What the Heck is Happening in The Job Market?

Welcome to The Shift, a weekly newsletter where I provide thought-provoking ideas to help you think differently about your career and money.

Going Insane

Trying to understand the job market can make you go insane.

Trust me, I know.

A slew of new data on the health of the job market came out last week and while I sit on the verge of insanity, I do have a key takeaway: this sh*t doesn’t add up.

Companies are hiring, yet the number of people working looks like it has peaked¹ .

That’s because people are quitting their jobs. And some of them are leaving the workforce completely¹ .

What may be surprising is that layoffs aren’t really impacting the picture.

The media talks a lot about how less people are quitting, which is true vs. 2022, but there is still a large number of people quitting their jobs.

With low unemployment rates, and excess job openings available, it’s easy to assume that the people quitting are finding new jobs. But are they?

Or are they taking on part-time work instead of full-time work? Are they becoming self-employed? Or are they taking time out of the workforce to reskill/upskill to switch industries?

It’s a mix of all three, and more.

The Rise of Part Time Work

One thing that struck me, is that extent to which employment is being fueled by part-time work.
 
Not to get too into the weeds, but in May, full-time employment fell by -625k jobs, while part-time work increased by 286k jobs¹ . Pretty stark difference there.

If you’re a visual person, check out the chart below showing this. You see there are more positive orange bars (representing part-time jobs) than blue bars (representing full-time jobs) on the right – or in the last 12 months.

This rise in popularity of part-time work is usually considered a warning sign of a slowdown in economic growth.
 
But this time just might be different…

This trend actually started in 2018/2019. The same time small business formation started to rise.

Then there’s the resemblance to the 90s. Back then part-time work increased sharply, as did self-employment and having multiple jobs¹ . It was a period of transition. As the internet and technology was being intertwined into the way we work.  

Similarly, today some industries have fewer full-time opportunities. At the same time, there is more optionality in the way we can work - in our current companies, new companies, or on our own.

It’s never been easier to start your own company, side hustle, or creator business.
 
The way we work is changing.
 
That may mean a slowdown while we recalibrate, but it could be hugely beneficial on the other side.

Let’s make The Shift!

P.S. I’m linking my TEDx Talk again - please watch, comment, and share to help me spread the word. 🙏

Lindsey

Sources:

1. Bureau of Labor Statistics.