Layoffs and Job Reductions

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    In New York City, Pandemic Job Losses Linger

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    Even as the country as a whole has recovered all of the jobs it lost during the pandemic, the city is still missing 176,000 — the slowest recovery of any major metropolitan area.The darkest days of the pandemic are far behind New York City. Masks are coming off, Times Square is packed with tourists and Midtown Manhattan lunch spots have growing lines of workers in business suits. Walking around the city, it often feels like 2019 again.But the bustling surface obscures a lingering wound from the pandemic. While the country as a whole has recently regained all of the jobs it lost early in the health crisis, New York City is still missing 176,000, representing the slowest recovery of any major metropolitan area, according to the latest employment data.New York relies more than other cities on international tourists, business travelers and commuters, whose halting return has weighed on the workers who cater to them — from bartenders and baggage handlers, to office cleaners and theater ushers. A majority of the lost private sector jobs have been concentrated in the hospitality and retail industries, traditional pipelines into the work force for younger adults, immigrants and residents without a college degree.By contrast, overall employment in industries that allow for remote work, such as the technology sector, is back at prepandemic levels.The lopsided recovery threatens to deepen inequality in a city where apartment rents are soaring, while the number of residents receiving temporary government assistance has jumped by almost a third since February 2020. As New York emerges from the pandemic, city leaders face the risk of an economic rebound that leaves thousands of blue-collar workers behind.“The real damage here is that many of the industries with the most accessible jobs are the ones that are still struggling to fully recover,” said Jonathan Bowles, the executive director of the Center for an Urban Future, a public policy think tank.New York City was hit particularly hard by the first wave of the virus, prompting business closures and employer vaccine mandates that were among the longest and strictest in the country. Part of the reason for New York’s lagging recovery is that it lost one million jobs in the first two months of the pandemic, the most of any city. More recently, New York City has regained jobs at a rapid clip. The technology sector actually added jobs in the first 18 months of the pandemic, a period when almost every other industry shrank.But job growth slowed this summer in sectors like hotels and restaurants compared with a year ago, while businesses in technology, health care and finance increased employment at a faster pace over the same period, according to an analysis by James Parrott, an economist at the Center for New York City Affairs at the New School.After being laid off from her restaurant job early in the pandemic, Desiree Obando, 35, chose not to return, enrolling instead in community college.Andrew Seng for The New York TimesIn July, the city’s unemployment rate was 6.1 percent, compared with 3.5 percent in the country overall that month.At the height of the pandemic, Ronald Nibbs, 47, was laid off as a cleaner at an office building in Midtown Manhattan, where he had worked for seven years. Mr. Nibbs, his girlfriend and his two children struggled on unemployment benefits and food stamps.He secured temporary positions, but the work was spotty with few people back in offices. He did not want to switch careers, hoping to win his old position back. He began to drink heavily to deal with the anxiety of unemployment.In May, his building finally called him back to work. “When I got that phone call, I wanted to cry,” Mr. Nibbs said.There are 1,250 fewer office cleaners in the city now than there were before the pandemic, according to Local 32BJ of the Service Employees International Union.Last month, New York officials cut their jobs growth forecast for 2022 to 4.3 percent, from 4.9 percent, saying the state was not expected to reach prepandemic levels of employment until 2026. Officials cited the persistence of remote work and the migration of city residents away from the state as a long-term risk to employment levels.The number of tourists visiting New York City this year is expected to rebound to 85 percent of the level in 2019, a year in which a record 66.6 million travelers arrived, according to forecasts from NYC & Company, the city’s official tourism agency.However, according to the agency, visitors to the city are spending less money overall because those who have historically stayed longer — business and international travelers — have not returned at the same rates. This has hurt department stores that depend on high-spending foreign visitors, as well as hotels that rely on business travelers to book conferences and banquets.Ilialy Santos, 47, returned to her job as a room attendant this month at the Paramount Hotel in Times Square, which is reopening for the first time since March 2020. The hotel had been a candidate to be converted into affordable housing, but the plan was opposed by a local union, the New York Hotel and Gaming Trades Council, in order to save jobs.Ms. Santos said she could not find any employment for two years, falling behind every month on her bills. The hotel union provided a $1,000 payment to her landlord to help cover her rent.“I’m excited to be going back to work, getting back to my normal life and becoming more stable,” Ms. Santos said.Despite the city’s elevated unemployment rate, many employers say they are still struggling to find workers, especially in roles that cannot be done remotely. The size of the work force has also dropped, declining by about 300,000 people since February 2020.The number of tourists visiting New York City in 2022 is expected to rebound to 85 percent of the level in 2019, a year in which a record 66.6 million travelers came to the city.Christopher Lee for The New York TimesSome blue-collar employees who lost their jobs early in the pandemic are now holding out for positions that would allow them to work from home.Jade Campbell, 34, has been out of work since March 2020, when the pandemic temporarily shuttered the Old Navy store where she had worked as a sales associate. When the store called her back in the fall, she was in the middle of a difficult pregnancy, with a first-grade son who was struggling to focus during online classes. She decided to stay home, applying for different types of government assistance.Ms. Campbell now lives on her own in Queens without child care support; her children are 1 and 8 years old. She has refused to get vaccinated against Covid-19, a prerequisite in New York City for many in-person jobs. Still, she said she felt optimistic about applying for remote customer service roles after she reached out to Goodwill NYNJ, a nonprofit, for help with her résumé.“I got two kids I know I have to support,” she said. “I can’t really depend on the government to help me out.”At Petri Plumbing & Heating in Bay Ridge, Brooklyn, several workers quit over the city’s policy that employees of private businesses be fully vaccinated. The restriction was the most stringent in the country when it was announced in December 2021 at the end of Mayor Bill de Blasio’s term.After Mayor Eric Adams signaled earlier this year that his administration would not enforce the mandate, Michael Petri, the company’s owner, offered to rehire three former workers. One returned, another had found another job and the third had moved to another state, he said.Thanks to a $50 hourly wage and monthly bonuses, current job openings at Petri Plumbing have attracted a flood of applicants. In a shift from before the pandemic, Mr. Petri said he now has to wade through more applicants with no plumbing experience.The strongest candidates often have too many driving infractions to be put on the company’s insurance policy, he said. But recently, Mr. Petri was so desperate to hire a mechanic with too many infractions that he recruited a young worker just to drive him.“This is without a doubt one of the more difficult times we have faced,” said Mr. Petri, whose family started the company in 1906.The disruptions have set the city’s youngest workers back the most. The unemployment rate for workers ages 16 to 24 is 20.7 percent.After graduating from high school in 2020, Simone Ward enrolled in community college but dropped out after a few months, feeling disengaged from online classes.Ms. Ward, 20, signed up for a cooking program with Queens Community House, a nonprofit organization, which allowed her to get a part-time job preparing steak sandwiches at Citi Field during baseball games. But the scheduling was inconsistent, and the job required a 90-minute commute on three subway lines from her home in Brooklyn’s Canarsie neighborhood.She applied for data entry jobs that would allow her to work remotely, but never heard back. She remembered interviewing for a job at an Olive Garden restaurant and recognizing in the moment that she was flailing, her social skills diminished by the isolation of lockdown.“The pandemic feels like it set my life back five steps,” she said. New York officials have cited the persistence of remote work and the migration of workers to other states as long-term risks to employment levels.Hiroko Masuike/The New York TimesFor Desiree Obando, 35, losing her job at a restaurant in Manhattan’s West Village early in the pandemic nudged her to leave the hospitality industry after 12 years. When the restaurant group she used to work for asked her to come back a few months later, she had already enrolled at LaGuardia Community College, returning to school after dropping out twice before, with the goal of becoming a high school counselor.She is now working a part-time job at an education nonprofit that pays $20 an hour, less than her hospitality job. But the work is close to her home in East Harlem, giving her the flexibility to pick up her daughter whenever the school has virus exposures.Ms. Obando is hopeful that she will eventually get an income boost after she completes her master’s degree.“There’s nothing like the pandemic to put things in perspective,” Ms. Obando said. “I made the right choice for me and my family. More

