A Job Market Sucker's Rally: Just tell people what they wanna hear! 😒

"The war for talent is over. Talent won, says PwC U.S. chairman Tim Ryan."

Uh... OK.

"Companies are moving back to mandates, anywhere from two days to five days in the office citing the need for connection, but Ryan said what is important is redefining what connection means in the workplace, and mandates no longer make sense for today’s workforce. " -CNBC

Have you ever heard the expression, "If 'ifs and buts' were candy and nuts we'd all have a wonderful Christmas" ? That's how I feel about this.

🔮 Prediction alert: if talent had actually won this talent war in the long-term, wouldn't the economy look quite a bit different? Would we see leaked memos about how the balance of power needs to go back to Corpo America? Would The Fed want to see unemployment going up? To use the phrase du jour: c'mon man. This feels like the calm before a sudden rabbit punch knocks you out.

Links I discuss in this episode:

https://www.investopedia.com/terms/s/sucker-rally.asp

https://www.cnbc.com/2022/10/26/the-war-for-talent-is-over-talent-won-says-pwc-us-chairman.html

https://www.vox.com/policy-and-politics/2022/10/6/23388247/layoffs-recession-labor-market

https://www.buzzsprout.com/1125110/11166348

https://www.bankrate.com/banking/federal-reserve/whats-next-for-great-resignation-in-a-recession/

https://finance.yahoo.com/news/80-employees-problematic-level-debt-172452658.html

https://survivingtomorrow.org/mortgages-are-the-biggest-ripoff-on-earth-61fe0c7795e3

