Quarterly Jobs and Wage Report [Quarter 2 2022]

September 8, 2022 Marsha Martens

a woman working in a factory with a hard hat

It’s been over two years since the start of the pandemic and the entire planet is still coming to terms with a new version of normal. Time is now measured in pre- or post-COVID references. And we’re all still trying to predict and understand the way it has impacted our way of life and work. 

Work has been especially impacted. The way we worked, managed, and recruited previously has pushed the reset button and is no longer applicable to today’s standards.

We’re now more than halfway through 2022 and the nation has endured some extreme statistics—some are hopeful, and others are alarming.

Here is a brief look at a few of them. 

Key job market statistics

  • Unemployment Rate Pre-COVID: 3.5% (Feb 2020)
  • Unemployment Rate Currently: 3.7% (August 2022)
  • Voluntary Resignations in 2021: 47 million
  • Voluntary Resignations from Jan to Jun 2022: 25.9 million
  • 2020 Inflation Rate: 1.4%
  • Current Inflation Rate: 8.5% (Aug 2022)
  • Remote Workers: 7.1% (Aug 2022)
  • Fed Prime Rate: 1.58% (Feb 2020)
  • Fed Prime Rate: 2.33% (Aug 2022)
  • June 2022 Net Jobs: 372,000 July 2022 Net Jobs: 528,000

Back to normal index

According to Moody’s Back-to-Normal Index, we are at 91.3% back to normal from where we were prior to the COVID-19 crisis. This index uses a mix of traditional economic data and real-time metrics being published by a host of private providers to capture trends both nationally and at the state level. The index is intended to go beyond the usual measures of employment and output to give a realistic sense of those businesses and how consumers are responding to the pandemic and its recovery efforts.

Recession - are we, or aren’t we?

Although we continue to resist what seems like the inevitable label that we are in a recession, it can certainly be argued that we are headed towards one based on these five warning signs.

Copper prices

Copper is often viewed as the bellwether for the global economy. Prices for the metal fell 35 percent this year and hit a 16-month low on July 15 at $3.22.  While prices have regained a fraction of that back in the first three weeks of August, Daniel Ghali, Director of Commodity Strategy at TD Securities, states that, “copper prices are just starting to account for the fact that global growth is slowing.

Purchasing Managers’ Index

The index released by S&P Global on August 4 found that US private sector output slowed sharply in June. Producers of non-essential goods are seeing a drop in orders as consumers struggle with rising prices. The Fed’s aggressive interest rate hikes are further adding to an already bleak mood.

Consumer sentiment

A University of Michigan survey released August 5, found that US consumer sentiment hit a new record low in June, the lowest recorded level since the university started collecting the data 70 years ago. The June index saw a 14.4 percent drop since May as consumers became increasingly alarmed about inflation. The percentage of consumers who blamed inflation for eroding their living standards, 47 percent according to the June index, is only one percentage point lower than the all-time high reached during the Great Recession.

Gas prices

In simple terms, there are two ways to bring down prices—increase supply or reduce demand. The former is costly and complicated. The latter happens when consumers start pulling back because prices have risen too much and individual budgets are strained. That's what appears to have happened this spring, as Americans watched gas prices soar above $5 a gallon and overall inflation top four-decade highs. Consumers may finally get some relief at the pump in the interim, but the bad news is that traders are betting on a recession.

Housing slump

Home prices and mortgage rates have spiked since the Fed’s rate hikes and a surge in bond yields which has left homeownership out of reach for many Americans.

The impact of inflation 

The annual inflation rate for the United States is 8.5 percent for the 12 months ended July 2022, after rising 9.1 percent previously, the most since November 1981, according to U.S. Labor Department data published in August.

More widespread increases in what American consumers paid in June for goods and services drove annual inflation to a new 40-year peak — actually, nearer to a 41-year high, according to U.S. government data.

Recipients of Social Security and SSI received a 5.9 percent cost-of-living increase effective December 30, 2021. The previous increase was in 2020 for 1.3 percent.
A typical pay raise in the US is between 3-5% and according to Zippia, you may have to switch jobs to get a better raise.

Overall, 2.5 percent of workers – about 4 million each month – switched jobs from January to March 2022. This share translates into an annual turnover of 30 percent of workers, nearly 50 million, if it is assumed that no workers change jobs more than once a year. It is higher than in 2021, when 2.3 percent of workers switched employers each month, on average.

The effects of inflation on women 

In the first 12 months of the pandemic, women accounted for 53 percent of U.S. labor force departures, and about 2.3 million women exited the workforce in 2020. From February 2020 to January 2022, male workers regained all jobs they had lost due to the public health crisis, according to an analysis by the National Women's Law Center of the latest U.S. Bureau of Labor Statistics report.

