As Jobless Claims Rise & Job Openings Fall, Hybrid Work May be a Stabilizing Factor

Credit: intelligentnetware

Many businesses are feeling the crunch of inflation, which has led to numerous layoffs and hiring freezes. A report released by the United States Department of Labor shows that 235,000 applied for jobless benefits in the first week of July this year. This represents a six-month high and has raised the four-week average jobless benefit claims to 232,500. As the US economy slows down and prices go up, retrenched employees are in need of ways to earn. However, the labor market offers more discouraging news.

The US Bureau of Labor Statistics found that open jobs sank to 11.3 million entering June from 11.6 million at the end of April. Industries like professional and business services, durable goods manufacturing, and non-durable goods manufacturing accounted for the biggest cuts in job openings. On the other hand, the number of hirings in May remained at 6.5 million, which brings a glimmer of hope for job seekers.

The increase in the number of jobless claims originates from just a few states, foremost of which are New York, California, Georgia, and Michigan. Interestingly, the volume of claims in other states displayed little change. In fact, 29 states even reported a decline. This is why most sectors in the country are not alarmed by recent developments; not yet at least.

The country’s unemployment remains at 3.6% amid inflation and possibly an incoming recession. In addition, job gains amounting to 272,700 were reported by Refinitiv. However, US employers did announce 32,517 layoffs last month, which represents a 58.8% increase, year-over-year.

These developments follow the announcements of layoffs from large enterprises like Tesla, Twitter, Netflix, Coinbase, and GameStop. Besides sacking their workforce, many of these corporations have decried remote and hybrid work, forcing their staff to return to the office full-time. This appears to be part of the unemployment problem.

Hybrid Work Helps Curb Inflation and Unemployment

Many companies and their workforce are locked in a standoff regarding remote and hybrid work, which has led to employees either leaving or getting laid off from their jobs. A 2022 McKinsey report found that 87% of the country’s workforce would favorably consider offers from employers who offer flexible working conditions. Additionally, recent remote work and telecommuting statistics show that only 49% of employees asked to return to the office full-time comply with their employer’s demands.

A number of large enterprises claim that employee performance has been dipping ever since the remote and hybrid working models were adopted but the facts state otherwise. A study by the Federal Bank of St. Louis shows that the aggregate work hours of employees, who are mostly hybrid, increased by 4.6%, compared to what they were prior to COVID-19. Moreover, a survey by PwC reveals that companies who are against hybrid work appear to be in the minority. After all, 57% of surveyed businesses reported an increase in productivity in 2021.

Hybrid work was also discovered to be a tool against inflation. The proliferation of the working model across industries has resulted in downward pressure on wages, enabling the Federal Reserve to buck a wage-price spiral. Furthermore, hybrid employees get to limit their spending since they don’t travel to the office and its nearby establishments daily.

Of course, hybrid work alone will not curb inflation, and neither will it completely solve the unemployment problem. But the numbers imply that the country and its business realm are better off with it around. As such, it’s likely to remain a popular working model in the foreseeable future.