Need more? Email me: https://causeyconsultingllc.com/contact-causey/

Transcript

0:15

Welcome to the Causey Consulting Podcast. You can find us online anytime at CauseyConsultingLLC.com. And now, here's your host, Sara Causey. Hello, hello. Thanks for tuning in. And today's episode, I want to talk about what I would call a job market suckers rally. As well as the tendency of the media to just tell you whatever it is they think you want to hear. Nothing to see here, people move along, everything's fine. People are doing great. The job market is still red hot, unemployment is still low. All things considered the layoffs are not so bad. Like we've got it all under control. You just stay there in your haze and your fog and don't worry about it. Hmm, really? Does that seem accurate or trustworthy to you? I feel that it's important to call these people out. If they make predictions that don't come true if they talk out of both sides of their mouth. If they throw things out with no evidence whatsoever. Let's talk about it. Let's call a thing a thing. If you're not familiar with the term soccer rally, Investopedia has a great working definition for us to use. I'll read now, soccer rally is a slang term referring to the temporary rise in an asset like a stock or the market as a whole, which continues just long enough to attract investment by naive or unsuspecting buyers. The buyers are the suckers since they're likely to lose money on the trade when the price heads lower again. This phenomenon is also known as a dead cat bounce, a bull trap or a bear market rally. Sucker rallies frequently occur when the price of a stock noticeably rises despite the fact that the fundamental aspects of the stock have not changed. In most cases, these fundamentally unsupported price increases result in a large drop, usually continuing an overall downward trend. Sucker rallies frequently occur amidst bear markets, where small price increases attract a few buyers, but then the selling continues in large quantity. Sucker rallies are easy to identify in hindsight. Yet in the moment, they are harder to see. As prices fall more and more investors assume that the next rally will mean the end of the downtrend. Eventually, the downtrend will end in most cases, but identifying which rally turns into an uptrend and not a sucker rally is not always easy. And quote. I feel like even though they're mostly talking about stocks and the stock market, this has so much bearing on the job market as well. We're just going to tell you that unemployment is low, there's still 1.7 or two open legitimate jobs for everyone unemployed person. Places that are having to shut down are doing it because labor shortage, no one wants to work anymore. Everyone in Gen Z is lazy. Hmm. I mean, the same song and dance. It's like, I love how they say the stock noticeably rises, despite the fact that the fundamental aspects of that stock have not changed, like wake up. What do you really think is going on in the job market? Do you really think that all of these people are laying around in grandma's basement off their 2020 stimulus checks? Really? Okay, so this leads me to one of the articles I want to talk about over on CNBC on October 26. We found the talent war is over. Talent one says PwC us Chairman Tim Ryan. Oh, oh, oh really? I feel like bein in that scene and The Dark Knight Rises when he goes into the stock exchange and that like obnoxious yuppie is like there's no money here you know? I don't know what you're doing here there's no money here and he says it in this very like smug top down sort of way in vain is like Oh really? Then why are you people here? Exactly. Oh, really? The talent war is over and talent one. Right. In the key points we find PWC. US Chairman Tim Ryan says three day or five day mandates for workers to be in the office are out of touch with a permanent shift in the balance of power between labor and management dead countdowns. He says work has traditionally been designed to provide the illusion of choice, but now employee demands for real choice must be taken seriously. Bootstrap. bosses that don't understand this fundamental shift will Lose talent and ultimately lose market leadership suckers rally? Yeah. I don't think so. I have gone against the grain on this. And I'm willing to do that I'll be the lone voice out in the desert. I don't care. I'm just on here trying to tell you the truth as I see it opining for your entertainment. I just don't see this being reality. I don't, we have too many people living paycheck to paycheck. Inflation is crippling. I've talked on my Saturday broadcasts about seeing more and more neighborhoods showing obvious signs of economic distress, including neighborhoods that used to be pretty shishi and fall for the small town, somebody's lived there. And now there's just junk strewn about old rusty car parts in the yard plywood where Windows used to be. It's depressing. It looks a lot like neighborhoods looked in 2008 2009 when there were foreclosures everywhere. And because the banks, you know, the houses have gone back to the banks, there wasn't anyone around to 10, to the houses to mow the yard to take care of things. You could find that look of distress all over the place. It was very sad. I was there. And I remember it, it was a very sad thing. Here we go. You know the same song, but a different verse of it. I'm seeing the same types of things in more and more neighborhoods. I've also talked about driving by garage sales or yard sales that had no takers, when it would be sunny and 75. Under normal circumstances, you wouldn't have been able to squeeze another human being into that yard sale or into that garage sale. And it would just be somebody sitting there in a lawn chair looking pitiful, because nobody wanted to come and buy their stuff. But yet we're supposed to believe that everything's okay. Interesting. I'll read a little bit from this article for you now, in the headlines the war for talent is still taking place on two fronts, with a hot labor market, still tilted to job seekers even in a cooler economy. And companies testing the power that they have post pandemic to mandate a return to Office. On that second front though PWC. US Chairman Tim Ryan says the winner has already been declared. The war for talent is over talent one. Ryan said at the CNBC work summit on Wednesday, the PwC Chairman's view of this shift in the balance of power between management and labor is key coming from a firm with nearly 300,000 workers, over two thirds of whom are millennials. Interesting. I'm sure that that has something to do in my opinion with what he's putting out there and represent a departure from the work paradigm built during the Baby Boomer and Gen X generations. Well, at least we got to mention there. Hey, somebody did acknowledge the fact that