National

Data: Committee for a Responsible Federal Budget, U.S. Bureau of Labor Statistics; Chart: Simran Parwani/Axios

More warehouse workers, fewer waiters. More health store employees, fewer in public schools: the overall job market is nearly back to full strength, but it looks strikingly different.

Why it matters: Pandemic-era disruptions have shaken up the composition of the labor force — with big implications for how industries will have to adjust to a longer-term worker shortfall.

What they're saying: "I'm not looking for recovery to pre-pandemic levels in each industry. Some workers have left for greener pastures and that's a good thing," Ellen Gaske, an economist at PGIM Fixed Income, tells Axios. 

"There is more opportunity for workers to return to new jobs — where the industries are growing and the outlook is potentially brighter. That churning is what offers up a possibility of stronger productivity gains and increased standard of living."

What's new: With May's payroll gains, roughly 96% of jobs lost during the pandemic are back. 

Stunning stat: The private sector has recovered 99% of all jobs lost, but public sector has regained just 58% — one illustration of the gaping hole that persists in certain areas of the economy.

Other industries have recovered and then some: the transportation and warehousing sector — think package couriers or truckers — has never made up a bigger share of the workforce, reflecting, for one, the historic appetite for goods. 

What's going on: A collision of forces — some structural, some cyclical and some already underway before the pandemic hit — are pushing workers away from some jobs and toward others, according to a recent report by Burning Glass Institute, a research firm. Among the changes ... 

The remote work allure: “The pandemic created this huge wedge. People want to move out of in-person roles — leisure and hospitality or education — and move toward the kinds of occupations and industries with more flexibility," Julia Pollak, chief economist at ZipRecruiter, tells Axios.

The goods spending boom: At the onset of the pandemic, stuck-at-home consumers bought more goods than services. But economists expect employment in consumer goods to cool off as spending on services continues to boomerang back.

Where the wages are: "Private sector employers have an advantage in this environment. They can adjust their compensation plan and policies very quickly," says Pollak. The public sector has been slower to respond, one factor perhaps pushing these workers to other gigs.

The bottom line: America's labor market recovery has been swift. The next test is which industries fully recover — and which don't.

America's new labor market

America has recovered 96% of jobs lost during the pandemic — but the labor market has never looked more different

Jobs

Economy & Business

President Biden has made the COVID-19 crisis and a post-Trump return to national unity and traditional democratic ideals his top priorities. From vaccinations to stimulus to schools, Biden is seeking bipartisan compromise while showing a willingness to use executive authority and bare Democratic majorities in the U.S. House and Senate to implement his policies. Republican leaders are navigating deep party divisions over if and how to move beyond former President Trump.

Politics & Policy

Tesla CEO Elon Musk said he is prepared to cut staff by about 10%, citing a "super bad feeling" about the economy, according to an internal email seen by Reuters.

Driving the news: Musk's email, titled "pause all hiring worldwide," was sent Thursday to Tesla executives, two days after he said that staff will be required to return to work in person.

Musk in a separate email to staff on Friday said that the salaried headcount will be cut by 10%, citing the company becoming "overstaffed in many areas," per Reuters. 

"Note, this does not apply to anyone actually building cars, battery packs or installing solar," he said, also noting that "hourly headcount will increase."

The big picture: Musk told Tesla staff this week that employees "should pretend to work somewhere else" if they're not willing to return to their offices. 

"Anyone who wishes to do remote work must be in the office for a minimum (and I mean *minimum*) of 40 hours per week or depart Tesla," he said. 

By the numbers: Tesla shares fell 8.5% on Friday after news of the hiring freeze emerged, CNBC reports.

Tesla and its subsidiaries employed nearly 100,000 people at the end of 2021, per Reuters.

Representatives for Tesla could not immediately be reached for comment.

Go deeper: Musk's WFH warning amplifies threat level for workers

Editor's note: This story has been updated with information on Elon Musk's email sent to staff on Friday. 

Austin

Austin Alerts

A daily look at the most significant and interesting stories affecting Austin. Written by Nicole Cobler and Asher Price.

Axios Austin Thought Bubble

Axios Austin

Report: Elon Musk wants Tesla to cut 10% of jobs

"Note, this does not apply to anyone actually building cars, battery packs or installing solar," Musk said Friday.

CEO of Tesla Motors Elon Musk speaks at the Tesla Giga Texas manufacturing "Cyber Rodeo" grand opening party on April 7, 2022 in Austin, Texas

Tesla CEO Elon Musk speaks at a Tesla Giga Texas manufacturing opening party on April 7 in Austin, Texas. Photo: Suzanne Cordeiro/AFP via Getty Images

Elon Musk

Ominous forecasts about the impact of climate change serve as the backdrop for the world — led by U.S. lawmakers and companies — to debate big action on the problem, which could upend energy systems and our way of life.

