The Jobs Market is Collapsing

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Episode Transcript

Speaker 1 (00:00):
Unless you already have a new job locked down and
lined up, it's probably not the best idea to quit
your job in twenty twenty four because the jobs market
is not exactly what they're telling you it is now.
The first clue we have of this is at the
same time we have announcements of layoffs happening, while we

(00:22):
have reports saying that job's growth is happening like crazy.
Amazon's Twitch is cutting hundreds of employees that amount to
thirty five percent of its staff. Great American Media is
going through layoffs. Duo Lingo, the language learning app, is
laying off ten percent of its contract workers. Luber Freight
is slashing jobs, black Rock is cutting three percent of

(00:46):
its global workforce, The NFL is cutting employees, and companies
like Nike, Intel, and City Group are all planning layoffs
for twenty twenty four. So how do we have that
happening at the same time as we see these blowout
jobs report numbers? Case in point, US payrolls increased by

(01:06):
two hundred and sixteen thousand just in December, which beat expectations.
As a result, the US unemployment rate is showing to
be at record loads. In fact, we have to go
all the way back to the late sixties before we
see the unemployment rate at a lower point than where
we're at today. So how can all of these things
be true at the same time. Well, on one hand,

(01:29):
they're not actually all true at the same time, and
on the other hand, it's just a matter of how
you measure. So I'm going to explain exactly where these
numbers come from, exactly how this works. And just in
case there's anybody out there watching this video who actually
works for one of these useless government bureaucracies don't work,
I'm going to explain how this works in simple, smooth

(01:50):
brain terms. Got to be inclusive, right. I got my
very first job when I turned sixteen, and I worked
at Harkins Theaters. I was making seven dollars and ten
cents per hour, and I distinctly remember number one my
first day working. It was an eight hour shift and
by the end of it, I felt like I had
just gone through a torture session. Sweeping popcorn up off

(02:12):
of carpet with brooms that are probably ten cents apiece
don't work very well. Picking up trash from people who
just leave all of their trash in the movie theater
and by the end of it, my feet hurt from
standing all day. And to this day, it is actually
the worst job I ever had in my life. And
my first paycheck was thirty two dollars gross and my
net was around sixteen or seventeen dollars. And I looked

(02:34):
at the pastub and saw that they took something out
called Medicare social security, and so I went to them.
I said, hey, you made a mistake. I'm not getting
something called social Security or Medicare, Like why are you
charging me for this? And they just laughed there like
welcome to taxes. So fast forward, I don't know. A
year later something like that, and I got my second job,
which I actually got at the exact same time because

(02:55):
they were both part time jobs. My second job was
a landscape installation job. So he and a couple other
guys on the crew, we'd go into a house, we'd
go into a backyard and we'd install a new landscape.
So we'd put in gravel, we'd dig the holes, plant trees,
put in the irrigation, everything. And to this day, that
was actually the hardest job I ever had, but I
didn't care. I was very happy because that job paid

(03:16):
nine dollars an hour, which at the time felt like
I was rich. And I was able to do both
of these jobs at the same time because they were
a part time for a couple of months before I
headed off to college. So let me ask you a
question about this situation. What was my personal impact on
the job's market. Well, the number one way that you
see people address this question is simply by going to
the businesses themselves and asking them how many employees they had.

(03:39):
So if somebody had gone to Harkins Theaters at the
point at which they hired me, then Harkins Theaters would
have said, yes, we added one employee, and so the
government bureaucrat would have written down on his little form
that we added one job. And then he would have
gone down the street to the landscape installation company and
he said, hey, what's your situation with jobs? And my
boss would have said, hey, we added one employee. So

(04:00):
the government bureaucrat would have marked on his check sheet
that we added yet another job. So from the bureaucrat's perspective,
two jobs would have been added to the economy and
it would have looked like great economic strength. This way
of counting jobs is what's known as the Establishment Survey,
and it's where we get numbers like this showing December
payrolls increasing by two hundred and sixteen thousand. But if

(04:22):
you have any critical thinking skills, you're probably looking at
that and thinking, well, wait, that actually doesn't count as
two jobs. That's one person working two part time jobs,
and you'd be absolutely correct. And this is where the
second way of measuring jobs comes in, which is actually
asking people how many jobs they have. The Establishment Survey
obviously showed an increase in jobs for December, while the

(04:44):
Household Survey, which asks individuals how many jobs they hold,
showed a decline of six hundred eighty three thousand jobs,
which is the largest loss since April of twenty twenty,
when the government forced people to stop working. As that
wasn't bad enough on its own. If somebody is working
three jobs, that's not even counted in the household survey.

