America’s layoff situation isn’t adding up.
Despite what seems to be endless waves of layoffs over the past few months, national employment data has shown that the economy isn’t as doomed as it seems. The unemployment rate sat at 3.6% in February, slightly up from January but still near the lowest it’s been in five decades. And layoff rates are actually lower than they were in the years proceeding the COVID-19 pandemic, Nick Bunker, economic research director for North America at the Indeed Hiring Lab, recently told Coins2Day.
It’s all painted a much brighter picture than the one that the many layoff posts infiltrating LinkedIn are painting. But data just released by the government reveals that the number of unemployed Americans could be much higher than it seems.
Only about one-quarter of eligible recipients even applied for unemployment insurance benefits in 2022, according to a new government report released Wednesday. That means the current unemployment claims may not also be under-counting the problem.
The majority of those who did apply for benefits, 55%, did not apply because they did not think they were eligible, while another 17% did not because said they expected to start working soon, according to the government’s report. One in ten said there were too many barriers in the process.
What could explain the discrepancy? It’s possible that though the layoffs were announced, some weren’t actually scheduled to take place for weeks or months. Additionally, generous severance packages may be keeping workers from applying. So, we may not actually know the extent of layoffs for some time to come. Even economists are confused.
Despite low unemployment, labor force participation was about 0.9 percentage points lower throughout 2022 compared to the 12 months pre-COVID-19 pandemic. That’s 2.4 million fewer workers, a recent report found.
In fact, there have been more job openings than unemployed people since May 2021, according to the Labor Department. It’s helping those who got laid off to find a job more quickly. The majority of laid-off tech workers find work within three months of searching, according to a November ZipRecruiter survey of 2,550 U.S. Residents. And 37% of laid-off tech workers got a new job in less than one month.
“Job seekers are still finding jobs remarkably quickly—historically quickly—and that’s especially interesting given that they actually have more of a financial cushion to go longer,” Julia Pollak, ZipRecruiter’s chief economist, told Coins2Day earlier this month.
And so the labor force remains a contradiction.