Energy & Environment

America's demand for workers is still hot: The number of job openings were near all-time highs and managers laid off the fewest employees on record in April, the Labor Department said on Wednesday.

Why it matters: The labor market remains tight as employers's appetite for labor outruns the pool of available workers. It's a boon for the American workforce, but a challenge for the Federal Reserve that wants to cool off the labor market to help tame soaring inflation.

By the numbers: Job openings ticked down to 11.4 million in April, close to the record high set in March (which was revised higher by 300,000, to 11.8 million job openings).

Some 4.4 million workers quit their jobs — roughly the same as the prior month, a sign that this closely-watched metric may be starting to level off, though at historically high levels.

The quits rate has soared as Americans trade up for, in most cases, better-paying jobs. The phenomenon had been particularly pronounced in the leisure and hospitality sector, but there was a drop-off in April: The quits rate fell to 5.2% in April from 5.7%.

Another industry, real estate, saw its quits rate jump from 1.9% to 3.5%. 

The bottom line: There are about 1.9 open jobs for every unemployed American, down from 2 jobs in March — a sign of an on-fire labor market.

U.S. job openings are near record highs

There are about 1.9 open jobs for every unemployed American.

A "Now Hiring" sign on a Long Island store

A hiring ad on the windows of the Advance Auto Parts store in Bay Shore, New York. Photo: Steve Pfost/Newsday RM via Getty Images

Labor economics

New York workers are dragging their feet in returning to the office, and crime is a reason why.

Driving the news: Office occupancy rates are languishing well below the national average, the New York Post reported this week. That's a drag on businesses that rely on foot traffic, and subway ridership struggling to recover from the pandemic. 

Ex-investment banker and author Carol Roth told Axios recently that there's a ​"high degree of uncertainty for those businesses who depend on in-person foot traffic."

Why it matters: The Big Apple is in the throes of a crime wave that’s diminishing the appetite of workers who, while perhaps fatigued by remote work, are worried  about an overall deterioration in public safety, delaying the city's revival. 

Yes, but: Labor Department data shows a slow but steady decline in remote work, suggesting that more workers are opting for in-person work, even if it's hybrid. 

NY keeps WFH vibe as crime spikes

Spiking crime has NY workers reluctant to return to offices

Illustration of an office chair moving from left to right, but slowing down and reversing before it gets all the way across the screen.

Remote work

It's not just the cost of borrowing to buy a home that's getting more expensive. Pricier credit card debt is also putting a squeeze on consumers who are relying more on plastic amid the worst inflation shock in decades.

Why it matters: For those carrying a balance, that debt is expected to get even costlier to pay off, as the Federal Reserve continues an aggressive interest rate hike campaign to tamp down red-hot price growth. 

"The prime rate may end the year at 6%. Add in credit card companies' average margin and that could push the average credit card rate a little over 19% — the highest we have on record," says Ted Rossman, a senior industry analyst at Bankrate.

Credit card rates — unlike mortgage rates — move with a lag in response to Fed policy.

By the numbers: Consumers have opened a record number of new credit card accounts so far this year — 11.5 million, according to Equifax. 

And in a sharp shift from a pandemic-era trend, credit card balances are growing again. Balances jumped consecutively in the final three quarters of 2021, before backing off slightly last quarter, according to the Fed's latest household debt and credit report.

Balances are still about 10% below the pre-pandemic peak. 

The bottom line: Amid the booming job market, delinquency rates remain at rock-bottom levels, though there's been a slight uptick in borrowers with lower credit scores starting to fall behind on payments.

Latest borrower squeeze: Credit card rates climb

It comes as some consumers rely more on plastic amid the worst price shock in decades.

Credit cards

Stock market

Retail

Axios Markets

Some are warning that the Federal Reserve's effort to slow inflation could potentially return the U.S. economy to the unusual condition it found itself in during the 1970s and early 1980s: Stagflation. 

The big picture: Despite high inflation, the U.S. economy is humming along — with unemployment at 3.6% in April —near the low levels that last prevailed in the late 1960s. 

Stagflation describes a highly unusual economic state of affairs when the economy is weak or stagnating — with high or rising unemployment — yet inflation is also elevated.

This is the opposite of what usually happens. 

High inflation tends to break out when economic growth is really roaring. 

Periods of weak economic growth, and rising joblessness, are typically accompanied by slow price increases, or even falling prices.