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    From Boom to Gloom: Tech Recruiters Struggle to Find Work

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    Seemingly overnight, the tech industry flipped from aggressive growth, hiring sprees, lavish perks and boundless opportunity to layoffs, hiring freezes and doing more with less.Nora Hamada, a 35-year-old who works with recruiters who hire employees for tech companies, is trying to be optimistic. But the change upended her online business, Recruit Rise, which teaches people how to become recruiters and helps them find jobs.In June, after layoffs trickled through tech companies, Ms. Hamada stopped taking new customers and shifted her focus away from high-growth start-ups. “I had to do a 180,” she said. “It was an emotional roller coaster for sure.”Throughout the tech industry, professional hirers — the frontline soldiers in a decade-long war for tech talent — are reeling from a drastic change of fortune.For years during an extraordinary tech boom, recruiters were flush with work. As stock prices, valuations, salaries and growth soared, companies moved quickly to keep up with demand and beat competitors to the best talent. Amy Schultz, a recruiting lead at the design software start-up Canva, marveled on LinkedIn last year that there were more job postings for recruiters in tech — 364,970 — than for software engineers — 342,586.But this year, amid economic uncertainty, tech companies dialed back. Oracle, Tesla and Netflix laid off staff, as did Peloton, Shopify and Redfin. Meta, Google, Microsoft and Intel made plans to slow hiring or freeze it. Coinbase and Twitter rescinded job offers. And more than 580 start-ups laid off nearly 77,000 workers, according to Layoffs.fyi, a crowdsourced site that tracks layoffs.The pain was acute for recruiters. Robinhood, the stock trading app that was hiring so quickly last year that it acquired Binc, an 80-person recruiting firm, underwent two rounds of layoffs this year, cutting more than 1,000 employees.Now some recruiters are adapting from blindly filling open jobs, known as a “butts in seats” strategy, to having “more formative” conversations with companies about their values. Others are cutting their rates as much as 30 percent or taking consulting jobs, internships or part-time roles. At some companies, recruiters are being asked to make sales calls to fill their time.“Companies are being looked at pretty dramatically differently in the investor market or public market, and now they have to pretty quickly adapt,” said Nate Smith, chief executive of Lever, a provider of recruiting software.It is a confusing time for the job market. The unemployment rate remains low, and employees who outlasted the “Great Resignation” of the millions who quit their jobs during the pandemic became accustomed to demanding more flexibility around their schedules and remote working.Nora Hamada’s program for training recruiters, Recruit Rise, grew quickly after she started it last summer.Leah Nash for The New York TimesBut companies are using layoffs and the specter of a recession to assert more control. Mark Zuckerberg, chief executive of Meta, said he was fine with employees’ “self-selection” out of the company as he set a new, relentless pace of work. Some companies have asked employees to move to a headquarters city or leave, which observers say is an indirect way to trim head count without doing layoffs.Plenty of tech companies are still hiring. Many of them expect growth to bounce back, as it did for the tech industry a few months after the initial shock of the pandemic in 2020. But companies are also under pressure to turn a profit, and some are struggling to raise money. So even the best-performing firms are being more careful and taking longer to make offers. For now, recruiting is no longer a top priority.Recruiters know the industry is cyclical, said Bryce Rattner Keithley, founder of Great Team Partners, a talent advisory firm in the San Francisco Bay Area. There’s an expression about gumdrops — or “nice to have” hires — versus painkillers, who are employees that solve an acute problem, she said.“A lot of the gumdrops — that’s where you’re going to see impact,” she said. “You can’t buy as many toys or shiny things.”Ms. Hamada started Recruit Rise in July last year, when recruiting firms were so overbooked that companies had to call in favors for the privilege of their business. Her company aimed to help meet that demand by offering people — typically midcareer professionals — a nine-week training course in recruiting for technical roles.The program grew quickly, forging relationships with prominent venture capital firms and Y Combinator’s Continuity Fund, which helped funnel students from Ms. Hamada’s program into recruiting jobs at high-growth tech start-ups.In May, emails from companies wanting to hire her students started tapering off. The venture firms she worked with began publishing doom-and-gloom blog posts about cutbacks. Then the layoffs started.Ms. Hamada stopped offering new classes to focus on helping existing students find jobs. She scrambled to contact companies outside the tech industry that were hiring tech roles — like banks or retailers — as well as software development agencies and consulting groups.“It was a scary period,” she said.For Jordana Stein, the shift happened on May 19. Her start-up, Enrich, hosts recurring discussion groups for professionals. In recent years, the most popular one was focused on “winning the talent wars” by hiring quickly. Enrich’s virtual events typically filled up with a wait list. But that day, three people showed up, and they didn’t talk about hiring — they talked about layoffs.“All of a sudden, the needs changed,” Ms. Stein, 39, said. Enrich, based in San Francisco, created a new discussion group focused on employee morale during a downturn.Pitch, a software start-up based in Berlin, froze hiring for new roles in the spring. The company’s four recruiters suddenly had little to do, so Pitch directed them to take rotations on other teams, including sales and research.By keeping the recruiters on staff, Pitch will be ready to start growing quickly again if the market rebounds, said Nicholas Mills, the start-up’s president.“Recruiters have a lot of transferable skills,” he said.Lucille Lam, 38, has been a recruiter her entire career. But after her employer, the crypto security start-up Immunefi, slowed its recruiting efforts in the spring, she switched to work in human resources. Instead of managing job listings and sourcing recruits, she began setting up performance review systems and “accountability frameworks” for Immunefi’s employees.