The NWLC estimates 397,000 women entered the labor force in May 2022, increasing the women’s participation rate to 58.3 percent, which is just one percentage point below the pre-pandemic level. It would take about four months of job growth at May’s rate to regain the jobs lost since the pandemic began, which there are still 656,000 fewer women working or actively seeking a new job compared to February 2020.

In a national survey conducted by Sophisticated Investor, found 54.7 percent of American workers have not had their salary or wage match the rate of inflation, but men are 33 percent more likely than women.

Recent reports suggest women feel the effects of inflation differently than men and are more likely to cut their spending as a result. A survey released by BMO Real Financial Progress Index, found that 47 percent of women adjust the way they shop for groceries, dine out less, and cancel subscriptions and memberships to keep up with inflation.

The U.S. consumer price index (CPI) reached a four-decade high of 9.1 percent this summer and prior data from the Economic Policy Institute and the Federal Reserve Bank of Atlanta found that real U.S. wage growth has lagged behind the CPI since the onset of the pandemic.

These survey results indicate that the majority of the U.S. workforce is having their effective income reduced by inflation year-over-year. Women may be affected more so than men because they are less likely to ask and receive a raise and may experience gender-based discrimination in the promotion process, he said.

During the annual World Economic Forum gathering this past July, it was noted that the cost-of-living crisis already effecting women the hardest is being made worse by the widening gender gap in the global labor force.

The forum estimates that it will now take 132 years for the world to reach gender parity. Saadia Zahidi, manager director at the forum, said women have been disproportionately affected by the cost-of-living crisis following labor market losses during the pandemic and insufficient care infrastructure—such as for the elderly or children.

The inflation reduction act

On August 7, 2022, Congress passed the Inflation Reduction Act. We’re summarized a few of the highlights from the 755-page document and the claims of what they will do.

While this bill has a lot of measures within it, the effects are not going to be felt immediately and it likely will be years before we are able to see any benefits.

The inflation reduction act

On August 7, 2022, Congress passed the Inflation Reduction Act. We’re summarized a few of the highlights from the 755-page document and the claims of what they will do. 

While this bill has a lot of measures within it, the effects are not going to be felt immediately and it likely will be years before we are able to see any benefits.

1. Lowering costs of prescription drugs

Inflation Reduction Act empowers Medicare to negotiate with drug companies but only for 10 drugs covered by Medicare in 2026, increasing to 20 in 2029.

2. Caps out-of-pocket prescription costs for older adults

Capped out-of-pocket costs for prescription drugs at $2,000 annually and beneficiaries with diabetes will pay no more than $35 per month out of pocket for insulin.

3. Prevents higher health care costs
Extends enhanced Affordable Care Act through 2025.

4. Reduce prescription drug price inflation
Prevents drug companies from hiking Medicare prices above the rate of inflation and requires them to rebate back the difference if they raise prices above inflation.

5. Cuts carbon pollution
2030 emissions are projected to be 40% below peak levels which puts the country’s climate goal of cutting pollution to half of peak levels by the end of the decade within reach. 

6. Lowers energy costs
This bill would help families switch to cheaper electricity for heating, cooking and vehicles. Total spending on oil is projected to decrease nearly 25% over the next decade.

7. Create american jobs
Builds clean energy manufacturing by investing in refurbishing old factories, requiring higher wages and mandating apprenticeship training for companies using clean energy tax credits. 

8. Investing in communities that are impacted most by environmental and health hazards
$60 billion in total to cut pollution and improve public health.

9.  Tax code enforcement
Lack of adequate enforcement, bill will help enforce the tax code more fairly

10. Helps build a fairer tax code
Addresses the problem of corporate tax avoidance with a 15 percent minimum tax for corporations that have at least $1 billion in profits annually.

11. Fights inflation and drives down the deficit
Decreases demand through fairer taxes, increases supply through investments in manufacturing and clean energy with costs lowered for energy, health care and prescription drugs.

How companies can adapt 

It will be up to companies and business leaders to lead the way ahead of these social and economic policies. The pandemic forced people to reexamine their personal and professional priorities. Business leaders need to find a way to allow a better balance between the two.

Because we are a consumer society, this enables our ability to put our money where our conscious is, and thanks to the internet, consumers and workers can see in real time what contributions a company makes to lawmakers, special interest groups, or campaign PACs. This information is arming hundreds of thousands of Americans to make informed decisions from where they want to spend their money to where they want to work, even if it means leaving their current employer.

As wage gains continue to trail behind inflation, there is a potential fear that it will only worsen unless employers keep pace in the market. Most of the workers who quit in 2021 stated low pay was the top reason they left. Add to that the push for social responsibility in corporations, workers may start leaving companies that they feel are not representing their personal beliefs and interests.  With all the changes going on, a return to pre-pandemic norms is not likely.

Want more staffing and industry trends? Check out our content library here. 

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