While the annual pace of price increases have surged to 40-year highs in recent months, unemployment is incredibly low.  This is an inflationary environment, not stagflation.  

When's the last time we had stagflation? 

The best-known stagflationary episodes hit the U.S. in the 1970s and early 1980s, when a series of oil shocks — especially the 1973 embargo that Arab members of OPEC placed on the United States in response for military support of Israel — sent fuel costs and inflation surging, as unemployment simultaneously shot higher. 

The combination of energy shocks and stagflationary conditions lasted on and off  into the early years of the Reagan administration. As late as 1982, unemployment was hovering around 10% and prices were rising as much as 6% annually. 

A number of economic policy bigwigs — former Federal Reserve chairman Ben Bernanke, current Fed chair Jerome Powell and Treasury secretary Janet Yellen (who also led the Fed) — have recently either implicitly or explicitly suggested that as the Fed tries to bring down inflation, unemployment will likely rise. 

That will likely mean we'll have an economy that is sort of stagflationary, at least for some period of time. In other words, growth will be weakening, but inflation will still be high.

Treasury Secretary Janet Yellen on Wednesday: "The economic outlook globally is challenging, and uncertain, and higher food and energy prices are having stagflationary effects, namely, depressing output and spending and raising inflation all around the world."

Bernanke in a New York Times article published this week: ''Even under the benign scenario, we should have a slowing economy ... And inflation's still too high but coming down. So there should be a period in the next year or two where growth is low, unemployment is at least up a little bit and inflation is still high,'' he predicted. ''So you could call that stagflation."

Powell told the Wall Street Journal this week: "I would say there could be some pain involved in restoring price stability."

What can Biden do about stagflation if it actually occurs?

Not much that wouldn't be politically unpalatable. 

Biden could propose a sharp reduction in federal deficit spending. That could help reduce inflation, but it would likely hurt growth and raise unemployment. 

He could attempt the kind of wage and price controls that President Nixon imposed in 1971, though that seems extremely unlikely and not particularly effective. 

He could basically let the Fed deal with it. That's essentially the path Jimmy Carter took in the late 1970s. The soaring Fed rate hikes and the deep recession that followed contributed mightily to his annihilation in the 1980 presidential election.  

The bottom line: Like we said above, we don't yet have stagflation. It's possible that the Fed is able to thread the needle so perfectly that inflation comes down easily and unemployment raises ever so slightly and nobody notices. 

But stagflation is a possibility, and an unappealing one for practically everyone. 

What stagflation means and what Biden could do about it

High inflation tends to break out when economic growth is really roaring.

Illustration of a dollar sign covered in cracks with pieces of tape over the cracks.

Stagflation

American workers have the upper hand over their employers right now — and there are tentative signs it could last, even as economic storm clouds gather.  

Why it matters: Put simply, your boss needs you more than you need her.  And it might stay that way, at least for some workers, particularly those on the lower end of the wage scale.

The big picture: There just aren't as many workers these days, as demographic forces were supercharged by the pandemic. 

"The labor supply has shrunk, which gives workers more leverage, more bargaining power and pushes employers to compete harder and improve job quality," Aaron Sojourner, a labor economist at the University of Minnesota, tells Axios.

State of play: It's a tight labor market, with unemployment near a record low. And, crucially, there are jobs! jobs! jobs! for almost everyone who wants one  — 1.9 jobs for every unemployed worker according to the latest BLS data.

Headwind ahoy: Fed chair Jerome Powell called this labor market "tight to an unhealthy level" in March, when there were 1.7 jobs for every worker. The Fed is raising rates in an effort to cool things down, which could mean higher unemployment rates. 

Yes, but: There are a few reasons workers may emerge from this tightening period with their power intact:

Baby Boomers are finally leaving the stage. Labor force participation for those 55 and older is nearly 2 points lower than in February 2020. 

There aren't as many Millennials or Gen Zers to replace them, as Axios chief economics guru Neil Irwin has written.

People with long COVID, or who are facing child-care pressures or even dealing with substance abuse, are also missing from the labor force. So are a large number of immigrants.  

And regardless of the tight market, a lot of folks may not be willing to put up with the same old mistreatment. They've been through a traumatic experience since March 2020.

"A lot of people felt kind of pushed around," Sojourner said. "Either they were laid off or they were asked to do a lot of things they hadn't signed up for."

Now those folks are rethinking their relationship to work. There's a "re-sorting" happening, said Chicago Fed president Charles Evans recently. 

