The White-Collar Job Squeeze

Authored by Jeffrey Tucker via The Epoch Times,

The other day, I was tooling around at the grocery store and, in line to check out, I noticed a clothes hamper in the shopping cart in front of me. I thought it was pretty nice. I said so to the person pushing the cart.

Yes, I know it is awkward to strike up such conversations but I’m glad I did. I quickly found that the shopper was not buying for himself but for a customer of Instacart, an online ordering service. He was working and shopping as a customer himself.

Intrigued, I asked other questions. He has a university degree, recently earned, another full-time job, and just does this to put money in the bank and pay the rent. Casually digging around further, it turns out that this person is deeply grateful for this second job because otherwise he would be bankrupt and have to move home across the country to live with his parents.

This whole scene struck me as odd, so the next time, I began to wonder about other shoppers and tried the same line of inquiry. As it turns out, several more people there were working for various online shopping companies, Instacart among others. They all had similar stories of hustling as much as possible in the evening hours to pay the bills.

Truly, I had no idea that many people in our grocery stores today are not there buying for their families but for other businesses. They are gig workers. It’s their second and third jobs. I feel silly not to have known this but I’m not among those who have used such services. But plenty of people do. And that results in jobs for which people are deeply grateful because they have to pay their bills.

My friends, this is not normal. It has a Weimar vibe: wild economic activity and opportunity amidst a scramble to maintain one’s standard of living. It’s a hamster wheel with just enough payoff to keep it turning. Young people should not be doing this, particularly not those with high-level college training and expectations of the good life just right around the corner.

A story in the Wall Street Journal has gripped me. It’s about a kid who attended a very fancy school, Loyola University in Chicago. A degree there costs about $280,000 plus four years of lost job experience. You pay it because the credential is great and opens up a world of opportunities. The young person the story chronicled obtained a degree in English literature and imagined a future of working for a major publisher, perhaps advising the next F. Scott Fitzgerald.

Upon graduation, he started sending out resumes. Ten. Then a hundred. Then several hundred. Then a thousand. Months went by. He heard nothing from any of the companies. Despairing, he started writing to local newspapers. Nothing. Then he tried writing and marketing his material. Nothing. After nearly a year and facing utter bankruptcy, he finally landed a job: a part-time cook but mostly dishwasher at a local diner. For that he is grateful.

Indeed. Please understand: this person came from a wealthy family and went to the highest-end school. He got excellent grades throughout school. He graduated with honors. He had a network. But when actually going out there and trying to find gainful employment, he had come up with absolutely nothing. It took him a long time but he finally realized that there is nothing wrong with dishwashing. Any job is a respectable job. And all kudos to him for being willing to tell a reporter his story.

It’s hardly unique. It’s the experience of a whole generation. These days, sending out thousands of applications and hearing nothing is considered normal. A person of my generation cannot imagine this but it is true.

The WSJ says:

“The white-collar labor market is entering a more uncertain phase after cooling for more than a year. Job insecurity is climbing and fewer professionals feel emboldened to change their employment. The lack of turnover is stalling hiring even more as companies rethink their talent needs after pandemic-hiring sprees.”

That much is very obvious.

The hiring boom was always fragile and sketchy.

Now it is ending as the financial squeeze from inflation eats away at corporate profits and payrolls shrink across the entire white-collar world. A whole generation has been caught off guard. They followed all the rules. They went into massive debt. They did what they were supposed to do, on the promise that all will work out in the end.

Sadly, nothing is working out after all. Not even the restaurant and hospitality sector is offering gainful employment. This is a huge change from just one year ago, when at least young people had the option of serving tables. That is no longer true. Those who have such jobs are deeply fortunate. And they know it.

It’s all the more frustrating for people under 30 to realize that the system that has robbed them of opportunity and income—buying a home is out of the question but not even owning a car is possible—is being run by people with massive retirement accounts who are over the age of 70.

This is the old exploiting the young, not intentionally but in effect.

The post-pandemic and actual pandemic economy always had the feeling of unreality about it. It was funded by fake money and debt plus subsidies. Most people had the confidence that all would work out because it always had. But this supposition runs headlong into the reality of accounting. Nothing really added up.

Inflation is simply not going away and it has eaten into living standards. It is far higher than the government is reporting. Everyone knows this now. Quite simply: the government numbers exclude interest, shrinkflation, added fees, and a realistic accounting of housing prices and insurance. It doesn’t matter how many Nobel Laureates say that all is well. American citizens know it is not.

For a while, people believed that the magic of technological innovation would once again save us. Artificial intelligence stocks soared and the companies that seized on this new shiny object seemed to be the darlings of Wall Street. But in the last week, that too has changed as major institutional investors are asking old-fashioned questions about price-earnings (P/E) ratios and underlying values. Wall Street says this is merely “rotation.” Rotation is to stocks as “transitory” is to inflation.

The post-lockdown jobs boom was always artificial, a product of miscounting and misreporting. But whatever strength appeared to be there is now melting away, leaving dislocation and stagnation, even in sectors like hospitality that were reliable only 10 months ago.

(Data: Federal Reserve Economic Data (FRED), St. Louis Fed; Chart: Jeffrey A. Tucker)

Hard times are coming and most people get this. It’s going to be difficult for the new presidential administration. There is no magic solution, as much as we might want one. All budgets, including government budgets, must be cut severely. We have no choice but austerity. It is going to come whether we want it or not.

The flight to value will continue. The new fashion will be for real jobs, real balance sheets, real assets, and real lives. It’s about time. Nothing in the political theater of our times will change this. These are extremely uncertain days, ripe for all sorts of possibilities. Let us all hope that we will choose freedom and sound money as the only real alternative to stagnation and collapse.