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U.S. Labor Market
Main Article: U.S. Labor Market
2024: Unemployment rises to 4.1%
The unemployment rate USA in June 2024 rose to 4.1%, the highest since November 2021.
2023
Unemployment in the American IT sector rises due to AI
In September 2023, the unemployment rate in the American IT sector increased to 4.3%. By comparison, the nationwide figure is 3.8%. Such data are given in the report of the US Department of Labor, published on October 6, 2023.
The labor market in the IT sector in the United States began to decline in January-February 2023. As of the end of September 2023, there are approximately 117 thousand unemployed IT specialists in the country. For comparison: in August of this year, this figure was approximately 106 thousand. This situation is partly due to the widespread introduction of artificial intelligence: neural networks, chat bots and machine learning systems are able to perform routine tasks more efficiently compared to people. At the same time, companies get the opportunity to save significant funds on labor remuneration. On the other hand, the development of neural networks leads to the emergence of new professions, such as teachers in retraining in the field of AI. Most IT executives do not believe that generative AI will replace professional employees: it says that demand for specialists, especially in areas such as cybersecurity and data management, continues to outstrip supply.
In general, the reduction in jobs in the American IT sector, including software, telecommunications, information services and data processing, amounted to 14.3 thousand in three months (by the end of September 2023). Companies are forced to reduce the cost of large IT projects, while reducing the cost of cloud technologies and software. This is due to the difficult macroeconomic situation, high inflation and rising energy prices.
The study also says that in September 2023, American employers on a nationwide scale created 336 thousand new jobs, which is the highest figure since January of the year under consideration.[1]
Youth unemployment - 8%
5.5 million unemployed and 7.1 million open vacancies
By August 2023, the number of unemployed in the United States over the past 1.5 years has hardly changed and is in the range of 5.4-5.7 million people. The situation where vacancies above the number of unemployed are unique and first appeared in mid-2018 largely due to demographic reasons and internal structural reasons associated with the earlier retirement of wealthy Americans receiving rental income, including from the asset market.
At the same time, there are 7.1 million open vacancies in the country.
After the COVID-19 crisis, structural imbalances in the labor market worsened, largely related to inadequately high budget subsidies, which were comparable or even higher than the average income for low-skilled personnel, which intensified the "washing out" of the working class from the labor market.
Since 2022, the situation has been improving after the cuts in subsidies, but in general we are talking about almost 4 million people compared to 2019, who are not included in the labor force, although they can work. Mainly at the expense of wealthy and qualified Americans who are fed from the asset market and are not interested in work.
Unemployment 6% among blacks and 3.1% among whites
Black workers in the United States account for 90% of the rise in unemployment: for them in June 2023, it rose to 6%, the highest since August 2022, and again almost doubled the unemployment rate among whites, whose level fell to 3.1%, the Labor Department said in a report on July 7.
Black workers are often among the first to be laid off when the economy begins to weaken, and the recent decline in employment rates could be a danger signal to the broader labor market, according to the study.
Who gets US unemployment benefits
The number of Americans from high-income families receiving unemployment benefits grew more than sixfold over the past year by April 2023.
That growth could reflect the wave of layoffs that have engulfed sectors of the economy such as white-collar workers, technology and finance in recent months.
2022: Wealth allows more and more Americans out of work: Unemployment low, job openings high
The US has record low unemployment with record high open jobs for the workforce. From 2019 to the end of 2022, almost 4 million of the working-age population flew out of the labor force.
Several factors influence here - this is demography and motivation for work. If everything is clear with demography, then motivation for work is undermined through the welfare channel, and from two sides.
Wealthy Americans got the opportunity to exist at the expense of rental income, that is, dividends, interest, renting out housing and selling shares at inflated prices. This primarily applies to the category of persons over 50 years old, who retire earlier than they could in other conditions.
The second category is the beneficiaries of social support or "helicopter money," the distribution policy of which was the most inadequate from 2020 to 2021, but the "echo of madness" is still heard.
Although the US government has significantly tightened fiscal support, reducing budget subsidies to pre-pandemic levels, but largely at the expense of the middle class, while the poor are still receiving support, albeit in smaller volumes.
