The Blubber

Per BI:

"Among Vanguard's lowest earners—those making less than $55,000—the hiring rate remains strong at 1.5%, still above pre-pandemic levels. However, for those earning over $96,000, the picture is bleak. Hiring has plummeted to a mere 0.5%, less than half of its peak in mid-2022. Excluding the early pandemic dip, this is the lowest rate since 2014. If you're earning a six-figure salary, it's a tough time to be job hunting.

Why are companies hiring so few white-collar workers right now? Several reasons come to mind. It could be that fewer people in corporate jobs are quitting, resulting in fewer openings. It might be that the struggling industries—tech and finance—employ many high-earning professionals. Or it might be that CEOs are following through on their threats to cut corporate bloat, what Mark Zuckerberg calls "managers managing managers, managing managers, managing managers, managing the people who are doing the work."

But there could be a bigger, more concerning reason for the downturn in white-collar hiring. Companies might be anticipating tough times and trimming their budgets accordingly. "If you need to pull back on costs," says Fiona Greig, the global head of investor research and policy at Vanguard, "cutting back on expensive workers will reduce costs more than cutting back on lower-income workers." In other words, the higher your salary, the less desirable you are to employers in tight budget times.

Some might argue that a slowdown in white-collar hiring doesn't matter much in the current economy, even for white-collar workers. Vanguard's data show that professionals looking for a job are facing challenges, but not many people need a new job right now. The unemployment rate for college graduates is 2.1%, and the national layoff rate is below pre-pandemic levels. When most professionals already have jobs and are keeping them, maybe it's okay that companies aren't hiring.

However, this argument overlooks a key factor: What if the job you have is one you hate? I have friends who are unhappy in their current jobs but can't quit because no one is hiring. Some have called this mix of lower hiring and less quitting "the Big Stay," suggesting a post-Great Resignation equilibrium. But my colleague Emily Stewart has a better name for it: the "trapped in place" economy. Professionals feel this acutely. Recently, they enjoyed a "take this job and shove it" confidence, knowing they could easily find a new job. Even if they weren't planning to leave, the strong job market gave them a sense of freedom—they didn't have to tolerate a bad boss, heavy workload, or return-to-office mandates.

This, I believe, explains the "vibecession"—the sensation of being in a recession even when metrics say otherwise. We're experiencing a slowdown in white-collar hiring, and white-collar professionals (my angsty friends and I) shape the public discourse about the economy. "People feel that things are moving in the wrong direction," says Guy Berger, director of economic research at the Burning Glass Institute, which analyzes the labor market."