Article reprinted in part from WalletHub
The U.S. has reduced unemployment from record highs during the COVID-19 pandemic to near record lows. Now, however, high inflation and the looming threat of a recession could cause unemployment claims to spike once more.
To help guide Americans who have lost their jobs or are worried about losing them during a potential recession, WalletHub turned to a panel of experts [including Rutgers Law School Vice Dean Stacy Hawkins] to provide some additional insight.
Do you think the hiring dynamic is currently tilted in the employees’ favor?
Hiring is almost always tilted in the employer’s favor in that there are always more people looking for jobs than there are jobs available. Even in a “tight” labor market like the one we are experiencing now, unemployment is not zero, it is just lower (3.5% in December) than normal (around 5%). That being said, what we do increasingly have is a mismatch between available jobs and available workers. That has created some excess hiring demand that has inured mostly to the benefit of skilled workers. What has really changed recently in the job market is people’s willingness to forego payroll jobs in favor of alternative sources of income. The largest of these alternatives seems to be readily available work in the gig economy. What really seems to be driving up wages and other benefits, like flexible work arrangements, is people’s willingness and ability to engage in gig work (and use other sources of income, like pandemic relief funds) rather than accept a payroll job on undesirable terms. It was this financial safety net of sorts, along with widespread worker disaffection, that fueled the Great Resignation during the height of the COVID pandemic and that is currently fueling the newest phenomenon – Rage Applying. People are still changing jobs and/or holding out for better pay and greater flexibility. And it seems the strategy is paying off for workers. Overall wages are rising, but they are rising faster for those workers changing jobs.