In 2020-2021, the volume of subsidies at the federal and municipal levels was comparable to income at the main job of low qualifications. This reduced the propensity and motivation for work among low-skilled personnel, accelerating the shortage of personnel and, as a result, salaries at the "lowest level."
To a lesser extent, but this gap in the labor force is relevant now.
One of the structural causes of inflation in the United States is an imbalance in supply and demand, when demand is incommensurably high, but not overlapped by labor productivity and employment.
Now demand corresponds to about 160 million people employed with the current structure of the economy and labor productivity, and in fact only 155 million are employed, that is, a gap of at least 5 million people, which is indirectly confirmed by the number of vacancies.
It is impossible to create 5 million jobs - there are no suitable personnel, so the only realistic channel for absorbing imbalances is a decrease in demand, the Spydell Finance channel noted.
2021
Cut unemployment to 3.9%
Fraudsters stole $400 billion in unemployment benefits from the United States
In early June 2021, the information security company ID.me reported that the United States had lost more than $400 billion due to fraud with the registration of unemployment benefits. The head of the company, Blake Hall, noted that this is almost 50% of all payments that were made to the American unemployed. Read more here.
It is more profitable for many to receive unemployment benefits than to work
As of April 2021, in the United States, it is still more profitable for dishwashers, hotel employees and teachers to stay at home than to work.
2020
40 million applications for unemployment benefits for 10 weeks of quarantine
The number of initial applications for unemployment benefits in the United States for ten weeks of quarantine exceeded 40 million, follows from the data of the country's Ministry of Labor.
For the week of May 17-23, 2.1 million Americans applied for payment, a week earlier - 2.4 million, and from the first week of May - 2.68 million.
The weekly roll of applications continues to fade: in the period from April 26 to May 2, 3.16 million people came for benefits, from April 19 to 25 - 3.84 million. The peak came at the end of March, when the number of weekly appeals reached 6.9 million.
At the end of May, 41 million Americans applied for benefits; as of May 9, the "army" of their permanent recipients numbered 31 million people.
US unemployment hits record since 1930s
According to the US Department of Labor, in April 2020, the US unemployment rate was 14.7%. This figure has become a record for the country since the Great Depression in the 1930s, when unemployment reached 25%, the department said on May 8, 2020.
In April 2020, the number of jobs in the United States decreased by 20.5 million. Analysts polled by Reuters expected a loss of 22 million jobs and an unemployment rate of 16%.
The former record (after the Great Depression) dates from 1982, when unemployment in the United States was 10.8%. During the financial crisis of 2008-2009. the figure at its peak reached 10%.
In February 2020, there were 5.8 million unemployed in the United States. Jobs fell by 870,000 in March, while unemployment rose to 4.4%. However, the data for this study ends up being collected before the end of the month. Meanwhile, companies began to stop work and massively reduce staff mainly from the second half of March. For seven weeks from mid-March to May 2, 33.5 million people filed applications for unemployment benefits.
In April 2020, losses in healthcare jobs in the United States amounted to 1.4 million, hotels and restaurants reduced their number by 7.6 million, retail stores - by 2.1 million. Production enterprises laid off 1.33 million employees, construction companies - almost 1 million.
The unemployment rate, including Americans who chose partial employment solely for economic reasons (indicator U6), rose to 22.8% in April 2020 from 8.7% in March. At the same time, at the end of last year, this figure dropped to a record low of 6.7%.
The Ministry of Labor also reported that hourly wages in the country in April 2020 increased by 7.9% in annual terms and amounted to $30.01. In monthly terms, it increased by $1.34.[2]
The rise of the number of citizens on the unemployment account
In April 2020, according to Feeding America, a network of charities dedicated to collecting and transferring food to those in need, over 22 million Americans are forced to fight hunger during the coronavirus pandemic. In New York, which has become the epicenter of the spread of the coronavirus, charities, the so-called "food banks," are barely coping with the flood of citizens seeking help.
Unthinkable rise in unemployment due to coronavirus
The number of applications for unemployment benefits in the United States amid the COVID-19 coronavirus epidemic rose at the end of March 2020 to a record 3.28 million in a week.
The following week, the number of applications for unemployment benefits doubled to 6.65 million.
At the end of March, the number of unemployed increased to 4.4% of the total number of people of working age.
Notes
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