Why is the Job Market So Bad Right Now?

All right, you guys, I've got some data for you about unemployment rates, some severance information for people who've been laid off today. We're talking about why the unemployment rate is so low right now, but it feels really crazy, like a crazy job market. So you guys know I got Rico with me, and I'm just gonna tell you some stats, and I want to get your gut reaction, like, I'm going to ask you some questions. So are you ready for the first one?

Let's hear them.

All right, so I'm going to tell you the unemployment rate now. I'm going to tell you what it was in 2008, which should be like a marker for like, holy crap. Like, that was rough times. And I'm also going to tell you what the unemployment rate was in 2019 before COVID All right, the unemployment rate right now in the US is 3.8%.

BS.

Would you think it was higher or lower in 2008?

I think it was probably a little bit higher.

It was double. It was 7.3% in 2008. So major, major tough times. It feels right now like those tough times, though. Wouldn't you agree?

I would agree. I would say that we're actually at the same rate as we were. They just changed the numbers around.

And that's interesting that you say that because when you hear CEOs on the news saying things like, the job market's fine right now, the economy's great, the consumer is doing well, which I know you just talked about in your latest YouTube video, that's BS because everybody who's a consumer right now or employed or unemployed knows that we're not doing great. Things are rough right now for everybody.

But when you hear not for everybody. Not for everybody. For the super wealthy, it is not rough because prices, they are price resilient. And when people with hundreds of millions and millions of dollars of net worth buy something, it doesn't even matter because their bank account doesn't even reflect the purchases. So. So, no, not everybody. I would say 90%. It affects the other 10%. It doesn't affect.

Okay, well, I don't think those 10% of the super wealthy are in corporate jobs unless they're CEOs. So let's ignore them for now because they are outliers and they're skewing the data. So what do you think the unemployment rate would be? You think it'd be higher than right now or lower than right now in 2019 right before COVID Lower. It's a tiny bit higher. Right now it's a little bit lower. So in 2019, it was 4%. Right now it's 3.8%, which is very interesting. So, yeah, very interesting. All right, so another way that people. In addition to the unemployment rate, another finger you can put on the pulse of the labor force or the workforce and how healthy it is. Unemployment rate and the labor force participation rate. So for anybody who's never heard of that, I'm going to define that for you. So labor force participation rate is just the Percentage of people 16 years or older who are either employed right now or actively looking for work. So in other words, it's the amount of people who can work, who are working. Guess. I just want you to take a wild guess. What do you think the percentage of people who can work are working right now?

45.

You think it's that low? No, it's 62%. I think it would be like 80%.

We'Re having. So I read something the other day that said that this generation, this millennial generation, is going to inherit millions of dollars of their boomer generations, and they do actually not need to work anymore because they've inherited so much wealth.

Mom, dad, if you're listening, please leave me millions. I don't want to work.

Yeah, I don't know if that's going to happen.

Crickets. By the way, if you guys are interested in who raised me, the crazy people who raised me, Rico and I are going to be going to visit them, like, in 12 hours for a couple days. So, no, make sure to follow me and Rico on Instagram, because we'll be showing you a little bit of the ins and outs of my mother and father, and they are quite an interesting bunch.

Be super cool to have your dad on the podcast.

I think so, too. So if you guys want my dad on a pod, let me know what you want us to talk with him about. I would say we'd have my mom on there, too, but she'd probably just play her guitar the whole time and it'd be more like a Spotify track.

Make money for it.

All right, so I have another statistic for you. So, so far, I find these numbers kind of shocking, because I would think the numbers would be better because of how executives are talking about how great things are right now. Maybe that's political. Maybe we don't want to say the R word in an election year, you know, recession. But so, okay, according to CNBC and the Wall Street Journal, and I think you know the answer to this, Rico. So I'm Going to have you guess how many fewer job openings are available right now compared to the previous quarter?

300,000?

Yep, 300,000. You actually told me that this morning. So if anybody listening to this is job searching, if anybody watching this on YouTube is job searching, and it's taking you a lot longer than, you know, the typical 90 days to get a job, it could be because there are a lot less jobs available. So that's interesting. I think I read a couple months ago that according to the Bureau of Labor Statistics, bls, which is an awesome resource if you're ever curious about anything workforce related, BLS said that there were 1.4 job openings for every job seeker. Now, that's interesting because that would mean that if I am looking for a job, there are multiple jobs. There are more jobs available to me than I'm looking for, basically. But it doesn't feel that way, right?

No, it doesn't. And I'm looking at. So I know that Jamie Dimon was on a podcast talking about how great the economy is.