That's good for workers and "painful" for some businesses. "[T]here are just a lot of businesses where their business model probably isn’t going to work the way it used to," he said.

What we're watching: Workers' empowerment is also creating the rumblings of a resurgence in union organizing, although unionization rates in the U.S. are still stubbornly low.

There were 661 new union filings in the first quarter of 2022 — these are petitions from groups of workers seeking to hold union elections. That's up from 448 in the same quarter in 2020 before COVID, according to data tracked by Kevin Reuning, a political science professor at Miami University. 

Whether or not these filings result in newly unionized workers is the open question when it comes to worker power.

The bottom line: The pandemic-fueled demographic forces at play here tightened the labor supply to such an extent that even if the economy slows, these newly emboldened workers may get to keep their leverage.

Workers' leverage is here to stay

Workers' power may outlast a slowing economy.

Raised fist with little raised fists in it

Employment

This week, the 500 employees of Axios will get together in person — for our first company-wide retreat since the pandemic hit. 

Why it matters: A staggering 75% of our colleagues joined after March 2020. So most of them will be experiencing Axios in person for the first time. They've never set foot on a piece of Axios real estate, and they've never met most of their coworkers in real life.

This is the reality for companies all over the world.

Zoom out: In our work-from-anywhere world, the company retreat is more essential than ever.

Remote work has a slew of benefits — from flexibility for workers, to a limitless talent pool for employers

But it strips away the togetherness and serendipity that makes companies stronger and bolder.

Zoom in: Very early in the pandemic, the leaders of Axios decided we'd be remote first, forever. That was based on two hunches, both of which have proved correct: 

Offering remote work to all hires gives you an edge in the battle for talent — the whole game for a growing company. 

Whatever return-to-work plans an organization made, they'd have to change them. So why not just start with an employee-first approach?

Our thought bubble: Our staff, like most, has proved incredibly productive and resilient in shutdown. But we started warning early that employers were taking a false signal from the success they were having with work-from-home.

Yes, there were advantages, including the time saved from not commuting. But there was a real price in culture and creativity — the intangibles that come from spending unstructured time together, without the transactional, agenda-driven structure of a Zoom.

In a new study, researchers found that people are less creative in virtual meetings than live ones.

What's next: Schedule innovation. Bring teams together at retreats to germinate the next set of great ideas.

This doesn’t have to be in person. Bosses won’t get anything out of forcing people to show up when they’re concerned about child care or health. The standard video meeting may stifle brainstorms, but you can retreat in the virtual world. 

The new world of work has spurred a whole industry around remote creativity — including virtual golf outings via VR headsets.

Most will do what we are doing: a mix of team, regional and all-staff gatherings to spark human connections — and fresh ideas.

The bottom line: Pre-pandemic, 8% of U.S. office workers were fully remote. Now, 32% either are remote or want to be, per Gallup polling. And most others want hybrid work.

That's a third of your workforce that relies on well-organized, fun retreats to soak up company values and forge friendships.

The future of retreats

A staggering 75% of our colleagues joined after March 2020.

Illustration of a vintage postcard that reads "corporate retreat"

Axios Closer

Amazon is partnering with the National Immigration Forum, an advocacy group based in D.C., to help refugee and humanitarian-based immigrant employees obtain citizenship, the group announced Monday. 

Details: The partnership is an extension of Amazon's Welcome Door program, which launched about a month ago.

Through the program, eligible Amazon employees receive free social, legal and financial support, such as mentorship, skills training — which includes college tuition — and reimbursement for work authorization fees.

The program has been offered to employees in the U.S. starting in April, with the company planning to expand it globally by the end of the year.

The big picture: Amazon and nearly three dozen major companies, including Facebook, Uber and UPS, committed to hiring and training Afghan refugees last fall.

In March, more than 50 companies, including Amazon, vowed to support people fleeing Ukraine. 

What to watch: The U.S. expects to admit up to 100,000 refugees from Ukraine. More than 76,000 Afghans have been brought to the U.S. so far this year. 

Amazon will help refugee employees obtain citizenship

The company is partnering with the National Immigration Forum.

The George Washington Bridge hangs its 60 x 90-foot American flag from the New Jersey side tower to mark Memorial Day as an Amazon truck heads to New York City on May 31, 2021 in Ft. Lee, New Jersey. 

The George Washington Bridge hangs its 60x90-foot American flag. Photo: Gary Hershorn/Getty Images

Amazon

Immigration

The work from home revolution, grudgingly embraced by Corporate America, has evolved into a thing that workers both love and hate.

Why it matters: This week, an Atlantic article confirmed something knowledge workers have known for a while: Remote work has led to much longer hours, and a grueling schedule of meetings that underscore the limits of flexible arrangements.

