The Week in Jobs: Unemployment Claims Hit a 57-Year Low, but 93% Say Wages Aren't Keeping Up

Speaker A: Welcome back to the weekend jobs. Today is Friday, July 24th. Peter, how are you today?

Speaker B: I'm doing great. Like I said, it's Friday, so, uh, I'm ready to get started.

Speaker A: It's Friday. Another week, some big news, but not a whole lot of stories. No, no big layoffs. No one's panicking about AI this week.

Speaker B: So is that good or bad that it's a, it's a more quiet week?

Speaker A: Well, it's, it's actually good. And you know, we have such a, we've had such a string of bad news. It's nice to have what is objectively good news. I don't think there's a way to put a negative spin on the big story of this week, which is the unemployment claims. They come out every week, they don't move too much. But this week's number really jumped out at us because it's a historical low in new claims that went in, reported by the Department of Labor. Shockingly low. A 57 year low. That's a big deal.

Speaker B: Yeah, I mean, 1969 was the last time. Now, before we get into this though, do we need to caveat this by saying that it is the government? So are they going to revise these numbers at all?

Speaker A: You had to say it. I was considering just letting that pass and not bring it up. But yes, it is the government. Now, they don't really revise these very often. They do occasionally, but directionally this is still a big deal, even if they revise it slightly the last time initial claim. So that means new claims that were put in. So typically these are impacted by big layoffs. I didn't really see any of those this week, but it's still a really big number, even if they come back and adjust it a little bit.

Speaker B: Yeah. And I know we've talked, you know, all over the past weeks about layoffs and it seems, it can seem a little bit doom and gloom if you go from week to week talking about this. But in the grand scheme of things, these layoffs that we are seeing, they're not huge chunks of the workforce. So that just goes to show that the workforce overall, most people who want to work are working. And we're not having these huge issues of mass unemployment.

Speaker A: And as we talked about last week, currently there's about one open job for every unemployed worker. So the balance is there. I mean, that's about as good as we can hope for. But, uh, as we know, many people feel like it's a tough job market and you really see that a lot on social media. But in reality it's a very healthy market. It's as healthy as it's been in a long time. We saw a lot of hiring post Covid, but I would argue that's not really healthy when. Because the pendulum was so far in one direction and this balance is good. I mean, it's, it's. Look, we always want to see a lot of job openings. We want to see significantly more than there are people looking. That, that feels good. But on paper things are pretty strong right now. Yeah.

Speaker B: And it's, it's like you said, it's, it's. On paper things are good. And I know lots of people maybe watching this are not maybe feeling like it's good. Um, the upwards mobility is maybe not there for people. And we know that there's all sorts of issues with just the job market as a whole, um, with job seekers and job postings. And when we talked about that last week with the whole fake jobs thing, um, so this is not to say that like everything is, is all sunshine and rainbows, but it is, it is nice to have a little bit of good news come, uh, through on this, this job market.

Speaker A: Why do you think that negative sentiment exists? Is it just the, the vocal minority? Because the data that we see in surveys, our own survey, all the ones that I look at, show that it's a generally pretty satisfied workforce. People are happy with their jobs. They're not looking, uh, in great numbers. Now part of that is because they don't believe it's a good job market. It's not necessarily reality. But why is that sentiment so negative, do you think?

Speaker B: You know, I think it's just with the rise of social media and the Internet and just as a whole, like, everything just seems kind of chaotic right now. And maybe that plays into the job market. And I know we've got, we've looked at some, uh, some of the other surveys, indeed had their hiring lab survey basically, um, said that hiring is kind of frozen. And I think that that coupled with the job, if you are on the job market, it can feel like things aren't moving. And maybe that's. That stagnant feeling leads people to feel frustrated. So I think while the great number of people might not be in that issue, and maybe they are, they're content with their job. They feel like if they wanted to advance in their career, if they wanted to find another job, they wouldn't be able to. And the people that are out of work just because of how convoluted things have gotten it Just leads to a, uh, while not a panicked, uh, feeling, it feels just kind of generally more depressed.