generation X exists. Companies are moving back to mandates anywhere from two days to five days in the office citing the need for connection. But Ryan said what is important is redefining what connection means in the workplace and mandates no longer makes sense for today's workforce. Well, yes, I agree. The sentiment is not wrong. I don't think that mandating RTO has a damn thing to do with connection. And I don't think that mandates make sense for today's workforce. I agree with everything there. I just don't think it's going to bear out to be the likely scenario in most of corporate America. And I think we do people a massive disservice by putting out hot air and hopium in my opinion, I'll continue to read. We're seeing the best most innovative companies doing that Ryan said of a more flexible approach to work location PwC announced in October 2021, its employees have the choice to work from anywhere permanently. Ryan said it won't be an easy shift for many employers to accept because while the rhetoric of the American workplace has always focused on giving some choice to workers, the reality is that it's long been designed to take away choice, Ryan's said, citing examples, including the idea of a 40 hour workweek or Monday through Friday work week. Again, I don't disagree with what said their illusion of choice. But in so many ways in American society. Or if we want to zoom out and say western world society, there's an illusion of choice periodic to go back and revisit the episode I did about neuro marketing and the illusion of choice. This is not just about the workplace. Ultimately, what humans are telling us is that they want choice. If we're willing to redesign the way we do work, we can get the talent and get the work done and do it on our employees terms, which leads to better outcomes Ryan said it's a different way of thinking and a fundamental different skill that should drive better outcomes and a half Beyond more engaged workforce, he said it's important for companies to begin listening to their workers more. Because while in his view, talent has won the war over choice, the more to attract top talent is likely to only increase. The pandemic took 5 million people out of the workforce over 55. And we're seeing declining numbers of college enrollments across the country. Ryan said Why shouldn't wonder college is so freakin expensive. And what do these young people get out of it? You know, they go and get a degree that may or may not have any bearing whatsoever whatsoever what's what's so at all, on being able to find employment, and pay for these outrageous student loans? Why not. And that part's not a mystery to me. As far as people being out of the workforce, over 55, a lot of those people are going back. I'm seeing more and more people around town, when I go out to do the shopping, go to the feed store or go to run errands. I'm seeing more and more people who are elderly who have come back to work. I have a friend who's 81 that recently went back to work. And he said inflation was part of it. But he also got tired of staring at the boob tube and feeling like his brain was rotting. I've said many times I don't plan to ever retire, at least not in any conventional sense of the word. When we think of this notion of sitting out on the porch with your coffee and watching the sunrise and listening to the birds chirp, I'm like yeah, and then what? I'd rather be making money, I'd rather be keeping my mind sharp. If I don't have billable hours on the day that I croak I've done something wrong. And I hope that my family or whoever is left around that point in time bills the client for whatever it was. Let's get paid. That's how I look at it. But the point I'm making is I think that some of these people over 55, who took a look at the pandemic and all of the chaos and the turmoil and said screw it, we're out some of those people will go back into the workforce out of necessity. I do not know how someone on a fixed income is making it in this economy. I don't know how somebody on a fixed income makes it period. But I don't know really how they're making it during hyperinflation. It's mystifying to me. Many labor experts have cited the demographic challenges of the US labor pool in the decades ahead with baby boomer retirements accelerating and less Americans coming up through the education system to replace them in the labor force. Wonder if they'll decide that robots and AI need to do that. Stay tuned. Department of Labor Secretary Marty Walsh told CNBC work on Tuesday that there is a catastrophe coming for the economy and related to a depleted national workforce if the federal government fails to find a bipartisan fix for a broken immigration system. Okay. Okay. So I guess if we can't use robots and AI to do it, then we will exploit immigrants. Okay. All right. Got it. PwC is focused on what will be a persistent struggle for talent led it to implement a program to study how employees work and how to increase productivity, happier, more satisfied, people will do better work for their clients, if they're feeling better about themselves, Ryan said, we're changing and redesigning every single process within our organization to give people choice. This includes allowing, there's that word again, allowing employees to make choices on various elements of work from where they work, to how they work, the number of hours they work, and what benefits they receive in quote. Okay. So why do I feel in my opinion, that content like this is just part of a sucker rally or a dead cat bounce in the job market? Well, because in my opinion, is hot air and hopium it's someone being trotted out to say, hey, look, the war for talent is over and talent one, you're gonna get freedom of choice. You're gonna get to decide how you want to work. And when you want to work and all of that. And I'm like, yeah, if you freelance. If you own and operate your own business, if you set the rules of engagement and then demand adherence to those roles, you will but if you're a full time w two employee you living paycheck to paycheck, and if you lose your job, you are screwed, royally. How in the hell is that going to work for you? Corporate America has not been shy in saying they want you back. The mayors of these big cities have not been shy in saying they really want you back downtown. You need to cross pollinate, hang out with fellow humans. go downtown and shop in the shops and eat in the restaurants. It's time for you to come on back. Do you think that they're just going to let go of all that because somebody from PwC goes on CNBC and says the talent one I don't think so. over on bankrate.com published on October 20, we find a not so great resignation question mark. Workers who found a better paying role feel less job security as recession fears rise. The US job market felt