The Job Market Has Been Like Musical Chairs. Will the Music Stop?

https://www.nytimes.com/2022/10/07/business/job-market-tightening.html

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When Debbie Ricks lost her job as a server in March 2020, she decided to chase a long cast-aside ambition: She would try to become a photojournalist, and get away from her undertipping customers. Last year seemed to be the time for a professional leap.

She had unemployment checks coming in, $1,200 a month. She could supplement food stamps with the pasta and applesauce cans she found on the streets. Most important, every restaurant in Washington, D.C., seemed to be hiring; at any moment, she figured, she could line up a job. But this summer, as her savings dried up and the cost of food rose, she began to feel that many of those backup opportunities had evaporated.

“I do kind of feel like, ‘Oh, Debbie, you should’ve jumped on that,’” Ms. Ricks, 44, said. “But I wanted to get back into journalism, which is what I love.”

After months of a booming job market, which prompted workers to quit and raised wages across industries, the job openings rate declined in August. Layoffs rose slightly, to 1.5 million, though they were still below their historical average. With fears of a recession looming, workers who were flush with opportunities are beginning to feel the anxieties of tightened corporate budgets.

“The trend has been toward less bargaining power for workers,” said Nick Bunker, director of North American economic research for the career site Indeed.

Many are sensing that after months of labor dynamics that gave employees and job seekers unusual leverage, the country’s economic interventions are about to hit some workers, especially low-income ones, hard, restricting their sense of possibility and optimism. In a recent survey from FlexJobs, a remote jobs platform, 73 percent of employees and job candidates said the possibility of a recession was affecting their career decisions; 80 percent said inflation was a factor.

“Ramen noodles have gone up a couple cents,” Ms. Ricks said. “Wages are the same, but the rent is going up, the price of food is going up.”

Plenty of employers are still recruiting, and the number of people hired in August was essentially unchanged from the previous month. Employers in banking, construction, manufacturing, retail and other industries expect to increase their staffs in the next three months, according to data from ManpowerGroup, a global staffing agency.

But the wide-open job market of late 2021 doesn’t feel as buoyant to workers anymore. There have been layoffs, hiring freezes or plans for them at a number of firms, including Goldman Sachs, Robinhood, Netflix, Amazon and Meta. The private-sector quitting rate dipped from its peak of 3.4 percent in November to 3 percent in August. ZipRecruiter’s job-seeker confidence index, which measures how hopeful people are about their ability to get hired, declined all summer, though it picked up slightly in September.

“Everybody’s feeling the whiplash,” said Suzanne Bates, partner and managing director of the corporate strategy firm BTS. “It’s this strange reversal of fortunes where everybody has been incredibly busy — and they still have needs, clients and customers — but at the same time there’s a lot of whispering in the hallways about hiring freezes.”

The job market last year and earlier in 2022 was like musical chairs, offering record opportunities for hopping from seat to seat. Now many feel that the music is about to stop.

Meredith McCleary checks her LinkedIn every morning and sees images of her own economic pessimism staring back at her. Many of her friends in the mortgage lending industry are posting about layoffs. She scrolls through hours-old openings that have already received hundreds of applications. Ms. McCleary, who was laid off in August, spends 40 hours each week at the kitchen table searching for jobs.

A year ago, she had switched to a new team at her company, buoyed by the labor shortage. Now she feels that the economy has turned on her. On top of the narrowing job pool, everything — soda, bacon, gas — keeps getting pricier.

“After the shutdowns, everything was coming back to life, things were getting better, you had opportunities to choose from,” said Ms. McCleary, 38, who lives in Indianapolis. “It kind of felt like everything went south economywise.”

The economic angst is audible in workshops that train and support job seekers. Toni Frana, a career services manager at FlexJobs, hosted a webinar last week on recovering from layoffs, with tips on topics like how to explain gaps on a résumé. Ms. Frana had offered this layoff-specific program early in the pandemic — but this fall, it seemed necessary to bring the session back.

Members of the Alphabet Workers Union, who fear that a recession could mean temporary workers at Alphabet, Google’s parent company, will not get their contracts renewed, have created internal chat forums where workers can share updates about their contracts and inform one another of job openings.

