Why Americans Feel Financially Distressed And Worried About Their Jobs While The Economy Looks Good
The stock market is hitting new record highs, the United States economy added 353,000 jobs in January and inflation is going down, and yet Americans are still feeling the squeeze.
Despite a strong labor market, there is widespread concern about job security and the looming threat of job losses. According to a recent survey by MyPerfectResume, nearly five in six workers are worried that they will lose their jobs in 2024.
Although there are positive overall indicators, the economic recovery may not be reaching everyone equally. Income inequality remains a significant issue, with wage growth lagging behind inflation for many, making it difficult to afford basic necessities.
Recent job growth has been concentrated in three main sectors: healthcare, government and leisure and hospitality. Two months into the new year, more than 34,000 workers have lost their jobs in the tech sector alone, according to Layoffs.fyi.
In a recent survey conducted by ResumeBuilder, 37% of business leaders revealed they have already begun to replace staff with artificial intelligence. Nearly half (44%) of the executive respondents stated they anticipate further jobs cuts in 2024 due to generative AI efficiency.
This year, a number of top companies have already enacted headcount reductions, while announcing plans to reallocate their investments into AI and automation. The redirection of funds and resources to this fast-emerging technology threatens job security for white-collar professionals. The Wall Street Journal predicts several industries will be impacted.
There is an understandable feeling of insecurity that is keeping workers in place. Last year’s wave of layoffs created a chilling effect with 6.1 million fewer Americans—a 12% decrease—quitting their jobs than in 2022, according to the United States Bureau of Labor Statistics.
In December, the U.S. quit rate plummeted to the lowest monthly level in three years, signaling a departure from the Great Resignation trend that took hold after the pandemic.
Financial Uncertainty
A recent report by the U.S. Department of Treasury stated that “despite the significant progress on inflation, Americans continue to feel the pain of higher prices.”
The nation’s accumulated debt shows an increased reliance on credit cards. CNBC reported Monday that the credit card debt of Americans is now up to $1.13 trillion, with the average consumer owing $6,360, both record highs. According to the report, cardholders are increasingly carrying over debt month to month, and more people are falling behind on their payments.
When it comes to credit card debt, data by the Federal Reserve of St. Louis shows that financial distress in the third quarter of 2023 skyrocketed to the same level as the 2008 Financial Crisis.
Due to financial challenges, resulting from the lack of employment opportunities and the high cost of living, young adults have become financially dependent upon their parents. In a new report from Pew Research Center, nearly 60% of parents said they were financially supporting their adult kids, ages 18 to 34.
According to the survey, 57% of young adults also live with their parents or in a parent’s home. The economic challenges posed by high housing costs, inflation and broader economic precariousness have made it difficult for many young adults to afford living independently.
In an August survey of 2,000 U.S. adults by the Harris Poll, around 66% of Americans believe younger adults are facing hardships previously unseen by earlier generations. Moreover, 65% of Gen-Zers and nearly three quarters of Millennials self-reported that they feel further behind financially than previous generations.
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