‘It will mostly be a white-collar recession’: Milken economist William Lee on how the next economic downturn will be different
“It will mostly be a white-collar recession. And the blue-collar recession won’t be in the places we’ve seen in the past. ,
It was William Lee, chief economist at the Milken Institute, a Santa Barbara, California-based think tank, speculating on the nature of America’s next recession, in an interview with Marketwatch.
Amid rising expectations among economists of a recession – usually defined as two consecutive quarters of negative growth – Lee said there is still demand for blue-collar workers in service and construction, which will help protect those workers in the face of a recession.
Even with a low unemployment rate of 3.6%, low-income workers are always vulnerable to any economic downturn, but add to comments He made it to Bloomberg Radio earlier this week, with Lee saying there may be exceptions to that rule this time around.
,‘Joe Six Pack, who used to be the man to lay off, may be less concerned if he has one of these jobs that are in high demand, such as Amazon warehouse worker, delivery man, man who is working Ghost Kitchen.’,
– William Lee, Chief Economist of the Milken Institute
“Joe Six Pack, who used to be the man to lay off, may be less concerned if he has one of these jobs that are in high demand, such as Amazon warehouse worker, delivery man, man who is working Ghost Kitchen,” said Lee.
The US created a whopping 372,000 new jobs in June, despite a widespread slowdown in hiring and growing fears of a recession. Economists surveyed by The Wall Street Journal estimated 250,000 new jobs. There was an increase in employment especially in manufacturing, wholesale, retail, transportation and warehousing. Labor Department figures have come out.
Lee warns young professionals entering the workforce If there is a sharp decline in the economy, the first installment of workers will be let go. “The entry level white collar guy has to watch out. It is surprising in this recession,” he said.
Meanwhile, the tech sector has announced a wave of job losses. Shopify is laying off about 1,000 jobs Or 10% of its workforce, the Wall Street Journal reported this week due to a slowdown in online shopping after the worst days of the pandemic.
Shopify SHOP spokesperson,
MarketWatch referred to a blog post by the company’s CEO and co-founder, Toby Lutke. he has written: “We bet that the channel mix – the portion of the dollar that travels through e-commerce rather than physical retail – will go on for five or 10 years permanently.” But that condition, he said, did not pay off.
Last month, Coinbase Coin,
Hiring freeze extended and canceled some accepted job offers citing current market conditions. (Coinbase declined to comment.)
Is slow recruitment and Meta Platforms, Inc. head of meta,
(formerly Facebook) and Alphabet’s Google GOOG,
Employees have been warned of tough times to come. (Microsoft, Alphabet and Meta were not immediately available for comment.)
,As the pandemic hits, many people have upgraded their skills. So waiters and warehouse workers have retrained themselves to be truck drivers and perhaps accountants, and they are looking for better jobs.,
— William Lee
Lee said low-skill white-collar workers, such as entry-level accountants, were more vulnerable as businesses upgraded their business models after the worst of the pandemic. Many of these entry-level roles have been replaced by apps and new technology; Alternatively, businesses may no longer need some low-wage white-collar workers, Lee said.
With inflation at a four-decade high and showing little sign of slowing, the US Federal Reserve on Wednesday announced a 0.75-percentage-point hike to raise its benchmark rate to 2.25 – 2.5%. This accelerated the pace of the Fed’s hardening at the fastest pace since the beginning of 1981.
The consumer price index, which measures how fast the prices of goods and services are rising, rose to a 41-year high of 9.1% in June from the previous year. Despite this, the salary has not increased. In June, wage growth increased by 6.7%, according to salary increment tracker From the Federal Reserve Bank of Atlanta.
Due to labor shortages in key industries, Lee said that from mid-2021 onwards, low-wage workers were receiving higher wage increases than before the pandemic.
“As the pandemic hits, many people have upgraded their skills. So waiters and warehouse workers have retrained themselves to be truck drivers and maybe accountants, and they are looking for better jobs,” he said.