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Morning Brief: Companies rush to fill labor demand amid COVID

Yahoo Finance's Myles Udland breaks down why more employers are getting rid of degree and job skill requirements amid the pandemic.

Video Transcript

- We turn to the Morning Brief, and the continuing insight and details and color that we are getting on the job market right now. Most recently yesterday when we spoke to the head of ZipRecruiter who basically said like, you know, you want a job? You got a job. Is kind of what it sounds like here that, you know, that really we are seeing. He didn't use the word desperation, but perhaps I would use the word desperation on the part of some employers to get bodies in the door, Miles.

- Yeah, I sort of thought of this as you know those signs that say, you know, no shirt, no shoes, no service. This is like the opposite of that, right? You know, no degree, no experience, yes, you can be hired. We talked to ZipRecruiter CEO, Ian Siegel, on this program yesterday. And we continued our theme of exploring what the logjams really are in the labor market right now, and how employers are trying to overcome that. Let's take a quick listen to what Siegel told us.

IAN SIEGEL: The number of jobs that require either a college degree or five-plus years experience have fallen in half. The number of jobs that say, no experience required, explicitly, stated in a job description has doubled. Employers are raising wages, they're offering signing bonuses, they're offering flexible schedules, and they're still, in many cases, struggling to attract talent. If there is a secret weapon to attract the right job seekers to your job, no one seems to have cracked the code on it yet. It is a really interesting dichotomy that is playing out in the job market right now.

- And this of course, comes as we're just a few weeks out now from the expiration of all pandemic unemployment assistance, that PUA program, the federal program. Some states of course, have discontinued it, but all states that have been participating will be out of that program in September as the federal government winds that program down. We've heard for a long time from small business advocates and others that this would be perhaps that elixir that Siegel is talking about. The thing that gets everyone who is on the sidelines of the labor market right now back into the labor market.

But when we hear what Siegel said, and I went back to a piece I wrote about a month ago using some data from Indeed, and they looked at the number of job listings that had mentioned things like bonuses or had mentioned explicitly that they were offering incentives to employees, that data was on the rise on Indeed's platform. ZipRecruiter seeing something similar on its platform. You have the JOLTS data which ZipRecruiter mentioned in its own shareholder letter showing 10.1 million jobs are open. As we see here, we've got a 44% increase on the JOLTS aside relative to pre-COVID trends.

And you know, in Siegel's view, no matter which way you cut it, look at ZipRecruiter, look at CareerBuilder, look at Indeed, LinkedIn, whatever it is. There's about 40% more jobs available today than there were pre-pandemic. And I think, guys, this theme on the labor market side continues to me to be a lot about the muscle memory of corporate leadership groups. And this goes from the general manager level at the local ice cream shop all the way up to the CEO of a big multinational that has hundreds of thousands, maybe even, in the case of Walmart, millions of employees.

The muscle memory coming out of crisis is telling these folks, there's tons of people who want a job, you can pay bottom dollar because everyone is desperate to come in and find somewhere to work. That is what happened after the financial crisis. Everyone knows the memes, PhDs at Starbucks, all this other nonsense about over-educated workers having to settle because there was a glut of labor supply. We are in the exact opposite position today.

Not only is there a glut of demand because the economy has come back faster than expected, but now we have Fed officials, including Neel Kashkari talking about retirements. another thing we've written about in the Morning Brief as a potential source of folks coming out of the labor market. And you also have workers who have been paid $600 a week in some cases for over a year or seen their family members, themselves, their colleagues, get sick at the workplace and reexamine what they want to do with their lives, and you know, the prior situation. The prior pay, prior arrangements, prior flexibility, that's just not going to cut it.

And how this squares, I don't think anyone really knows. And you can even hear from someone in the labor market, in the job market business, they are befuddled as sort of how this all sorts itself out. And I think it's just a really interesting, perhaps the defining dynamic of the economy as we head into 2022.

- You know, Miles, I did get the sense from listening to Siegel and reading your newsletter this morning, we could be really on the cusp of getting some very, very strong jobs reports for August and September.

- I mean, maybe, right? We saw a good one in July, 943,000 non-farm payrolls added back to the economy. You have some Fed official saying, yeah, one or two more of those then we're talking about tapering. But look, there's 5.7 million fewer people employed in the US today than there were in February of 2020. And I think how we get from here to there, you know, it was in theory going to be a smooth path. You know, GDP has been a V-shaped recovery. Retail sales, V-shaped recovery. The labor market not quite so much. And how that goes, you know, how we get labor force participation. And I don't know, this a little bit off here, but that's, you know, prime age participation is in the 80s. And how we start to talk about getting more folks back in the labor market is certainly a conversation to be had.

- Yeah. And everybody keeps saying September is going to be the time, but we'll have to see if is actually what happens when kids go back to school, et cetera. But I think that's going to have to be borne out.