like a party coming out of the pandemic for workers at least record quits and job openings coupled with the biggest labor shortage in almost a century gave employees the bargaining power to Job hop and advocate for higher pay and remote work. But volatile markets, souring sentiment, the highest borrowing costs in more than a decade and a slowing economy all risks coming to crash it risk coming to crashing, aren't we there? The question now, whether the workers who took advantage of the hot job market could head into a possible recession better off possible recession. And recent bank rate surveys suggest the ones who partook in the so called Great resignation of workers might be the ones feeling the most anxiety about their future employment status. More than half or 56% of those who found a new better paying job say they're worried about their job security, but 19% saying they're very worried. fears about facing a future bout of unemployment are twice as high as those who stayed put at their company and got a pay raise 28%. About two and five working Americans or 39% are worried about their job security, regardless of whether they switched companies according to bank rate survey. Again, we come back to that figure 39% are worried about job security. I don't, it's still difficult for me to put my mind around that. In my mind, it is not about being scared to death hypervigilant, Chicken Little The sky is falling. Even Suze Orman has said you need to pretend that you've been laid off and wargame out your strategy. Who are the people that are not worried? Are they in la la land? What are they doing? What are they watching? What are they paying attention to instead of like, you know, I don't know reality. I'll continue to read finding a better paying job or getting a pay bump. We're workers main options for limiting inflation's wrath on their wallet this year. The booming job market helped over six in 10 workers or 61% receive at least one of those over the past 12 months, up sharply from 44% and 2021 50% in 2019, and only 38% in 2018. According to a recent bank rate poll, data suggests that job switchers tend to see the biggest pay gains but bank rates poll highlights how it might be a double edged sword, drawing on fears of a last one hired first one fired situation for those who found a new job over the past year. If you listen to this podcast or you read my blog, all of that information ought to sound familiar to you. Sometimes the last hires are less qualified. They're more junior, they're younger, and they have less experience as Julia Pollack, Chief Economist at zip recruiter, an online employment marketplace, employees do often become more valuable the longer they stay at the company. And if you're going to cut someone you'd rather cut someone who hasn't accumulated all the firm's specific knowledge and quote, but I mean, were they telling people that during the FOMO and the Yolo of the great resignation? Just long pause there so you can chew on that for yourself. If you join the great resignation, should you be worried about your job security in a recession? It depends. Experts say companies often do let newer employees go first work face work force analytics firm resilio labs. Hope I say that right? I don't know. Found the average length of service for 17,000 laid off employees to be 1.2 years. And that's a pretty short tenure, half as long as the average tenure of all company employees according to a September analysis, yet every company finds different ways to cut costs and others might choose to slash by function rather than by seniority. Pollack says marketing budgets, for example, are often the first to go as our contract workers. The advertising and related services sector are often a first resort for cuts last 4700 jobs in September according to the Department of Labor, some companies do take the last one first out approach, but it's definitely not the rule across the economy. Pollack says to me this is pretty freakin similar to the what I would call hot air and hopium that we got on vox.com the pandemic could have changed how employers think about layoffs, even as recession fears grow and job openings drop lay lofts remain low for now. They try to convince us that these employers and corporate America have really learned their lesson this time. They're going to hang on to good employees, and they're going to hoard labor. Oh, sure, of course they will. I wouldn't bet my life on it. Meanwhile, the economist that is quoted in this bankrate.com article, put out a tweet on June the third of this year saying headline, tech layoffs reality, all time record, low layoffs, and rising tech job openings, headline recession risk reality 545,000 jobs added on average every month for 12 months, three times the pre COVID average. Yeah, so that's why I say take a look. Verify, determine, use good critical thinking. If someone is making predictions, do their predictions come true. It's kind of a simple yes or no thing. Also, on what I would consider to be a highly related note, on go banking rates.com Or on Yahoo Finance wherever you prefer to go. There's an article published titled 80% of employees have a problematic level of debt. According to a new survey. This was published on October 28. We read, with inflation running wild and many salaries not keeping up. Many Americans are living paycheck to paycheck and racking up debt in the process. According to new surveys. As MarketWatch reported this week, living paycheck to paycheck has become the norm for many workers. Citing data from a new lending tree survey that polled 4000 people, they found that 63% of middle class and 49% of high income earners are waiting on the 15th and the 30th every month to receive their money, which is an increase from 57 and 38%, respectively, reported last year. In general 65% of all employees in America in 2022, at least are living paycheck to paycheck. Compounding the issue. The Employee Benefit Research Institute also recently released findings from a new 2022 workplace wellness survey. The data indicated that 80% of American workers have a problematic level of debt, including student loans, medical bills and credit card balances. To conduct this study, EBRI pulled 1518 full time and part time workers aged 21 to 64 across the spectrum of race, age, gender and income level. The survey also over sampled workers that identify as LGBTQ in order to include a good cross section of respondents. The survey found that 60% of employees are concerned about their financial well being of their household up from 49% in 2021, and 50, and 48% are concerned about their emotional and physical well being respectively. In addition, a large majority of workers believe that employers should have a responsibility to ensure wellbeing in those three areas, including 66% that say their