cause a recession, it will be from some outside, exogenous shock,” said Nick Bunker, an economist at the Indeed Hiring Lab, a group that analyzes world labor markets. “It won’t be household spending.”Anonymized credit card data collected by Bank of America shows that even households with an annual income below $50,000 have about twice the savings they did before the pandemic. Still, a Gallup survey released last week found 46 percent of Americans rated their personal finances positively, down from 57 percent last year, when families were freshly benefiting from rounds of federal aid and inflation remained tame.Employers have been rankled, too, complaining of labor shortages as millions of workers — energized by the discussion about “essential work” during the pandemic and buoyed by savings — experience a degree of bargaining power they haven’t had in decades.That has led to a tense, politically charged dynamic in which wage pressures are a broadening complaint among large and small businesses trying to maintain their profit margins, even though jumps in pay haven’t generally kept up with price increases.“We’re learning a lot about how structurally fragile our economy is,” said Claudia Sahm, a former Federal Reserve economist. She cited a dependence on “endless low-wage workers and just-in-time supplies of goods” for keeping consumer prices depressed for many years.The employment cost index, which tracks wages and benefits, jumped by the most on record in the first quarter of this year, according to Labor Department figures released last week. Still, a recent analysis by the Economic Policy Institute, a left-leaning think tank in Washington, concluded that roughly 54 percent of the overall increase in prices in the nonfinancial corporate sector since the second quarter of 2020 could be attributed to an expansion of profit margins, while labor costs were responsible for less than 8 percent of price increases. The analysis indicates that 38 percent of the uptick stems from nonlabor input costs, such as overhead, fuel or raw materials.That data complicates the increasingly popular narrative that the spikes in worker pay are mostly to blame for the severity of price increases, rather than a wider mix of reasons.“Normally, you’d expect profits to decrease during a period of high inflation,” said Tony Roth, the chief investment officer of Wilmington Trust Investment Advisors, an arm of M&T Bank. The reason the opposite has happened for many companies over the last couple of years is, he said, straightforward: “Businesses are doing it because they can get away with it.”The economy, while strong, may be locked in a vexing, self-reinforcing cycle for a while: The continued wave of household spending has often signaled to businesses that they had room to raise prices without consequence — allowing executives to hire more workers while maintaining profitability.Until more consumers balk at heightened price levels, it’s unclear where prices and demand will find an equilibrium.Mr. Roth said his financial firm, like most others, was advising clients to invest in companies that still had a large amount of “pricing power” — meaning that they can raise prices without dampening demand for what they sell, either because the good or service is particularly desirable or because it is essential to the buyers’ life routines or business needs. More