(05:07):
It maxes out at two jobs per person. Now, if
we follow this train of thought a little bit farther,
we can see that the next thing this highlights is
that people are losing full time jobs left and right,
and they're replacing them with multiple part time jobs. In fact,
full time employment fell in December by the most since
again April of twenty twenty, which again was when the

(05:28):
government forced people to stop working and also incentivize them
to by sending them stimulus checks. So if we take
out this April of twenty twenty low, the fall in
full time employment that happened in December of twenty twenty
three is almost unprecedented. Here we can see a big
divergence between the number of people who are working full
time is dropping versus the number of people working part

(05:49):
time is rising. This means that the number of people
who are holding multiple jobs is higher than it's been
in years. As if all of that wasn't bad enough,
Even if we want to take it at face value
and just look at the Establishment survey which claims that
December saw an increase in two hundred and sixteen thousand jobs,

(06:10):
let's take a look at how accurate this survey has
been over the course of the last year. In twenty
twenty three, ten of the twelve months jobs numbers were
revised downward. If we take a look at the cumulative
effect of all of the downward revisions that happened during
the year of twenty twenty three. It means that one quarter,
twenty five percent of all the jobs that were claimed

(06:32):
to have been created during twenty twenty three were not
actually there. They were revised away one or two months
after the report came out, But that still leaves seventy
five percent of those job gains that happened. So we
have to ask where were those jobs, because that actually
matters too. It turns out that sixty percent of the
jobs that were created in twenty twenty three were either

(06:54):
government or healthcare, which in the United States is government.
We can see industries like transper rotation and warehousing and
information all lost jobs, and the massive dominating net increase
in jobs came strictly from healthcare and from government. Now,
for anybody out there who is thinking, well, those jobs
are still necessary and it's still a net gain, even

(07:15):
if it's not ideal, it's still a net gain that
we had those jobs. I'm going to ask you to
put on your thinking cap for a minute while we
go to our imaginary hypothetical island economy to see how
this plays out in reality. Imagine there are ten people
who are deserted on an island, and it just so
happens that one person is very good at fishing. Another
person is very good at building huts. Another person's good
at climbing trees and so they can climb up and

(07:36):
go get coconuts. Another person is good at finding and
filtering stream water for drinking water. You can see how
this goes. There are ten people, and pretty much every
single one of them has some natural talents or skills
that they're able to use to provide some value to
themselves and to others. The person who fishes doesn't want
just fish, and so they're going to trade some of
those fish for some coconuts. They're going to trade some
of those fish for some huts, like whise. The people

(07:57):
who build huts are able to get coconuts and fish
for building the huts. It's a great little econ. But
there is one person who doesn't have any skills that
they can produce something that other people want. I'm going
to call this person the bureaucrat. So the bureaucrat sits
down in a rock and he thinks, hey, the person
who collects the drinking water wants some coconuts because they

(08:18):
have no coconuts. But the person who collects the coconuts
doesn't want any water because they get all of their
drinking water they want from their own coconuts. So the
self appointed bureaucrat looks around and thinks, my value that
I'm going to provide is to force people to share
in the way that I see fit. So I'm going
to tell the person who collects the coconuts that they
must share one coconut with the person who collects the water. Now,

(08:38):
you might be sitting there thinking, well, this is still
a net gain, because there's somebody that's forcing equality and
forcing some sharing to happen. And certainly when looking at
it from the standpoint only of the person who collects
the water, yes, that person is better off because they
get the water and they get the coconuts. But we're
forgetting the fact that the self appointed bureaucrat is themselves
not producing anything of value. So not only are they

(09:02):
forcing a distribution that wouldn't happen absent the bureaucrat, but
the rest of the island must produce an excess in
order to support the bureaucrat. And so while there is
some good, some gain happening for some players like the bureaucrat,
and some good happening for the person who collects the water.
The entire island is much worse off than they would
be without the bureaucrat there in the first place, because

(09:24):
there would be much more abundance, more goods available for
them to share with themselves if they didn't have to
support the bureaucrat. So I'm not claiming that every government
job added in every healthcare job added is only bad.
What I am claiming is the economy is worse off
as a result of those jobs existing than they would
be if those jobs simply didn't exist, because every single

(09:45):
one of those jobs that exists must be funded by
taking away from the productive capacity of somebody else who's
producing in the economy in order to pay for those
who are not. Now, let's bring this full circle to
talk about your job and your employment situation. Number one,
if you do not quit your job, if you don't already
have something lined up, most job postings that are out
today are ghost jobs. Ghost jobs are openings that are

(10:08):
posted by companies that will never be filled. Sometimes the
companies want to make themselves look good. Sometimes it's hiring
managers that need to fill quotas on applications and interviews.
Ghost jobs are a thing and so if you look
out at all the job postings and think, hey, it's
an interviewers, it's an employee's market. I'm going to quit
my job and just hope that I land something soon,

(10:28):
that's a bad idea. Number Two. If you do have
another job lined up, you should almost certainly take it.
Studies have shown time and time again that the more
you switch jobs, the more you will earn compared to
people who stick with the same job. This is because
it's much easier to negotiate for higher salaries and pay
increases when switching to a new company than it is

(10:48):
to just get a raise in your current role or
in a promotion. And number three, no matter what the
economy is like, there are always opportunities to make more money,
increase your income, and multiply your wealth. This is one
of the things that I teach Inheriting Financial University how
to build a six figure side hustle while you have
a full time job. This gives you an escape plan
if you want it. Certainly, if you'd rather, you can

(11:09):
just enjoy the extra income of a full time job
and a six figure side hustle, or you can use
it to escape the rat race fire your nine to five,
go all in on your business and live life on
your own terms. Spend more time with your family. Actually
control how much income you make, not how it artificially
capped by your employer. I teach the exact playbook that
I used to go from zero dollars in income, zero

(11:31):
social media presence, no flywheel, nothing existing, to growing my
business to over six figures a month. That sounds like
something that you'd like to take action on this year.
Join Herese Financial University link is in the description below.
As always, thank you so much watching have a great day.