Driving the news: JPMorgan CEO Jamie Dimon, a notorious scourge of remote work, abruptly reversed himself in his annual letter published this week. 

Dimon’s volte-face is a reflection of a broader vibe shift on Wall Street, bowing to the realities of a workforce still reluctant to return to cubicle life. 

But some employers are hitting workers where it hurts – in their wallets – to get them to return to the office, according to Fortune.

What they’re saying: NBCUniversal News chair Cesar Conde told Axios’ What’s Next Summit that “a hybrid, flexible work environment is a net-net positive and will be an ongoing part of our culture.” 

Yet Conde also emphasized “the power of proximity” (i.e. in-person interaction) as something the news giant aims to “recreate.”

And in his letter, Dimon insisted that remote arrangements would “need to work for both the company and its clients.”

State of play: Demand from digital nomads have spurred a boom in co-working spaces, but raise questions about why it’s more suitable to camp out in a public space than a traditional office. Meanwhile, some employees have sued their employers to recoup unreimbursed costs from WFH outlays.

Out thought bubble: Axios' Emily Peck and I have both chronicled the growing downsides of being a member of the Zoom class, including virtual meeting fatigue, and the resulting drag on service sector activity. 

The bottom line: The way we work now has clear benefits, but comes with trade-offs. In the coming months, some bosses may well decide that WFH isn’t worth the compromise, or the strains it puts on employers and workers.

WFH revolution showing signs of wear

The movement, grudgingly embraced by Corporate America, is creating negative ripple effects.

Illustration of a pillow on a couch in the shape of a wifi symbol

The next U.S. jobs report could be a big market-moving event.

Why it matters: The Fed wants to know if the U.S. labor market has made “substantial further progress,” the vague threshold that would give the FOMC the confidence to dial back some of its emergency bond purchase program.

By the numbers: According to FactSet, economists estimate U.S. employers added 756,500 jobs in August, which would be a slowdown from the 943,000 added in July.

The unemployment rate is estimated to have fallen to 5.2% in August from 5.4% the month prior.

What they’re saying: “The softening in employment activity would be consistent with other economic data that have weakened since the surge in COVID case counts due to the Delta variant,” Bank of America U.S. economist Joseph Song says.

“Related to that,” Wells Fargo economists write, “the FOMC is likely to again consider deteriorating public health conditions as a detriment to ‘substantial further progress,’ which removes some heft from the August employment report when it comes to determining the timing of potential tapering.”

In other words, assuming job growth did decelerate significantly in August, then the FOMC may wait until after its Sept. 22 meeting to announce the timing of tapering.

What to watch: The August U.S. jobs report will be released at 8:30am ET on Friday.

Go deeper: The harm the Fed wants to avoid by tapering too early

What economists expect from the August jobs report

The Fed wants to know if the U.S. labor market has made “substantial further progress.”

A man walks by a "Now Hiring" sign outside a store in Arlington, Va.

A man walks by a "Now Hiring" sign outside a store in Arlington, Va. Photo: Olivier Douliery/AFP via Getty Images

Jobs report

Axios Future

A survey of C-suite executives found more than a quarter are considering moving their operations to another state or country.

Why it matters: The forced march to remote work during the pandemic has shaken loose the bonds that tie large businesses to their home territory — and that could be bad news for high-cost cities and states.

By the numbers: In a poll of 150 C-suite executives released today and conducted by the consulting firm West Monroe, 29% of companies reported they were considering moving major operations or headquarters to another state or country.

The biggest reason was the cost of talent and living in their current location, followed by the burden of taxes.

Not surprisingly, the No. 1 destination under consideration was Texas, followed by Florida — two states with generally low costs of living and low tax burdens.  

Of note: West Monroe's chief strategy officer Tom Bolger tells Axios the West Coast "had by far more companies looking to relocate than any other geographical area in the survey."

That dovetails with recent reporting about tech companies and founders looking to relocate out of the Bay Area, which has some of the highest housing prices in the country.   

That includes Tesla and SpaceX CEO Elon Musk, who said in December that he was moving from California to Texas. 

Be smart: Companies complaining about the high cost of living and working in states like California or New York is hardly new, but the embrace of remote work — accelerated by the pandemic — has given workers and CEOs more options.

New survey shows companies are open to moving to cheaper locales

Remote work — accelerated by the pandemic — has made it easier for companies to seek out less expensive regions

Sections

Axios Local

Axios gets you smarter, faster with news & information that matters.

About

Subscribe

All Jobs stories