It seems every day there's a new headline about mass layoffs, and yet the U.S. Bureau of Labor Statistics published a mere 1% layoff rate for the month of August.
This month, Netflix was the latest in a series of companies announcing layoffs. Business Insider has reported Meta, Amazon, Walmart and Visa have all announced layoffs this year.
Illinois State University economics professor George Waters said it's unusual for layoff rates and hiring rates to both be low at the same time.
"Usually, they kind of go the opposite direction," Waters said. "Like in a recession, people stop hiring and start laying off. So that's the unusual thing right now, is that the labor market just seems sort of stagnant."
Waters called the national unemployment rate of 4.2% "pretty good." The unemployment rate measures the percentage of people who are jobless, looking for a job and available for work. A lower number means fewer job seekers and more people employed who want to be.
McLean County has the national average beat with an unemployment rate of only 3.4%.
Waters said McLean County's economy tends to be "more stable than most other parts of the state," and cited Illinois State University and State Farm as providing "a backbone to the economy."
To Waters, it seems like people are clinging to the jobs they have. Why? He credits big picture uncertainty in their lives. He said "people aren't sure what's going on" and cited "tariffs, gas prices, future elections, [and] wars" as contributing to the feeling that people just don't know what tomorrow may hold.
To the labor market, Waters said that means "everybody's just sort of staying where they are, and doing what they're doing, and waiting to see what happens."
This issue seems to be showing up more strongly for smaller businesses. The National Federation of Independent Business's September report states that "labor quality or availability" is the single most important problem for 26% of small business owners. This is a historically high level for this metric, according to the report. It also stated that 87% of small business owners who are hiring or trying to hire "reported few or no qualified applicants for the positions they were trying to fill."
Waters said this may go back to broad economic uncertainty, and laborers may perceive bigger companies as more secure choices. "When you go to work for a small business, you're worried about it going out of business," he said. "If you get a job at Chase, then Chase isn't going anywhere in all likelihood. So, there's a lot more security."
He added that the benefits may seem more secure at larger companies, too. Although he warns against painting big companies with too broad of a brush when it comes to compensation and benefits. "That's not a that's not a hard and fast rule. There's plenty of corporations that try to nickel and dime people here and there too."
Potential disruption from AI
Asked how artificial intelligence may change the labor market in the coming months, Waters said he looks to the dawn of the internet to predict impacts and patterns.
"It opens some doors for some people, but it replaced some people. So there's going to be a lot of jobs that disappear," Waters said.
He anticipated, for example, that with AI assistance, two highly qualified people will be able to do the "grunt programming jobs" of 20 to 30 employees.
"On the other hand, it opens up some opportunities," Waters said. "And that's the usual story with new technology."
The single biggest opportunity to improve the McLean County economy, including the labor market, according to Waters? Build housing.
"If a business is thinking about 'where do I open a new factory? Where do I build a new office building?' They're going to look at housing costs." While housing costs seem high around here, realistically they're probably lower compared to other big cities, he said.