J.T. O’Donnell, a career coach, has heard concerns about the economic downturn creeping into her YouTube broadcasts, which offer job seekers advice about interview prep and other recruitment issues.

“I watch the train wreck in slow motion,” Ms. O’Donnell said. “All these people thought, ‘Oh, when I’m ready to go back to work it’ll be no problem.’ And now it’s a problem.”

Micah Pickus, 25, absorbs the ambient economic anxiety when he is listening in on conversations in the student lounge at the University of Maryland, where he is in the second year of a master’s program in public policy.

Mr. Pickus has run the math and knows he needs a salary of at least $60,000 to live comfortably in Washington, D.C., given his roughly $40,000 in student loans. He recently scheduled a session with a career coach, aware that the opportunities available to him when he graduates won’t be as plentiful as they might have been this past year.

“There’s going to be jobs — there’s not not going to be jobs — but it’s not going to be the cornucopia of plenty that people graduating this year would hope for,” Mr. Pickus said. “I’m cautiously optimistic things are going to work out, but it’s not like, ‘Yeah, I’ve got this in the bag.’”

Counselors who support young job seekers have noticed their optimism abating. Rebecca Cassidy, who works at Georgetown University’s career center, was surprised by the relaxed attitude that students seemed to adopt toward their job searches last year. In February 2022, she helped plan an event with an employer that recruits heavily from Georgetown, a flashy gathering with free food and branded swag. Prepandemic the presentation would draw over 100 attendees. Last year, only 40 or so students attended.

“We thought there would be a mad rush of students participating in these events, and it was like pulling teeth to get students to come out,” she recalled.

But as economic worries set in, more students are scrambling to line up offers. “I have had a couple students say: ‘There’s a recession coming. I want to lock this down now,’” Ms. Cassidy added.

Recruiters are finding that the bounty of perks for job seekers last year, like signing bonuses and flexible work arrangements, are being yanked. They’re also warning workers not to swap jobs as readily.

“People are saying: ‘Don’t just do a money grab. Make sure you’re unhappy where you’re at,’” said Tom Gimbel, founder and chief executive of LaSalle Network, a national staffing firm. “A year ago was a different world.”

Claudia Sahm, a former economist at the Federal Reserve, said the warnings that workers were receiving were prudent: If a recession is coming, people are likely to be more vulnerable to layoffs if they recently switched jobs or companies. But Ms. Sahm added that it was possible that a recession in the coming year would not bring layoffs as widespread as previous financial crises. Companies that downsized at the start of the pandemic, and then struggled to hire back workers, might be hesitant to cut their staff again.

Already this economic downturn is looking different from previous periods of financial crisis. While inflation has soared to a 40-year high, the job market has remained strong. A recent survey of more than 6,000 employers found that one-third intended to add workers through the end of this year, according to ManpowerGroup.

Still, some sectors are likely to bear the toll of the economic downturn more visibly, particularly tech and start-ups, which tend to over-hire in boom times and have already seen some waves of layoffs.

Atop the layoffs has come inflation that is straining household budgets. When food, gas, rent and other costs are steadily rising, a job search tends to feel more desperate.

“Everything going up definitely makes it harder to stretch a dollar,” said Zinida Moore, 41, who works weekdays at Walmart and weekends at Dollar Tree, and has been the recipient of a program providing guaranteed income, the Chicago Resilient Communities Pilot. Ms. Moore, who works 10 p.m. to 7 a.m., has recently begun looking for a position that would not require her to stay up overnight.

Jo Weech, 66, who has spent decades working in human resources, has felt the economic shifts like a gut punch. She lost her job this year and applied for dozens of new ones. She got through several rounds of interviews for one role over the summer — paying out of pocket for a hotel room by the interview site — only to be rejected over email. She sold her home in North Potomac, Md., in September to free up some cash.

Now she’s juggling contract positions while she looks for a full-time one. She can’t help feeling that when the economy went sideways, her life went with it.

“Before February you almost had your pick of jobs,” she said. “Then it flip-flopped.”