“My job morphed heavily,” she said.Ms. Lam said she appreciated the chance to learn new skills. “Now I understand how to do terminations,” she said. “In a market where nobody’s hiring, I’ll still have a valuable skill set.”Matt Turnbull, a co-founder of Turnbull Agency, said at least 15 recruiters had asked him for work in recent months because their networks had dried up. Some offered to charge 10 percent to 30 percent below their normal rates — something he had never seen since starting his agency, which operates from Los Angeles and France, seven years ago.“Many recruiters are desperate now,” he said.Those who are still working have it harder than before. Job candidates often get stuck in holding patterns with companies that have frozen budgets. Others see their offers suddenly rescinded, leading to difficult conversations.“I have to try to be as honest as possible without discouraging them,” Mr. Turnbull said. “That doesn’t make not being not wanted any easier.”At Recruit Rise, Ms. Hamada restarted classes to train recruiters in late August. Steering her students away from start-ups funded by venture capital has shown promise, even if some of them have started with internships or part-time work instead of a full-time gig.Ms. Hamada is hopeful about the new direction, but less so about the tech companies propped by venture capital funding. “They’re not looking that stable right now,” she said. More

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    Job Openings Picked Up in July, Showing the Labor Market Remains Hot

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    Demand for workers remained strong in July, a sign that the U.S. labor market remains vibrant even as the Federal Reserve tries to cool the economy by raising interest rates.Job openings ticked up to 11.2 million, the Labor Department reported on Tuesday as part of its monthly Job Openings and Labor Turnover Survey, or JOLTS.The survey included a large upward revision for openings in June, to 11 million from an estimated 10.7 million. The figure reached a record of more than 11.8 million in March.Substantial aid during the pandemic’s ups-and-downs has kept businesses of all sizes afloat and household finances relatively healthy, resulting in robust demand for a broad variety of goods and services. But the labor force is still smaller than it was before the pandemic, forcing employers to scramble to hire.Openings outnumber unemployed workers by a ratio of two to one.The largest increases in openings were in transportation, warehousing and utilities jobs. In a sign of continued recovery, postings surged in the arts, entertainment and recreation industries, which have greatly benefited from the easing of Covid-19 concerns and restrictions.The State of Jobs in the United StatesEmployment gains in July, which far surpassed expectations, show that the labor market is not slowing despite efforts by the Federal Reserve to cool the economy.July Jobs Report: U.S. employers added 528,000 jobs in the seventh month of the year. The unemployment rate was 3.5 percent, down from 3.6 percent in June.Black Employment: Black workers saw wages and employment rates go up in the wake of the pandemic. But as the Federal Reserve tries to tame inflation, those gains could be eroded.Slow Wage Growth: Pay has been rising rapidly for workers at the top and the bottom. But things haven’t been so positive for all professions, especially pharmacists.Care Worker Shortages: A lack of child care and elder care options is forcing some women to limit their hours or has sidelined them altogether, hurting their career prospects.Several prominent companies announced layoffs this summer. But both the overall rate and number of layoffs have been flat on a monthly basis, while the recently elevated rate of quitting declined only slightly in July, showing that workers remain able to leave jobs they find unsatisfying.There were some signs of weakness, however. The survey found that job openings decreased in durable-goods manufacturing by an estimated 47,000. Some economists say this is unsurprising after the intense consumer demand for goods at the beginning of the pandemic. But it may also be an early mark of tighter financial conditions as a result of the Fed’s bid to rein in price increases.Economists and bank analysts said the report made it likely that the Fed would remain aggressive in raising interest rates, as the central bank tries to weaken the labor market so that wage gains and consumer spending, which have slowed, will dip further in better alignment with the supply-constrained economy.“The job market remains surprisingly resilient to the Fed’s best efforts to cool it off,” said Mark Zandi, the chief economist at Moody’s Analytics. “The Fed desperately wants job growth to slow and unemployment to stabilize, even rise a bit, to quell wage and price pressures.”The Labor Department’s employment report for July was unexpectedly strong, showing a gain of 528,000. Mr. Zandi said the “red hot” JOLTS data would put even greater focus on the August hiring data, due Friday.The demand for labor is particularly remarkable because, based on inflation-adjusted gross domestic product, the economy contracted slightly in the first half of the year. Despite higher prices, the raw amount of goods and services being exchanged remains considerable, fueling demand for labor.“Millions of Americans still can find employment or even trade up to a higher-paying position,” said Robert Frick, an economist at Navy Federal Credit Union. “We may be seeing a second wind for economic growth after high inflation and slowing job growth in the spring.”Some commentators say the data on openings may be somewhat overstated because businesses have little incentive to take down listings, even if the urgency of hiring has waned.And there are signs that the tide may be shifting. A survey of more than 100 chief financial officers by Deloitte, a consulting and financial advisory firm, showed that nearly all of them expected decreases in revenue, hiring and overall expansion in the coming year.Their growth expectations for wages and staffing declined. They expect annual wage growth to be 4.8 percent and personnel growth to be 2.6 percent — both down from 5.3 percent in the previous quarterly survey. The Fed is also making a mark in corporate financing, which can affect hiring capacity or decisions: Roughly one in 10 chief financial officers at public companies viewed debt financing as attractive, down from nine in 10 a year ago.Still, executives remained relatively confident about the prospects for their own businesses, a disconnect that mirrors how consumers have maintained a gloomy economic outlook across the board while people in most income brackets continue to spend at heightened levels. More

