The lure of year-end bonuses has led to a decline in the turnover rate in the United States, but job vacancies are still close to historical highs, and many people still have no plans to go to work. Lack of people, increased money and inflation seem to be an endless loop. The shift in monetary policy has been nailed down, but at least in the near future, the United States still has to continue to explore the two seemingly contradictory factors of inflation and employment.
Resignation rate dropped
As the end of the year is approaching, many companies in the United States choose to use year-end bonuses to retain employees, which has also ushered in a long-lost drop in the turnover rate. On Wednesday, the Department of Labor’s Job Vacancies and Labor Flow Survey (JOLTS) showed that the resignation rate in the United States fell from a record 3% last month to 2.8%, the first drop since May, indicating that companies are keeping workers. Some progress has been made.
Especially in the transportation and warehousing, financial and entertainment industries, the number of resignations has declined, which may be related to the additional incentives for enterprises. On Wednesday, Devon Energy, the largest independent oil and gas company in the United States, announced that its 1,600 ordinary employees will receive a bonus check of $10,000 each. Prior to this, American meat giant Tyson Foods announced on Monday that it plans to issue a year-end bonus totaling approximately US$50 million to more than 80,000 front-line employees and hourly workers in its meat processing plant.
However, even if the turnover rate has declined, many jobs are still lacking people. In October, US job vacancies rose from 10.6 million in September to 11 million, higher than the 10.5 million predicted by economists, and jumped to the second highest on record. Vacancies in the accommodation and catering industry, manufacturing and education industries have increased, and American companies continue to face challenges in recruitment.
This means that despite the higher wages and bonuses, the company’s shortage of employees is still severe, and it may take some time for the supply of labor to keep up with the company’s demand. What makes the situation worse is that the spread of the Omi Keron strain has revived the pandemic in many places around the world, and the tightening of pandemic prevention measures and the risk of infection have made things complicated.
Right now, the labor shortage in the United States has even spread to the industry of “Santa Claus” actors. The salary of playing Santa Claus has risen by 15% this year, reaching $10,000, but there is still no suitable candidate.
Mitch Allen, the founder of HireSanta, a talent agency, said: There are currently about 3,000 Santa Claus job vacancies across the United States. The job content is to play Santa Claus in shopping malls, homes, and corporate activities. Not only that, according to the information collected by Allen, more than 300 Santa Claus artists have passed away from the COVID-19 disease, and more people are reluctant to play Santa Claus because of fear of infection.
In this regard, Wang Youxin, a senior researcher at the Bank of China Research Institute, said that at present, the labor market shortage in the United States is relatively serious. Although the unemployment rate has been declining, the labor participation rate has also been declining simultaneously, voluntary unemployment has increased, and many laborers have voluntarily withdrawn from the labor market.
Sequelae of water release
Under normal circumstances, the numbers of unemployed and job vacancies are relatively close. However, data from the Bureau of Labor Statistics show that 7.4 million Americans were unemployed in October, far below the total number of job vacancies, which means that millions of Americans temporarily chose not to join the employment force.
In this regard, Wang Youxin pointed out that a large part of the reason is that the United States has introduced financial subsidies for laborers and families, which has increased the excess savings of families and can meet daily needs even if they are not employed. Data from the Federal Reserve Bank of New York show that since the outbreak, U.S. households have accumulated nearly $1.6 trillion in “excess savings,” an amount much higher than the amount of 3-6 months of emergency savings, inhibiting the desire for employment, especially the desire for employment of low-income people. Therefore, the job vacancies in the US are more the aftermath of the aggressive fiscal policy.
Indeed, since last year, the United States has issued rounds of “life-saving money” to tens of millions of people in response to the impact of the COVID-19 pandemic. On December 27 last year, former President Trump signed a package of spending bills totaling approximately US$2.3 trillion, including the US$1.4 trillion federal government’s comprehensive spending bill, and a US$900 billion bailout aimed at coping with the economic damage caused by the COVID-19 pandemic. funds.
In March of this year, the new President Joe Biden signed another US$1.9 trillion “American Rescue Plan.” The plan increases the weekly subsidy for the unemployed from $300 to $400, and also provides an additional $1,400 in direct subsidies to most Americans.
Other analysts believe that affected by the pandemic, the American people are pessimistic about the development of the pandemic, while the catering, transportation, and manufacturing industries have high work intensity, low salary and low salary, and the risk of contracting the virus is greater. When subsidies are available, people are naturally unwilling to engage in this aspect of work.
In addition, compulsory vaccination has also become a factor that reduces people’s willingness to work. Many corporate employees have left their jobs because they did not receive the vaccination on time. According to a survey, 5% of unvaccinated employees in the United States have left their jobs due to the mandatory vaccination order, and 74% of respondents said that if they are required by their employers to vaccinate, they will leave their jobs.
John Taylor, CEO of the American Society of Human Resources Management, said, “We are very worried about the implementation of the mandatory vaccination order. The challenge is great, and we will lose employees. Another point is that from the perspective of the supply chain, we also need to question whether we should The mandatory vaccination order is implemented because we are entering the Christmas season and we need to prepare gifts for the children.”
However, even so, another survey from the U.S. Chamber of Commerce and Metropolitan Life Insurance showed that 61% of small business owners have implemented or planned to implement the vaccination order, and 43% of small business owners said they would lay off and refuse to implement the vaccination order. Employees.
Relief at the end of next year?
What cannot be ignored is that the labor shortage not only affects the job market, it has also become a major factor driving up inflation in the United States. In October, the U.S. inflation rate reached 6.2%, well above the Fed’s 2% target, and reached its highest level in 31 years.
According to an economist survey released by the National Association of Business Economics on the 6th, high inflation in the United States will continue until at least 2023 due to many factors such as strong demand, rising wages, and supply chain bottlenecks.
The survey shows that economists believe that supply chain bottlenecks, rising wages, and rising housing demand are the key factors that drive rising prices in the United States. Among them, 43% of economists expect that supply chain bottlenecks will begin to ease in the second quarter of next year, and 37% of economists expect to ease from the first quarter of next year.
The survey also shows that economists on average predict that the US economy will grow by 5.5% this year, and the economic growth rate will slow to 3.9% next year. More than half of the economists interviewed expect full employment by the end of next year.
However, a salary increase may not be a panacea. Due to rising inflation, income growth has basically been offset. According to an analysis by Harvard University Economics Professor Jason Furman, after adjusting for inflation, the current salary level in the United States is lower than in December 2019.
Furman said: “The overheating economy has pushed prices up more than wages. The employment cost index has fallen in the last quarter. If inflation is taken into account, it is 2% lower than the pre-pandemic trend.”
A survey released by Gallup Consulting on December 2 shows that 45% of American households experience financial difficulties of varying degrees, and 10% of households believe that financial difficulties have seriously affected their current lives; 71 percent of lower-income households are experiencing financial difficulties due to escalating prices and are most severely impacted by inflation.
Wang Youxin believes that the current job vacancies have severely affected the US supply chain and logistics, raising prices and wages, and the focus of monetary policy operations will shift from promoting the economy to preventing inflation. Source