Despite jobs gains, expert forecasts declining demand for labor
SAN FRANCISCO (KPIX) -- A labor market expert warned Friday that a solid California jobs report for May doesn't tell the full story and changing economic factors this spring will likely make for a more challenging hiring environment later this year.
"Get (people) into the labor market now because it's only going to get much tighter, much more difficult time to find a job. Now is still a relatively good time by historic measures," said Michael Bernick, an employment attorney and former director of the state's Employment Development Department. "It's only going to get more difficult going forward so get in now."
While the state saw jobs growth in May, the number was below the monthly average for the past year, according to Bernick. He also says that, while the unemployment rate dropped last month, the annual inflation rate is at its highest point since 1981 and the federal interest rate is at its post-1994 peak. These two developments, along with a declining stock market, have him worried about a changing job market, especially since he believes the last six months represent California's best employment climate in decades.
Amanda Nguyen is co-founder of Pastel, a delivery service that lets customers order food items from popular local vendors and pick them up at locations closer to their home outside of San Francisco. It's a business she launched to support her other company, Butter&, which bakes specialty cakes.
"Last year we posted a job opening and we got zero people applying," she said. "We would lose all of the candidates because there was no way a small startup that was a year old could compete with the compensation. We couldn't hire for three solid months and then we had to change our strategy."
While conditions in 2021 were difficult for employers, Nguyen noticed an improvement in the number of applications and the interest of potential employees in recent months.
San Francisco-based payroll and benefits platform Gusto reports that hiring is down compared to a year ago for small- and medium-size businesses nationwide. Even tech industry hiring is down with worker layoffs running at a higher rate than other industries, according to Gusto.
Nguyen says there appears to be more of a focus on sustainability now for employers and employees.
"It's going to be an interesting time and I think, as an employer, it's going to be really important that the efficiency of the business is solid," she said, suggesting there's a growing desire by workers "to work at a place that really values you and treats you well and will continue to do so longterm."