Speaker A: So maybe stay off social media a little bit.

Speaker B: It's not good for your mental state. You go on LinkedIn and look at some of the people, uh, and talking about their job search experience and uh, it is a little disheartening to hear.

Speaker A: Well, and it's also not realistic to focus on the peaks at the peak of COVID layoffs. There were millions of initial unemployment claims hitting in a single week. So that is not normal times or was not. And then post Covid, the excessive hiring that was happening, the wages that were spiking, that wasn't normal times either. But I think, uh, my impression is people are holding on to that feeling. When it was such an employees market, it wasn't realistic, it was never sustainable. Um, and so if that's what you're waiting for, or looking for to consider the market to be good, well, that's probably not going to happen, at least not in the foreseeable future.

Speaker B: Yeah, I think just from what I've seen over the last decade, it seems like when there's a lot of companies that are doing a lot of hiring, everything else kind of is irrelevant. That is the thing that makes job seekers feel like there's movement in the job market. There's companies that are bringing on people. So while there may not be a lot of layoffs right now, the fact that companies aren't hiring at an aggressive rate or you know, even a very positive rate, that is what lends itself to that feeling of just the job market is not great.

Speaker A: Yeah, and that's fair. Uh, but historically what's happening right now is good. We can't deny that we typically look for clients, unemployment claims, initial claims, uh, under 250,000 to be consistent with a healthy job market. These were under 200,000, 187,000 to be, I'll say precise. But that's. We know it's not really precise because they are government numbers. Although again, these numbers hold steady more often than not. But it's a good sign. And we have to acknowledge the good. We talk about the bad so much, we have to call it, go call balls and strikes as we see them, so to speak. And right now things are pretty good, even though we know most or many people don't feel like it. And I do wonder. We didn't talk about inflation yet, but that has to be a driving factor as well. Because if you don't feel like you're getting ahead, you're Going to be frustrated regardless of what the data shows.

Speaker B: Yeah, I mean, the fact that people feel like their paychecks are not going as far as they used to, that's down definitely playing into it. While people, um, that are in jobs, for the most part, they're as secure as they've ever been. Um, just the fact that if you're not getting a constant raise that's higher than inflation, you're feeling like you're making less money every year, even if supposedly you're going up. So I think that at least from the candidates that I've talked to, that's definitely something that is weighing on people's minds.

Speaker A: And at the end of the day, no one really cares about these big numbers. They care about what impacts themselves.

Speaker B: Well, you think about it. So what is the, what is the best way to grow your salary? And it's not necessarily to stay at a company and expect incremental raises every single year. It's to jump companies. And because we know that going from roll to roll, you know, every couple of years you're going to get a 10, 15, 20% raise on average versus say 3, between 3 and 5%. And if you're, you're feeling secure in your job right now, but you don't feel like you have the options to go move company to company, that is really going to slow your, your salary growth.

Speaker A: You're right. So, and the government measures those numbers too, or reports on them. Job stayers versus job changers. And we saw a spike similar what we talked about a minute ago post Covid, where job changers were getting rewarded to a degree that just wasn't sustainable. It wasn't normal, wasn't something that was going to last. So those numbers have come down. So as you're saying, I think that does make a lot of sense. Not as many job openings as people would like, not as many that existed relative to the number who are looking just a few years ago. And now even changing jobs isn't carrying the same financial boost that existed a few short years ago. So there's a lot, there's a lot of reasons to feel that negative sentiment. But I think the fact that companies aren't laying off with significant numbers, despite what you see in the press, we see Oracle, we see Microsoft, we see Amazon. Those happen. But, uh, for the most part, small to medium businesses are doing well. They're looking for workers, not getting rid of them. So it's not a bad time to be in the job market, even though it may feel that way.