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    What Will Happen to Black Workers’ Gains if There’s a Recession?

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    Black unemployment fell quickly after the initial pandemic downturn. But as the Federal Reserve fights inflation, those gains could be eroded.Black Americans have been hired much more rapidly in the wake of the pandemic shutdowns than after previous recessions. But as the Federal Reserve tries to soften the labor market in a bid to tame inflation, economists worry that Black workers will bear the brunt of a slowdown — and that without federal aid to cushion the blow, the impact could be severe.Some 3.5 million Black workers lost or left their jobs in March and April 2020. In weeks, the unemployment rate for Black workers soared to 16.8 percent, the same as the peak after the 2008 financial crisis, while the rate for white workers topped out at 14.1 percent.Since then, the U.S. economy has experienced one of its fastest rebounds ever, one that has extended to workers of all races. The Black unemployment rate was 6 percent last month, just above the record low of late 2019. And in government data collected since the 1990s, wages for Black workers are rising at their fastest pace ever.Now policymakers at the Fed and in the White House face the challenge of fighting inflation without inducing a recession that would erode or reverse those workplace gains.Decades of research has found that workers from racial and ethnic minorities — along with those with other barriers to employment, such as disabilities, criminal records or low levels of education — are among the first laid off during a downturn and the last hired during a recovery.William Darity Jr., a Duke University professor who has studied racial gaps in employment, says the problem is that the only reliable tool the Fed uses to fight inflation — increasing interest rates — works in part by causing unemployment. Higher borrowing costs make consumers less likely to spend and employers less likely to invest, reducing pressure on prices. But that also reduces demand for workers, pushing joblessness up and wages down.“I don’t know that there’s any existing policy option that’s plausible that would not result in hurting some significant portion of the population,” Mr. Darity said. “Whether it’s inflation or it’s rising unemployment, there’s a disproportionate impact on Black workers.”In a paper published last month, Lawrence H. Summers, a former Treasury secretary and top economic adviser to Presidents Bill Clinton and Barack Obama, asserted with his co-authors that the Fed would need to allow the overall unemployment rate to rise to 5 percent or above — it is now 3.5 percent — to bring inflation under control. Since Black unemployment is typically about double that of white workers, that suggests that the rate for Black workers would approach or reach double digits.In an interview, Mr. Summers said that outcome would be regrettable and, to some extent, unavoidable.“But the alternative,” Mr. Summers argued — “simply pretending” the U.S. labor market can remain this hot — “is setting the stage for the mistakes we made in the 1970s, and ultimately for a far larger recession, to contain inflation.”The State of Jobs in the United StatesEmployment gains in July, which far surpassed expectations, show that the labor market is not slowing despite efforts by the Federal Reserve to cool the economy.July Jobs Report: U.S. employers added 528,000 jobs in the seventh month of the year. The unemployment rate was 3.5 percent, down from 3.6 percent in June.Slow Wage Growth: Pay has been rising rapidly for workers at the top and the bottom. But things haven’t been so positive for all professions — especially for pharmacists.Care Worker Shortages: A lack of child care and elder care options is forcing some women to limit their hours or has sidelined them altogether, hurting their career prospects.Downsides of a Hot Market: Students are forgoing degrees in favor of the attractive positions offered by employers desperate to hire. That could come back to haunt them.“These arguments have nothing to do with how much you care about unemployment, or how much you care about the unemployment of disadvantaged groups,” he continued. “They only have to do with technical judgment.”Many progressive economists have been sharply critical of that view, arguing that Black workers should not be the collateral damage in a war on inflation. William Spriggs, an economist at Howard University, cautioned against overstating the Fed’s ability to bring inflation under control — especially when inflation is being driven in part by global forces — and underestimating the potential damage from driving interest rates much higher.Black workers will suffer first under a Fed-induced recession, Mr. Spriggs said. When that happens, he added, job losses across the board tend to follow. “And so you pay attention, because that’s the canary in the coal mine,” he said.In a June 2020 essay in The Washington Post and an accompanying research paper, Jared Bernstein — now a top economic adviser to President Biden — laid out the increasingly popular argument that in light of this, the Fed “should consider targeting not the overall unemployment rate, but the Black rate.”Fed policy, he added, implicitly treats 4 percent unemployment as a long-term goal, but “because Black unemployment is two times the overall rate, targeting 4 percent for the overall economy means targeting 8 percent for blacks.”The Fed didn’t take Mr. Bernstein’s advice. But in the years leading up to the pandemic, Fed policymakers increasingly talked about the benefits of a strong labor market for racial and ethnic minorities, and cited it as a factor in their policy decisions.After Mr. Biden took office, he and his economic advisers pushed for a large government spending bill — which became the $1.9 trillion American Recovery Plan — in part on the grounds that it would avoid the painful slog that