Tell us, who's Jamie Dimon?

That's the CEO of J.P. morgan. And I've read articles that said that he had, that he created, I think, like, oh, my gosh, he. He added 10,000 jobs in 2022 and blah, blah, blah, blah. And then he says, going so great, but this year he laid off 500 people. So he's like trying to do quiet layoffs. And so the, you know, it's like, everybody's trying to do it. It's like a trend. It's like. And it says here, you know, that the company has added 17 jobs, 17,000 jobs in 2022 and 2021. And I don't know if that was an acquisition, you know, because they bought this other bank that was failing. But here in, you know, it, they, they always like doing so great. And then layoffs here, doing great layoffs. And it's like, hmm.

So you just said the magic word, acquisition. I do not think jobs are created during acquisitions. I think jobs are destroyed during acquisitions. The company that, you know, I don't work for anymore, as of last year, they got acquired and they've been letting people go ever since. And it's because when a bigger company swallows up a little company, the bigger company already has an HR department. They already have project managers, they already have a lab manager. They just need the tribal knowledge from the smaller company, the subject matter experts, and then they can let them go. Usually that takes three to six months. Like, hey, what do you know about this product that we just acquired. All right, you're good. We're letting you go. So speaking of being let go, speaking of creating jobs and eliminating jobs and layoffs, I have a question for you. And you and I have been talking about this all morning, but to the listeners and the watchers, I have a question for you. If somebody is laid off and they get severance, meaning they get a certain number of months where they get their paycheck because the company's like, we don't want to leave you hanging. You're going to sign your rights away to sue us for laying you off, but we're going to give you a big check that you can live off of while you look for jobs. That's what severance is. Do people who get laid off and get severance, do they qualify for unemployment? So in my experience, when I have gotten laid off before and filed for unemployment and I received severance, there's a little box that the unemployment thing asks, and it says, did you receive severance? How much? How many months is that supposed to last you? And I was denied unemployment. And that means that I am not included in the unemployment rate. So my question for you is, and this is to you, Rico, and this is to everybody watching, listening, do you think the unemployment rate number is skewed right now because a lot of people are not being counted in those numbers?

I would say yes. And I would go even further and actually. And say that you fall out of the. After 26 week, you're not eligible for unemployment anymore. So really, in Nevada, I looked it up earlier because we had this conversation, so this might be not accurate because I'm not a subject matter expert on it, so don't rip me apart, but somewhere it said 26 weeks, and after that, you're basically done. And I don't know after that, if you're like, oh, we've given you the money, you're done. Bye. But according to. It's got a circle back to the interview from JP Morgan CEO. He said, we still have Covid money. So. So we should.

That's right. I saw that in the interview. He was like, people are still living off of the. What do they call it? The.

The COVID The COVID fund stimulus money.

Sorry, does anybody still have any of the stimulus money they got?

And as I was. I. I think we. You and I didn't even get any. So, no, I had not gotten any Covid money.

No. We got the first round. We got like 600 bucks, and then we never saw another penny that was from California.

That was the state of California or something that, that they did. And yeah, that should have kids. That's it. And I don't know how long. 600. How long Jamie Dimon can live off of $600. Or his rich people, maybe they have some, some unique way how they can multiply it, but I cannot, like a money printing machine, probably some crazy thing that they're going to 10x or 100x to make that $600 into a 6 million or something and then live off of that. I don't have those capabilities. So. Yeah, I don't, I don't think so. I, I think they're gonna. You're. As soon as the last day hits, you're done. You're not in the unemployment thing anymore. You do something else.

Yeah, yeah. So some of the data I read this morning when I was doing research for this podcast episode is that if you are given, let's say, six months of unemployment, sorry, if you're laid off and given, for example, six months of severance, you are not eligible for unemployment, for filing for unemployment or receiving unemployment benefits until six months after you've been laid off. So your money, the severance, is supposed to last you this long. You are eligible for being included in the unemployment party, the fun employment party, after those six months. So I think my theory and my opinion is that there might be a lag in unemployment data. And if a lot of people are getting laid off today, maybe they get six months of severance and the unemployment numbers are going to reflect them six months. But they might get a job within six months. They probably would, so might not. Yeah, real interesting. I definitely don't think things are fine right now. I have always felt that in election years, like presidential election years, that things that don't seem fine, everybody says they're fine. And I feel like I'm kind of being gaslit by the government right now and by CEOs that are like, the consumer's doing great. Just eat cereal. The CEO of Kellogg said, just eat cereal for dinner. You and I went to buy a box of Tazo hibiscus tea the other day at the store. How much did it cost?

$6.

6 or $7?