Speaker B: Yep. Yeah. I think that, you know, it's obviously better than the alternate. I would rather have a slightly, you know, depressed atmosphere than, uh, panic and, you know, companies having huge layoffs and whatnot, like we saw during COVID Um, I just think it slowly chips away at people's morale maybe, and that they, that's kind of what contributes to just a general down. It's not. Nobody is, is really feeling, feeling panicked. Uh, well, the general, general majority of people are clearly not. And we can see, like you said on paper, it's. It's doing well. Um, I would just look for maybe a little bit more, um, publicized growth on some of these companies. And obviously we can go into AI and people's fear of AI, you know, changing the job market in the future. And I think that uncertainty kind of certainly lends itself as well.

Speaker A: There's some positive news on that too. But before, before we get to it, I do want to talk briefly about a report that did come out that supports more, More of this feeling. Uh, it came out from Monster this week where 93% of people feel that their wages aren't keeping up with cost of living. So no matter what you see in the headlines, if you're one of those 93%, which is almost everyone, of course you're not, uh, going to be happy. So it doesn't really matter that the job market is healthy if, if your own financial well being is not.

Speaker B: Yeah, I know. And we've talked about people having to dip into their savings, I think from this report. Yeah, so 85% of people were even reporting having to dip into their savings just to keep up. That's never a good thing to hear. Um, we, we've talked weeks ago about people having, you know, in our, even in our surveys that we were. We, um, uh, we perform the amount of people that are. That do not feel like they're able to contribute to their savings in a meaningful way is just too high. So I think that as long as we have this, this wage, uh, stagnation, I think that, that we're going to kind of. We're never going to get to the sort of positive feeling that we want to see, um, on for job seekers.

Speaker A: Do you think that can even come back? Unless we see the extremity of 2022, are people going to be satisfied? We know that workers, m. In many cases don't like having to come to the office anymore. Uh, people don't want to work more hours than absolutely necessary. So is that as much of a culture thing, societal, uh, reflection on Society where we are now, uh, where that satisfaction is just probably not to be.

Speaker B: Yeah, I think that that's going to have to be. I mean, you know, we'll have to look at, we'll have to look to Gen Z, um, to hopefully uh, try and, and fix that. Um, I think that that's going to be something that they're going to have to kind of push through and maybe that's don't. Right now people's wages are kind of, they're stuck and you know, things are becoming more and more expensive. So hopefully that, that, that's something that uh, we'll have to see a societal change I guess on or we just

Speaker A: hope that Elon proves to be correct, that work will be optional. High income.

Speaker B: We need to get a uh, universal basic income.

Speaker A: Well he, he seems to think it's, that it's life is going to be much more fruitful than that. The robots are going to take care of everything for us. We're all going to be living to an extremely high standard and, and not have to work. So um, we'll see. I don't know that we're going to be around to see that, but it sounds nice. I wouldn't, wouldn't count on it.

Speaker B: I mean, yeah, it would be, it would be great if people could um, you know, just work the jobs that they want to work and work. And I think that, you know, we've even seen, there's been many, many studies about people who retire and just having a purpose in your life, having work. Like people like oh, well, no one would, no one would work. I don't think that that's the case. I think having some sort of purpose, having some sort of task that, you know, you get up for every day, that's been proven to be good for people. So I think that even if we did go down to some sort of utopian scenario like that, I, I think that ultimately people are going to want to have something to do every day.

Speaker A: Well that doing what they want to do versus what they have to do, I think that would make a big difference. And uh, that's true. Yeah, we'll see. We'll, we'll. We have time, we have time before we have to start worrying too much about that. And I think we also have time for AI replacing us at all. That fear for me anyway continues to subside. M. I admittedly was more concerned about job displacement a year ago than I am now because I know the potential is there and I very much believe the potential is there. Although the Adoption is not and where AI is settling. According to Google and a report, a ah, survey that they reported on this week, it's the first one uh, of its kind that they did. They're really stressing that they believe that AI is going to be an assistant, not a replacement. So it's going to help workers, not uh, replace them. What's your take on that?