job seekers, particularly nonwhite workers, faced after the 2007-9 recession and would instead deliver a supercharged recovery.Federal pandemic relief provided a cushion for Ms. Jordan, at her home near Atlanta with her husband and children. Rita Harper for The New York Times“It’s been faster, more robust for African Americans than any other post-recessionary periods since at least the 1970s,” Cecilia Rouse, the chair of Mr. Biden’s Council of Economic Advisers, said in an interview. Black workers are receiving faster wage gains than other racial and ethnic groups, and have taken advantage of the strong job market to move into higher-paying industries and occupations, according to an analysis of government data by White House economists shared with The New York Times.Menyuan Jordan is among them. Ms. Jordan, who has a master’s degree in social work and was making a living training child care providers in February 2020, saw her livelihood upended when Covid-19 struck.“The money was based off face-to-face professional development that went to zero almost immediately overnight,” she said. “I couldn’t afford the rent.”But pandemic relief packages from the federal government helped cushion the blow of lost earnings. And by last winter, Ms. Jordan had landed a job as a mental health clinician near her home in Atlanta — one that offered training and paid roughly $13,000 more than her prepandemic role, which she estimates brought in $42,000 annually.Administration officials say they are optimistic that Black workers can continue to see higher wages and improving job opportunities even if the labor market cools. But Goldman Sachs analysts, echoing a common view, recently concluded that average wage gains for workers would need to fall much further to be consistent with the Fed’s inflation goals.Fed policymakers are still somewhat hopeful that they can bring down inflation without causing a recession or undoing the gains of the past two years, in part because of a hope that the labor market can slow down mainly through reductions in job openings rather than layoffs.Jerome H. Powell, the Fed chair, has made the case that only by bringing inflation under control can the central bank create a sustainably strong labor market that will benefit all workers.“We all want to get back to the kind of labor market we had before the pandemic,” Mr. Powell said in a news conference last month. “That’s not going to happen without restoring price stability.”Some voices in finance are calling for smaller and fewer rate increases, worried that the Fed is underestimating the ultimate impact of its actions to date. David Kelly, the chief global strategist for J.P. Morgan Asset Management, believes that inflation is set to fall considerably anyway — and that the central bank should exhibit greater patience, as remnants of pandemic government stimulus begin to vanish and household savings further dwindle.“The economy is basically treading water right now,” Mr. Kelly said, adding that officials “don’t need to put us into a recession just to show how tough they are on inflation.”Michelle Holder, a labor economist at John Jay College of Criminal Justice, similarly warned against the “statistical fatalism” that halting labor gains is the only way forward. Still, she said, she’s fully aware that under current policy, trade-offs between inflation and job creation are likely to endure, disproportionately hurting Black workers. Interest rate increases, she said, are the Fed’s primary tool — its hammer — and “a hammer sees everything as a nail.”Reflecting on a dinner she recently attended in Washington with “really high-level, all-white progressive economists,” Ms. Holder, who is Black, said there was a “resigned attitude” among many of her peers, who want positive near-term outcomes for people of color overall but remain “wedded to the use of mainstream tools” and ask, “What else can we do?”Mr. Darity, the Duke professor, argued that one solution would be policies that helped insulate workers from an economic downturn, like having the federal government guarantee a job to anyone who wants one. Some economists support less ambitious policies, such as expanded benefits to help people who lose jobs in a recession. But there is little prospect that Congress would adopt either approach, or come to the rescue again with large relief checks — especially given criticism from many Republicans, and some high-profile Democrats, that excessive aid in the pandemic contributed to inflation today.“The tragedy will be that our administration won’t be able to help the families or individuals that need it if another recession happens,” Ms. Holder said.Morgani Brown, 24, lives and works in Charlotte, N.C., and has experienced the modest yet meaningful improvements in job quality that many Black workers have since the initial pandemic recession. She left an aircraft cleaning job with Jetstream Ground Services at Charlotte Douglas International Airport last year because the $10-an-hour pay was underwhelming. But six months ago, the work had become more attractive.Morgani Brown returned to an employer she had left in Charlotte, N.C., when the hourly pay rose. Damola Akintunde for The New York Times“I’d seen that they were paying more, at $14,” she said, “so I went and applied for Jetstream again.” She remains frustrated with some work conditions, but said the situation had “ended up being better.”With rents rising, she saves money rooming with her boyfriend and another friend, both of whom work at an Amazon fulfillment center. Ms. Brown, who has a baby on the way, is aware that the e-commerce giant has recently cut back its work force. (An Amazon official noted on a recent earnings call that the company had “quickly transitioned from being understaffed to being overstaffed.”)Ms. Brown said she and her roommates hoped that their jobs could weather any downturn. But she has begun hearing more rumblings about people she knows being fired or laid off.“I’m not sure exactly why,” she said. More

