Home Blockchain News Major corporations believe that workers have ultimately surrendered control of the job market

Major corporations believe that workers have ultimately surrendered control of the job market

by Michael Stark

The Era of Worker Control Over Wage Growth and Job Opportunities is Coming to an End

The Pre-pandemic Job Market
The signs are increasing in the nationwide job market that the post-pandemic era of worker control over wage growth and job opportunities is coming to an end. Despite powerful union strikes from Detroit to Hollywood, the labor movement has faced decades of weakening. However, the tide is turning, and the power of workers has proven to be significant.

Business Challenges in Finding Qualified Workers
All year long, and back into 2022, the challenge of finding qualified workers for open positions has been among the biggest for companies, with wage growth among the most-watched inflationary forces at the Fed and within C-suites. According to CNBC, 60% of chief financial officers say it has become easier to find and hire qualified workers for open positions compared to a year ago. This marks a 25-percentage point increase from a quarter ago, a rare change in this quarterly survey series.

Shift in the Balance of Power
The Q3 CNBC CFO Council survey showed a shift in the balance of power between workers and employers from within the C-suite, with CFOs saying conditions in the labor market were “about the same.” However, it appears that the balance has now tipped, as last quarter, there were only 15% of CFOs saying that it remained harder than a year ago to find workers.

Hard Data from the Labor Market
Significant hard data and sentiment indicators from the labor market show that the Federal Reserve’s interest rate hikes are cooling things down, from job growth to wage growth. The latest nonfarm payroll report revealed a resilient economy still adding jobs, but at a slower pace than expected. Unemployment has ticked up, wage growth continues to decline, and the “quits rate” has leveled off from its pandemic surge.

Economy and Market Indicators
CFOs are more optimistic now, predicting that the Dow Jones Industrial Average will reach 40,000. At the same time, they are less concerned about inflation as it is at a record low. Despite recent earnings reports and comments from large corporations, concerns about consumer demand are rising, with CFOs citing it as their biggest external risk. Recession is still the more common view, with 50% of CFOs expecting a recession next year.

Inflation is expected to continue to struggle to return to the Fed’s 2% target, with CFOs increasingly giving the Fed high marks for its inflation fight. They are not expecting rate cuts to start until September 2024, reflecting a more hawkish view than the market. Overall, the signs are pointing to the end of the worker’s control over wage growth and job opportunities, and the beginning of a new era in the job market.

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