Speaker B: I mean I try to take that kind of thing with a grain of salt. Just, just, just because it is Google and they're selling the product, it's obviously in their best interest to make, to make it as palatable as possible to make sure that people feel comfortable. They're not going to come out and say hey, AI is going to take all your jobs like that. They strictly, they'll never say that. So I, I think it's good that they, you know, they have this, they came out and they're saying all these things. But um, I'm m, I am still hesitant to like believe what they're, what they're going to say.

Speaker A: Well I, I, where I believe this survey based on my own interactions and, and firsthand experience is they said it's being used in a shallow way. That shallow is the word that they used.

Speaker B: And I, that I can see, I

Speaker A: absolutely agree with that. Most people aren't going nearly as deep as they could. Whether it's their organizations won't let them. The bigger the company typically the more restrictions they have in place on general and what could be deep AI use. They're worried about mitigating risk rightfully. So they can't just turn this, turn all their employees loose on using AI to its maximum capabilities. We know that. But even small businesses I think just don't have the time to invest. They don't want to change their habits. And so that shallow use of using AI to help you do some simple things I think is what's most prevalent right now. And, and so because of that I agree with them. I think very much. Again the potential um, is not even close to being maximized at this point and how long that's going to persist, who knows. But I agree with them. I think that um, fear of uh, displacement, um, isn't pressing.

Speaker B: Yeah. And that part I do agree with the shallow nature that people are using it. And I, I mean I said this last week. I think we've gotten to the point where AI development is exceeding humans willingness to change or ability to change. People are not going to develop exponentially like they, people get stuck in habits. People, I like doing things this way, it's always work. So right now we're going to see it's human. Adoption is going to be the limiter on this. I think people like doing things a certain way. They feel comfortable doing things a certain way. And as much as, you know, some people love, love to change and love exciting new things in general, people don't like change. They are resistant to change. And that is, I mean that is a universal human fact. People can say that they like it all they want, but there is comfort and familiarity. And if you've done something a certain way for, and it's never been a problem for you, you can look at something and say, oh well, it's more efficient to, to do it the this way. But it's not going to be something that you just jump into and you're are constantly wanting to, to relearn tasks. I think that's going to be things that companies see. They're going to see their workforce being more hesitant to change things that, you know, it's not broke, don't fix, you don't need to fix it.

Speaker A: Do you think there's a catalyst that will lead to adoption picking up? Because I, I, I assume you agree with me. You can tell me, if not that the potential is not being close to reached right now.

Speaker B: Oh, no, no. And I think the potential is, is there and I think it's going to, there is. The adoption will continue increase. I just don't think it's going to be at some sort of exponential, you know, rate. I think that it's going to just continue to increase over time as say at the basic level, somebody learns that they can rewrite their emails, okay, well now they can rewrite some other thing that they do and then they just build on that. It's not going to go from day one of the, you know, I'm used to doing everything manually to now everything is automated. It's one task, then two, then three, then four. I just think that the rate of change for workers is going to be slower than it was anticipated by a lot of the, you know, the AI gurus.

Speaker A: Well, given our usage of it, we know how powerful it can be because I would consider our usage to be anything but shallow. It's deep and it's getting deeper almost every day. Do you think there's going to be a separation between those companies who are using it and individuals, whether, whether it's the business itself or just the individual who's advancing in their career and those who don't? Or do you, do you think it's not going to be that extreme where if you're not on that curve already, your risk, your risk of being left behind or my. I don't know if there's necessarily dramatic.

Speaker B: I don't know if there's going to be a, necessarily a separation. I think that because of some companies, you know, that are going to adopt it more, there are going to be certain baselines that we're gonna have to see. You kind of either have to get with the program or get out. And so that, I think that's, that external motivating factor is what's going to force some people to adopt it in a faster rate than maybe they would have otherwise. Um, I just think there's going to be very, it's going to be a spectrum of, of um, usage once you hit that, say, baseline level of automation that's required to function in a specific industry.