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    In an Unequal Economy, the Poor Face Inflation Now and Job Loss Later

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    For Theresa Clarke, a retiree in New Canaan, Conn., the rising cost of living means not buying Goldfish crackers for her disabled daughter because a carton costs $11.99 at her local Stop & Shop. It means showering at the YMCA to save on her hot water bill. And it means watching her bank account dwindle to $50 because, as someone on a fixed income who never made much money to start with, there aren’t many other places she can trim her spending as prices rise.“There is nothing to cut back on,” she said.Jordan Trevino, 28, who recently took a better paying job in advertising in Los Angeles with a $100,000 salary, is economizing in little ways — ordering a cheaper entree when out to dinner, for example. But he is still planning a wedding next year and a honeymoon in Italy.And David Schoenfeld, who made about $250,000 in retirement income and consulting fees last year and has about $5 million in savings, hasn’t pared back his spending. He has just returned from a vacation in Greece, with his daughter and two of his grandchildren.“People in our group are not seeing this as a period of sacrifice,” said Mr. Schoenfeld, who lives in Sharon, Mass., and is a member of a group called Responsible Wealth, a network of rich people focused on inequality that pushes for higher taxes, among other stances. “We notice it’s expensive, but it’s kind of like: I don’t really care.”Higher-income households built up savings and wealth during the early stages of the pandemic as they stayed at home and their stocks, houses and other assets rose in value. Between those stockpiles and solid wage growth, many have been able to keep spending even as costs climb. But data and anecdotes suggest that lower-income households, despite the resilient job market, are struggling more profoundly with inflation.That divergence poses a challenge for the Federal Reserve, which is hoping that higher interest rates will slow consumer spending and ease pressure on prices across the economy. Already, there are signs that poorer families are cutting back. If richer families don’t pull back as much — if they keep going on vacations, dining out and buying new cars and second homes — many prices could keep rising. The Fed might need to raise interest rates even more to bring inflation under control, and that could cause a sharper slowdown.In that case, poorer families will almost certainly bear the brunt again, because low-wage workers are often the first to lose hours and jobs. The bifurcated economy, and the policy decisions that stem from it, could become a double whammy for them, inflicting higher costs today and unemployment tomorrow.“That’s the perfect storm, if unemployment increases,” said Mark Brown, chief executive of West Houston Assistance Ministries, which provides food, rental assistance and other forms of aid to people in need. “So many folks are so very close to the edge.”America’s poor have spent part of the savings they amassed during coronavirus lockdowns, and their wages are increasingly struggling to keep up with — or falling behind — price increases. Because such a big chunk of their budgets is devoted to food and housing, lower-income families have less room to cut back before they have to stop buying necessities. Some are taking on credit card debt, cutting back on shopping and restaurant meals, putting off replacing their cars or even buying fewer groceries.But while lower-income families spend more of each dollar they earn, the rich and middle classes have so much more money that they account for a much bigger share of spending in the overall economy: The top two-fifths of the income distribution account for about 60 percent of spending in the economy, the bottom two-fifths about 22 percent. That means the rich can continue to fuel the economy even as the poor pull back, a potential difficulty for policymakers.The Federal Reserve has been lifting interest rates rapidly since March to try to slow consumer spending and raise the cost of borrowing for companies, which will in turn lead to fewer business expansions, less hiring and slower wage growth. The goal is to slow the economy enough to lower inflation but not so much that it causes a painful recession.Officials at West Houston Assistance Ministries said its food bank served 200 households on Friday.Meridith Kohut for The New York TimesBut job growth accelerated unexpectedly in July, with wages climbing rapidly. Consumer spending, adjusted for inflation, has cooled, but Americans continue to open their wallets for vacations, restaurant meals and other services. If solid demand and tight labor market conditions continue, they could help to keep inflation rapid and make it more difficult for the Fed to cool the economy without continuing its string of quick rate increases. That could make widespread layoffs more likely.“The one, singular worry is the jobs market — if demand is constrained to the point that companies have to start laying off workers, that’s what hits Main Street,” said Nela Richardson, chief economist at the job market data provider ADP. “That’s what hits low-income workers.”8 Signs That the Economy Is Losing SteamCard 1 of 9Worrying outlook. More

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    Gloomy about the economy and inflation, Americans remain upbeat about jobs.

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    Americans are worried about inflation, pessimistic about the economy overall and upset about the way their leaders are handling it. But they still feel pretty good about the job market.Fifty-two percent of Americans say it is a good time to find a job right now, compared with just 11 percent who say it is a bad time, according to a survey conducted last month for The New York Times by the online research firm Momentive. (The rest say the situation is “mixed,” or didn’t answer the question.) Fifty-six percent say the job market is more favorable to employees than employers, and a majority think that these conditions will continue for at least six months.Most Americans are not worried, either, that their jobs are in jeopardy. Forty-four percent of those surveyed said they were concerned that they or a member of their household would be laid off in the next few months, up only modestly from 37 percent just before the pandemic.“People see the job market as still a little bit of a bright spot,” said Brianna Richardson, a research scientist for Momentive.The rosy outlook on jobs is a striking contrast to Americans’ views of the economy writ large. More than 90 percent of people in the survey said they were concerned about inflation, and a majority said they were worse off financially than a year earlier. Only 17 percent said overall business conditions in the country were somewhat or very good.Ms. Richardson said the results suggested that bad news on inflation was eclipsing good news on jobs in Americans’ perceptions of the economy. That appears to be true for people’s own finances as well: Even though they see it as an employee-friendly job market, most workers say they haven’t gotten raises that keep up with rising prices.Americans take a dim view of the way the White House and the Federal Reserve have handled inflation, although the survey was conducted before Senator Joe Manchin III of West Virginia signed on to a bill that Democrats say would help reduce inflation. But those polled don’t necessarily think Republicans would do better. Forty-four percent of respondents said they thought Democrats would do a better job with the economy, versus 47 percent who preferred Republicans on the issue. Those numbers were little changed from the last time the question was asked, in May 2019.About the survey: The data in this article came from an online survey of 5,881 adults conducted by the polling firm Momentive from July 18 to July 25. The company selected respondents at random from the more than two million people who take surveys on its platform each day. Responses were weighted to match the demographic profile of the population of the United States. The survey has a modeled error estimate (similar to a margin of error in a standard telephone poll) of plus or minus two percentage points, so differences of less than that amount are statistically insignificant. More

