Every month when the US jobs report comes out, they’re talking about an increase in jobs or a great jobs report. But when I read the news, I keep hearing about these companies cutting 5%, 8%, etc. of their workforce.
Most of them seem to be “white collar” jobs, and I understand why they’re doing it, but the reports feel disconnected from reality. I personally know people that have been laid off. I’m not trying to e political, I’m just trying to understand what I’m missing? Where is the disconnect?
In: Economics
There are several factors here. One immediate one is the fact that a lot of the companies you’re reading about are big tech, and their severance packages mean that people who are laid off take a long time (many months) to end up in the officially unemployed counting statistics, if they ever end up there at all. So at a minimum there’s a lag on the denominator you’re referencing.
Another, more impactful element is the fact that big tech dominates the conversation out of proportion to the number of people they employ. Amazon laying off 5% of its engineers is objectively a lot of people, but it’s a drop in the ocean compared to the number of people working in the service industry (which is adding jobs like crazy). So the economy as a whole is in fact adding jobs, even including the high profile layoffs.
Finally, remember that the economy is a big place, and just because it’s doing well doesn’t mean you’re doing well, or even all of the people you know. Gains and losses are not evenly distributed, especially in the short term.
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