No, I think it was like 10. Almost something. But see, that's a problem that I, that I talked about the other day, that the CEOs of Kellogg's are so out of touch with reality, it's not even funny. And they almost need to get slapped on side of the head with a paddle and being like, just because that's your perception of the world and who you surround yourself with. That you don't know how the normal common folks live doesn't mean that that's reality for 90% of the people.

And I think one of the reasons why they think that people are doing great right now is because they're looking at numbers like unemployment rate and workforce participation rate. And we didn't talk about how the workforce participation rate has changed over the last few decades, but in 2008 it was also 62%, 62% of the eligible for work population was working. And it was the same in 2019. So if you, if a CEO was like, I know I'm out of touch with reality, but somebody give me some data so I can have a feel for if people are doing good or not. And somebody's like, well, well, the unemployment rate's really low. Oh, people must be doing good. They must be working. The labor force participation rate is the same as it's always been since the fifth 50s. Okay, people must be doing great. I think they're not looking at the right data, but I also think we're not quantifying and we're not measuring the things that actually matter.

You know, that's the thing about perception and actuality. So if pers. You know, sometimes they, they tell you that so you don't get freaked out. Sometimes they'll tell you on purpose that, oh, we're doing fine, so you're not like, oh my gosh, let me run in the other direction and vote for some random other person. Because I think we're in on a one way railroad track towards a cliff. And then they're like, no, no, no, we need to go the other direction. So they purposely don't tell you that. And after the election's over, then they're like, okay, yeah, we are in a recession, we'll deal with it. And then you have four years to kind of, or at least two years till then the midterms to kind of figure it out. But it's so interesting to see how everything is going. And you and I know everybody, everybody that we know is having a harder time now than they did a year or two ago.

Everybody I know right now is either unemployed, receiving unemployment, living off severance, it, has just been laid off, or their partner has just been laid off, is struggling to find a job, is in between jobs. I mean, I honestly couldn't tell you one person in my friend group who's thriving right now. Maybe that meant that, maybe that means our friends aren't that rich, not in that wealthy group, that 10%.

And that's what I'm getting at. And that's what I'm getting at. It's interesting to see how. And you and I are still doing okay, but there's people that are having three jobs right now trying to make end meet. And these are also the people that were not that smart with their financial moves and went out and got new cars. Now they're getting repoed, then they can't go to work. And so it creates this whole domino effect down the road where people are just really hurt. And I think it's super unfair for these people now that you can't get another job. And you need to.

So you also can't do cash out refis right now. You can't refinance a home right now because a lot of people aren't going to qualify for that bigger mortgage. You can get a HELOC for anybody who doesn't know what we're talking about. Like, sometimes when you own a home and you have equity in your home, you can like live off of it in tough times. But right now, I think the federal interest rates, what, like 6%?

Some so, no, the federal. Some like, I think like four or five. Because they just had a meeting today and they didn't increase it or decrease it.

Okay.

And it is just sad to see these companies, and it's interesting because McDonald's, I showed you this today, that McDonald's made less profit than they did last quarter. And so interesting to see. Or they made less money this, this quarter than they did last quarter. So less people ate McDonald's. And so I'm looking at it like something's just not adding up.

I know. And you and I are. I'm a big McDonald's fan. I'm not gonna even lie and say we don't go to McDonald's like once a week. I love McDonald's.

Not once a week, though. We don't go once.

Maybe not once a week. Maybe like twice a month. But it gets, it's gotten so expensive. It's 15 bucks per person to eat at McDonald's right now. And I think people who are in like, like the bottom tier of income earners are probably eating at McDonald's. Places like McDonald's or probably shopping at the Dollar Tree. McDonald's has gotten so expensive, people can't afford it anymore. And the Dollar Tree things don't cost a dollar anymore. How much do they cost now?

125.

$1.25. If you guys saw our story on Instagram the other day. We were at the dollar store buying stuff for our Airbnb, and everything's $1.25 now. So I could go on and on about this forever, but let's wrap this up. I feel like I'm getting upset.

Yeah, it is.

I know. Anybody listening? Anybody watching? If you're struggling right now, you are not alone. We are also working our tails off to make ends meet. Everybody through this, everybody is. You are not alone. If you ever need to talk, send me a DM. My DMs are always open to you. And I hope you have a good day, a good week. Keep your head up, keep your chin up. Things will get better. That I know. All right, well, that's it for this episode. Thanks, you guys, for watching. If you're on YouTube, thanks for listening. If you are in your car driving, make sure to keep your eyes on the road and wherever you're going. I hope you. Hope you love it. We'll catch you guys later.