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    Job Openings Fell in June, Suggesting That the Labor Market Is Cooling

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    The number of job openings fell for the third consecutive month in June, a sign that the red-hot U.S. labor market may be starting to cool off.Employers posted 10.7 million vacant positions on the last day of June, the Labor Department said Tuesday. That is high by historical standards but a sharp drop from the 11.3 million openings in May and the record 11.9 million in March. It was the largest one-month decline in the two decades that the government has kept track of this data, other than the two months at the beginning of the coronavirus pandemic in 2020.Job openings are falling, but remain highMonthly U.S. job openings, seasonally adjusted

    Source: Bureau of Labor StatisticsBy The New York TimesThe drop was concentrated in retail, the latest sign that the sector is struggling as consumers shift their spending from goods back to services as the pandemic ebbs. But job postings have also fallen in leisure and hospitality, the sector that was the most strained by labor shortages last year.The job market remains strong by most measures. There were still nearly twice as many job openings as unemployed workers in June, and employers are raising pay and offering other incentives to attract and retain staff. Layoffs remained near a record low in June, suggesting that employers were reluctant to part with staff they worked so hard to hire. And the number of workers voluntarily quitting their jobs remains high, although it has fallen from last year’s peak.The recent decline in openings is likely to be encouraging news for policymakers at the Federal Reserve, who have been trying to slow down the economy in an effort to tame inflation. Jerome H. Powell, the Fed chair, and other officials have pointed to the number of vacant jobs as evidence that the labor market is too hot. They are hoping that employers will start posting fewer jobs and hiring fewer workers before they begin laying people off, allowing the job market to cool down without causing a spike in unemployment.Still, any slowdown in the job market will mean that workers have less leverage to demand raises when pay is already failing to keep up with inflation. Slower wage growth, in turn, could lead consumers to spend less, increasing the risk that the United States could slip into a recession.The labor market “is definitely losing momentum, and that’s what is chipping away at people’s ability to spend,” said Tim Quinlan, a senior economist for Wells Fargo.Economists and policymakers will get a more up-to-date picture of the job market on Friday, when the Labor Department releases data on hiring and unemployment in July. Forecasters surveyed by FactSet expect the report to show that employers added about 250,000 jobs last month, down from 372,000 in June. More

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    Who’s to Blame for a Factory Shutdown: A Company, or California?

