According to the latest Labor Department data, around seven million Americans are unemployed.
These are people who are out of a job, looking for work, and more than likely falling behind in their finances.
When policymakers and economists want to understand who’s hit hardest by unemployment, they’ll look at statistics like long term unemployment. These are folks who have been out of a job for six months or longer.
Currently, there are more than 1.6 million people who are long-term unemployed– and according to reporting by the Wall Street Journal, white-collar workers are being hit especially hard at the moment.
Matt Grossman is a reporter with the Wall Street Journal who joined Texas Standard to discuss. Listen to the interview above or read the transcript below.
This transcript has been edited lightly for clarity:
Texas Standard: In your reporting, you write that 1.6 million Americans are currently long-term unemployed. Can you put that figure into perspective for us?
Matt Grossman: Sure. So that is up quite a bit from a couple of years ago when the economy was reopening after the pandemic and a lot of companies were eager to hire.
So for a lot of people across a lot of different industries, it was pretty easy to find good opportunities for work pretty quickly. I think toward the end of 2022, that number was right around 2 million. So up in the, you know, 1.6 million range. Now that’s up by at least 50% from a couple of years ago.
Well, right now, many white-collar workers are having trouble finding work. What kind of jobs are we talking about?
So if you think about some of the companies that were really expanding very quickly after the pandemic, it’s a lot of those sectors that are feeling the pain now. There is that big expansion in the types of companies that really promoted the sort of digital lifestyle that we all shifted to during the pandemic: Media companies, technology companies, engineering companies that were developing the software needed for that whole work-from-home shift.
A lot of those companies have kind of gone through their growth phase now. And so if you work in one of those industries that deals with coding or, computer technology engineering, it could be a lot harder for you to find work than it was a couple of years ago.
Well, at the start of the 2020s, average annual wage growth was at about 6%. And according to recent numbers, that’s fallen to about 4%. Do we know why?
Yeah, I think that just reflects the overall dynamic. This kind of ebbs and flows with the rest of the economy. It’s always natural for there to be cycles in this type of thing, but when wage growth is high, it’s hugely a sign that companies are competing with each other to find workers, to keep the workers that they have.
When it’s relatively hard to find the right people to hire, then you have to sort of offer them bigger raises and more pay increases. And now that it’s the time that hiring is kind of slowed down across the board, there’s less pressure on managers to offer those raises or to try to entice workers from other companies to come on board with big salary increases.
Well, it’s also worth noting that despite these unemployment figures, the economy is still growing and some sectors are still growing. Where are we seeing job growth right now?
So the people who are doing pretty well right now are working in those jobs that are just really hard to replace — the kinds of industries where you really need people in large scale doing the work.
So if you think about hotels or restaurants where you need people keeping the rooms up or waiting on tables, or in the health care sector where you really can’t get by with fewer nurses or doctors or health aides, people who work in those industries are actually finding that things have really not slowed down for them very much at all.
It’s in other sectors where you could imagine that a boss might feel a bit of a budget crunch and they might ask the workers that they have to do more with less and try to scale up the amount of work that each individual person on the staff is doing – that companies are trying to get away with fewer people.
Of course, in the industries where you just can’t do that — like as I said, in restaurants or hotels or in construction — that tends to be where the economy is still working pretty well for those workers.
Well, you’ve clearly spent a lot of time looking at employment data. Are there any hints about where the economy is headed in the next few years?
Yeah, there’s a lot of open questions right now. I think the economists that I talked to and the investors that I talked to have a lot of open questions about what this year is going to look like.
The incoming Trump administration has a lot of levers to pull on economic issues, whether it’s on immigration or on tariffs or on regulation. And then we also have a big year for the Federal Reserve, which, of course, sets interest rate policy and still has some work to do controlling inflation, even as they also try to make sure that unemployment doesn’t get out of hand.
Because there are really so many moving parts this year, it’s very hard to say where things are going to go.