companies should help with financial security, yet less than half would rate their current place of business as making an effort in these areas. Only 44% of those polled are satisfied with the benefits package they currently receive at work, including health insurance and retirement contributions and quote, stick with me a little while here. Over on medium.com Jared a Brock has a great article titled mortgages are the biggest ripoff on Earth most people have zero clue how they actually work. Under the heading, here's how modern mortgages actually work we find back in the day the middle class worked good paying union jobs borrowed a reasonable amount of money, typically less than three times annual single earner income from local bankers who risked their own real capital. Now the middle class no longer exists. Instead, you and a partner try your best to find a job or two or three or a gig job or start a business or a side hustle, work hard and save within a vampire system that is preying on your labor devaluing your money and trying to automate plus eliminate your job in real time. You then pay tax on that money income tax sales tax, property tax excise tax, gift tax, tolls, tariffs, capital gains inheritance tax 97 different types of taxes, while the elites who control the government pay as little as point one 0%. And their corporations pay zero by offshoring your stolen tax money, giving them a huge advantage over your company at all times. If you're one of America's 115 million renters, you then fork over a massive portion of that after tax income to one of the nation's 23 million parasitic landlords, passive speculators who contribute zero real value while fleeing a profit off the backs of productive workers. Simply because they monopolized property, you then mad Simply overpay for everything required to live a decent quality of life. The reason you're overpaying for everything is that as a customer, you're also paying the groceries rent the Baker's mortgage, the restaurants, equipment lease, the interest on the delivery guys car payment and the monopoly profits of the energy companies extractive shareholders. When you realize and you factor in all the rents, mortgages and monopoly profits that you're paying, you realize you're paying more than double for literally everything you buy, because the real economy has been taken over by the parasite anti economy. If you're one of the lucky few to earn enough to have anything left at the end of the month, you put it in a downpayment savings account and watch corporate engineered inflation destroy 10% of its value each year. All the while the real estate markets continue to rise. Even if you're doing great and saving one to 3000 per month, you're still falling behind. Last year in Canada, the average house price was going up by $16,000 per month. And it only cost that much because you're bidding against home destroying B and B, Airbnb hosts. Jeff Bezos is evil new startup trillion dollar multinational hedge funds, and everyone else who treats houses as investments instead of homes. Alternatively, house prices might be falling because interest rates are soaring. Either way, you can't afford the monthly mortgage payment because your rent trapped, you can't save enough for a down payment because you're stuck paying your landlord's mortgage. But somehow you finally save enough much devalued hard money for the tiniest of down payments on a house that costs 10 to 30 times your household annual income compared to two to 3% single earner income 50 years ago. And quote, yeah, exactly. So I want to bring it back around again to where I started a sucker rally. I don't believe the hot air and hopium I don't I'm sorry. If somebody tells me that the bulk of corporate America won't demand RTO they will be respectful of an employee's right to choose. They've really learned their lesson, they're not going to lay people off. They're going to try to hoard that labor. They feel like it was just too dang hard to find good talent during the Great resignation. And so they have really learned a permanent lesson from that. They're gonna do what they need to do to take care of the little guy, you're gonna be fine. You don't need to be thinking about any of this. The labor market is still red hot, there are still 1.7 legit open jobs for every one unemployed person. You're gonna be all right. I don't believe any of that. I don't. I can't tell you what to do. All I can say is that Speaking for myself, and my personal opinion, I don't believe any of that hot air hopium. Not a bit of it. Do I think more layoffs are on the horizon? Yes, I do. Do I think that corporate America has learned some permanent lesson from the great resignation. And they're going to hoard labor? No, I think that there will always be certain skill sets that are more niche and more in demand than others. And those people may not suffer as much during a recession. That's true. Do I think it's true for everyone? Or even for most people? No. No, I don't. I think when you have a workforce 80% of which are saying that they're in a problematic level of debt. Then you go back and you look at Gallup state of the workplace report, and how many people said they were miserable. If we go back to that state of the global workplace report that was published in August of this year, that was not so long ago, only 21% of employees said that they felt engaged at work, and only 33% of employees said they were thriving in their overall well being. Okay, but only this man. If the worker count was over and talent had won. Why would those numbers be so low? Seriously. Instead, what we have are more and more people living paycheck to paycheck, more people being squeezed out of the middle class. Inflation running rampant every time you go to the store, it's more expensive than it was the time before. People who want to buy who want to upgrade and want to change their living situation or being priced out either by greedy sellers who think that their doodoo poop house is worth a fortune. And or at this point, the ever climbing interest rates, making it more and more difficult. But yet, someone is going to sit here with a straight face and try to tell me that more layoffs are not on the horizon. Corporate America has really learned its lesson work from home is here to stay in a lot of cases. They're not going to demand are to you're going to have a lot of freedom of choice. You're going to be able to work from anywhere forever. And that the the talent one that war is over and the talent won. Give me a break. Give me a break. If that's not a sucker rally a dead cat bounce a bunch of hot air and hopium I don't know what is. Thanks for tuning in. If you enjoyed this episode, please take a quick second to subscribe to this podcast and share it with your friends. We'll see you next time.