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    VERNON, Calif. — Teresa Robles begins her shift around dawn most days at a pork processing plant in an industrial corridor four miles south of downtown Los Angeles. She spends eight hours on her feet cutting tripe, a repetitive motion that has given her constant joint pain, but also a $17.85-an-hour income that supports her family.So in early June, when whispers began among the 1,800 workers that the facility would soon shut down, Ms. Robles, 57, hoped they were only rumors.“But it was true,” she said somberly at the end of a recent shift, “and now each day inches a little closer to my last day.”  The 436,000-square-foot factory, with roots dating back nearly a century, is scheduled to close early next year. Its Virginia-based owner, Smithfield Foods, says it will be cheaper to supply the region from factories in the Midwest than to continue operations here.“Unfortunately, the escalating costs of doing business in California required this decision,” said Shane Smith, the chief executive of Smithfield, citing utility rates and a voter-approved law regulating how pigs can be housed.Workers and company officials see a larger economic lesson in the impending shutdown. They just differ on what it is. To Ms. Robles, it is evidence that despite years of often perilous work, “we are just disposable to them.” For the meatpacker, it is a case of politics and regulation trumping commerce.The cost of doing business in California is a longtime point of contention. It was cited last year when Tesla, the electric-vehicle maker that has been a Silicon Valley success story, announced that it was moving its headquarters to Texas. “There’s a limit to how big you can scale in the Bay Area,” said Elon Musk, Tesla’s chief executive, mentioning housing prices and long commutes.As with many economic arguments, this one can take on a partisan hue.Around the time of Tesla’s exit, a report by the conservative-leaning Hoover Institution at Stanford University found that California-based companies were leaving at an accelerating rate. In the first six months of last year, 74 headquarters relocated from California, according to the report. In 2020, the report found, 62 companies were known to have relocated.Dee Dee Myers, a senior adviser to Gov. Gavin Newsom, a Democrat, counters by pointing to California’s continued economic growth.“Every time this narrative comes up, it’s consistently disproven by the facts,” said Ms. Myers, director of the Governor’s Office of Business and Economic Development. The nation’s gross domestic product grew at an annual pace of 2 percent over a five-year period through 2021, according to Ms. Myers’s office, while California’s grew by 3.7 percent. The state is still the country’s tech capital.Still, manufacturing has declined more rapidly in California than in the nation as a whole. Since 1990, the state has lost a third of its factory jobs — it now has roughly 1.3 million, according to the Bureau of Labor Statistics — compared with a 28 percent decline nationwide.The Smithfield plant is an icon of California’s industrial heyday. In 1931, Barney and Francis Clougherty, brothers who grew up in Los Angeles and the sons of Irish immigrants, started a meatpacking business that soon settled in Vernon. Their company, later branded as Farmer John, became a household name in Southern California, recognized for producing the beloved Dodger Dog and al pastor that sizzled at backyard cookouts. During World War II, the company supplied rations to U.S. troops in the Pacific.Leo Velasquez, 62, started working at the plant in 1990. He had hoped to stay there until he was ready to retire.Mark Abramson for The New York TimesAlmost 20 years later, Les Grimes, a Hollywood set painter, was commissioned to create a mural at the plant, transforming a bland industrial structure into a pastoral landscape where young children chased cherubic-looking pigs. It became a sightseeing destination.More recently, it has also been a symbol of the state’s social and political turbulence.In explaining Smithfield’s decision to close the plant, Mr. Smith, the chief executive, and other company officials have pointed to a 2018 statewide ballot measure, Proposition 12, which requires that pork sold in the state come from breeding pigs housed in spaces that allow them to move more freely.The measure is not yet being enforced and faces a challenge before the U.S. Supreme Court this fall. If it is not overturned, the law will apply even to meat packed outside the state — the way Smithfield now plans to supply the local market — but company officials say that in any case, its passage reflects a climate inhospitable to pork production in California.Passions have sometimes run high outside the plant as animal rights activists have condemned the confinement and treatment of the pigs being slaughtered inside. Protesters have serenaded and provided water to pigs whose snouts stuck out of slats in arriving trucks.In addition to its objections to Proposition 12, Smithfield maintains that the cost of utilities is nearly four times as high per head to produce pork in California than at the company’s 45 other plants around the country, though it declined to say how it arrived at that estimate.John Grant, president of the United Food and Commercial Workers Local 770, which represents Ms. Robles and other workers at the plant, said Smithfield announced the closing just as the sides were to begin negotiating a new contract. “They’re kicking us out with no answers,” said Teresa Robles, who has worked at the factory for four years.Mark Abramson for The New York Times“A total gut punch and, frankly, a shock,” said Mr. Grant, who worked at the plant in the 1970s. He said wage increases were a priority for the union going into negotiations. The company has offered a $7,500 bonus to employees who stay through the closing and has raised the hourly wage, previously $19.10 at the top of the scale, to $23.10. (The rate at the company’s unionized Midwest plants is still a bit higher.)But Mr. Grant said the factory shutdown was an affront to his members, who toiled through the pandemic as essential workers. Smithfield was fined nearly $60,000 by California regulators in 2020 for failing to take adequate measures to protect workers from contracting coronavirus.“After all that the employees have done throughout the pandemic, they’re now all of a sudden going to flee? They’re destroying lives,” said Mr. Grant, adding that the union is working to find new jobs for workers and hopes to help find a buyer for the plant.Karen Chapple, a professor of city and regional planning at the University of California, Berkeley, said the closing was an example of “the larger trend of deindustrialization” in areas like Los Angeles. “It probably doesn’t make sense to be here from an efficiency perspective,” she said. “It’s the tail end of a long exodus.”Indeed, the number of food manufacturing jobs in Los Angeles County has declined 6 percent since 2017, according to state data.  And as those jobs are shed, workers like Ms. Robles wonder what will come next.More than 80 percent of the employees at the Smithfield plant are Latino — a mix of immigrants and first-generation native-born. Most are older than 50. The security and benefits have kept people in their jobs, union leaders say, but the nature of the labor has made it hard to recruit younger workers who have better alternatives.On a recent overcast morning, the air in Vernon was thick with the smell of ammonia. Workers wearing surgical masks and carrying goggles and helmets walked into the plant. The sound of forklifts hummed beyond a high fence.Massive warehouses line the streets in the area. Some sit vacant; others produce wholesale local baked goods and candies. Mario Melendez, who has worked at the plant for a decade, says he feels betrayed by the company.Mark Abramson for The New York TimesMs. Robles started at the Smithfield plant four years ago. For more than two decades she owned a small business selling produce in downtown Los Angeles. She loved her work, but when her brother died in 2018, she needed money to honor his wish to have his body sent from Southern California to Colima, Mexico, their hometown. She sold the business for a couple of thousand dollars, then started at the factory, making $14 an hour.“I was proud,” she said, recalling the early months at her new job.Ms. Robles is the sole provider for her family. Her husband has several health complications, including surviving a heart attack in recent months, so she now shoulders the $2,000 mortgage payment for their home in the Watts neighborhood of Los Angeles. Sometimes her 20-year-old son, who recently started working at the plant, helps with expenses.“But this is my responsibility — it is on me to provide,” she said.Ms. Robles has long recited the Lord’s Prayer every night before bed, and now she often finds herself repeating it throughout the day for strength.“They’re kicking us out with no answers,” she said.Other workers, like Mario Melendez, 67, who has worked at the plant for a decade, shares that unmoored feeling.It’s an honor to know his labor helps feed people across Southern California, he said — especially around the holidays, when the factory’s ribs, ham and hot dogs will be part of people’s celebrations.But the factory is also a place where he contracted coronavirus, which he passed along to his brother, who died of the virus, as did his mother. He was devastated.A truck carrying pigs entering the plant. Animal rights activists have sometimes protested outside.Mark Abramson for The New York Times“A terrible shock,” said Mr. Melendez, who says he feels betrayed by the company.So does Leo Velasquez.He started on the night shift in 1990, making $7 an hour to package and seal bacon. A few years later, he moved to days, working 10-hour shifts.“I’ve given my life to this place,” said Mr. Velasquez, 62.Over the years, his body began to wear down. In 2014, he had shoulder replacement surgery. Still, he had hoped to continue at the factory until he was ready to retire.“That’s not going to happen,” he said. “Where I go from here, I do not know.” More