Speaker A: Yeah. Well, you and I presented on a webinar this week a uh, tool that we're using. And this is one that is um, an off the shelf. That's probably not a fair way to describe it because we've customized it heavily. But it wasn't something we built in AI. It was an AI tool that we purchased and continue to use every day. We presented that to a group of peers in the staffing industry and you could tell based on the feedback, the questions we were asked, there were a few people who were really excited about what they were seeing and followed up immediately, wanting to get more information to be connected with the vendor. Um, but for everyone else who saw it, it just didn't have that same effect for whatever reason. And I truly believe that those who are willing to change their habits, as you said, most people aren't, but those who will, I believe they're going to benefit greatly. And those who aren't, I think this technology is so disruptive they're going to regret it when it may be too late to do anything about it.

Speaker B: Yeah, I think that there's definitely going to be some advantage to automating certain things in the market. Um, it's, you know, we'll see. It's too early to see if the people who are waiting are, are going to um, decide that those who got in early are benefiting so much that it leaves them behind. I don't know if there's going to be necessarily a divide, um, or if it'll be companies that are doing great and then just companies that are doing good, you know, and the great is maybe the ones that have had found these efficiencies in these automations but the other ones are just okay, you know, chugging along. Um, but it's definitely, there's, there are people who are just kind of sitting by the wayside and they're like oh well yeah, it's something I know about but I'm not really implementing myself. And we've seen, just showing, you know, any number of laymen, oh you can do X, Y and Z with it. And people are like oh, I never even thought about that. And it's like a basic function of you know, certain different AI tools.

Speaker A: So I was surprised. I just came back uh, last night from two days with my uh, my youngest son who is college orientation and I did not hear AI mentioned a single time. I saw it listed in some of the classes that are available but it wasn't mentioned a single time and I was very surprised by that. So two days of the kids, young adults learning what to expect uh, for their new college experience they're about to undertake and AI wasn't mentioned at all. And I thought that was so surprising. It just hasn't, it's still not as mainstream as I think it should be.

Speaker B: Well is it uh, is it mainstream or just you know, from what I've seen, is it the younger generations are, they're kind of anti AI from what I've seen. I, I have, I've met far more, you know, 20 somethings and even teenagers who are against AI than I have people who are like, they're either neutral or they're kind of against it. I haven't really met too many who are like oh yeah, this is awesome, this is the new thing. And I wonder is that going to stable that we're going to have everybody under X age. The general you know, thought for the, for, for them is that this is either something I am um, neutral about and I'll use it when I have to or I'm like, I actively dislike it.

Speaker A: That's, that's kind of a crazy thought is, isn't it that young people rejecting advanced technology.

Speaker B: Well I mean you've got these companies telling them like, you know, now we're kind of, they're shifting their tune. But we had even a year ago companies talking about hey it's going to take your job, it's going to take, you know, it's going to make your, your future obsolete. So I can kind of see where if you're in school at this time and you're learning, hey, AI is going to make my degree not even meaningful anymore. And I'm going to have to change my whole future. I can see where they're like, well, maybe I shouldn't, I shouldn't actively like work against myself.

Speaker A: Yeah, I mean that's a, it's an interesting um, topic to consider. We could probably talk for hours just about that. That's a little off topic for this, for this show, for the week in jobs. But these are, this is a future workforce. And whether they want to just because you don't want that to be the case or you don't want how it's going to impact jobs and careers and business, that's not going to stop it from happening. So better to be aware of it, better to be involved. Uh, I certainly believe that. Um, I was just surprised the university itself wasn't mentioning it as, uh, you

Speaker B: know, even in it, as part of their, uh, their orientation. Well, maybe they, maybe they leave it to the classes or it's a later date type of thing. I don't know.

Speaker A: Now I could tell that a lot of the slides being presented were made, so there is that someone's using it. But, um, look, this continues to be a story that's unfolding every day. And the last real story for us this week, this was kind of, well, it wasn't kind of. It was a very quiet, uh, week in the job market is that Amazon announced reductions in their AGI group, their Artificial General Intelligence group. So of all places, this is the most advanced AI development that's happening, is trying to reach AGI. They're cutting staff there. We don't really know why, but I, I found that surprising.

Speaker B: Yeah, it was definitely interesting. Um, it kind of seems to go along with the theme that we're seeing that like big tech is like they're being more focused and narrow on like the areas that they're growing in their, their AI departments or whatnot. Um, maybe it has something to do with, uh, just AGI as profitable as some of the other automation areas that they could be putting their money into. I don't know.

Speaker A: Yeah, we're going to find out, uh, probably more. Well, we probably won't find out more on that. They're not going to share the details publicly. But once again, directionally I think that that is, um, that is not where I thought that they would, they would be.

Speaker B: Yeah, it's just an interesting sign compared to like where we would have thought things would have gone a week, uh, you know, a year ago with everything kind of going gangbusters. And now we've got companies that are downsizing Certain AI departments Or is it

Speaker A: because the AI is writing the AI and they don't need as many people

Speaker B: that they've already gotten to that, to the stage and they just don't want to admit. I don't maybe. Well, we know all their earnings reports.

Speaker A: We know that, uh, many of the top developers are very publicly and unabashedly saying that they are using AI to write code for them now because it's better, faster, more efficient. So I have to believe that that's a big part of it, uh, because the models that we see are not the most advanced models, the ones that are released to the public. So I can't even imagine how advanced the uh, tools are that they're using on a daily basis. It's probably be frightened. Well, you did see the news from OpenAI where one of their models in, in theory, in a sandbox environment not connected to the Internet, found a way to work through their local network to get Internet connection, to get an Internet connection and hack into another company to get some data that it wanted. So that was addressed publicly, that wasn't a rumor. OpenAI had to, uh, fess up to it. So when you see that stuff, it makes you a little, uh, can't help but make you a little nervous.

Speaker B: Yeah, just seeing the kind of capabilities and power. Um, yeah, the people in that I know that are high up in IT and uh, they're freely admit, they use it all the time. But then again, if you think back to years ago, it's always been kind of the case. Like every IT person I know freely admits and talks about how they use Google constantly, all the time to look things up and just do research. And it's more having the skill of knowing what to Google and knowing how to do this critical thinking. Then they're not memorizing all this information. So maybe this is just the next step in that, that they're not having to know how to, you know, they're not having to write every single line of code, but they still need to have the knowledge to look at a bunch of code and know what's wrong and what's right. So, yeah, that's going to be my optimistic view of how the workforce is changing and not that all these people are just going to get laid off in the coming years.

Speaker A: No. Well, that's a, that's a positive note to end on because I think you're right about that. I didn't necessarily think we're going in that direction, but, um, I think the ramp's going to be slow. I think no one should be very worried right now, but everyone should be aware and, and paying attention and using it. And that's the biggest, the biggest thing because, um, it can improve you, if nothing else. Maybe it's not about losing your job. Maybe it's about advancing your career, uh, which almost everyone wants to do. So pay attention to what's happening. It's always my message.

Speaker B: Yeah. Knowledge is power. Always know about whether you agree with it or not or think it's going to affect you or not. It doesn't hurt to know about it. So know as much as you can.

Speaker A: So, quiet week. We'll wrap up here. Uh, hopefully next week we get some exciting stories, but this is a. This was a good week. Lowest unemployment, um, claim in 57 years before I was born. It's great to see. We'll end on that note.

Speaker B: It's a good note.

Speaker A: Awesome. Ah, well, have a great weekend. Thanks for listening.