The jobs recovery in work-from-home cities is fizzling out: Morning Brief

Friday, June 26, 2020

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Working from home is great if you already have a job.

In recessions, lots of bad things happen to the labor market.

Unemployment rises sharply.

Wage gains level off.

And the number of open jobs plummets.

All of which leads to dimmer prospects for those both employed and unemployed.

After a sluggish recovery for the labor market during the early part of the 2010s, data showing the number of workers quitting jobs on the rise, the number of job openings at record highs, and wages rising at the fastest rate in almost a decade were all signs that dynamism had returned to the labor market.

And while we’re still in the early stages of appreciating just how disruptive the current shock is to the labor market, data from

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How a remote work boom will affect salaries, jobs, and where people live

For office workers who still have jobs during the coronavirus crisis, the Great WFH experiment of 2020 seems to be angling toward a success, albeit one with caveats.

Coronavirus won’t kill the office permanently. Eventually, when risks of gathering ebb to a trickle, some people, longing to wear something other than sweatpants, will be happy to work alongside their coworkers, resuming water cooler discussions and the occasional happy hour. 

But after being home on Zoom, Hangouts, Meet, FaceTime, Skype, and Slack, workers and companies alike are second-guessing the need to return. 

Already, companies like Twitter (TWTR) and Square (SQ), both founded and run by Jack Dorsey, have implemented a permanent work-from-home option. Facebook (FB) founder and CEO Mark Zuckerberg said that in the next decade, 50% of the company’s workforce might be remote, and that it would “localize” salaries to wherever its employees choose to be on Jan. 1

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A ‘wave’ of layoffs is coming for $100,000/year white-collar jobs

Billionaire bond investor Jeffrey Gundlach, the CEO of $135 billion DoubleLine Capital, sees the potential for a “wave of more higher-end unemployment’ hitting white-collar workers making more than $100,000 per year as employers increasingly question the value these employees bring.

In 11 weeks, more than 42 million Americans filed for unemployment insurance as the COVID-19 pandemic wrecked the economy. The bulk of these job losses hit lower-income households the hardest.

“A lot of times it’s not the earthquake, it’s the fire,” Gundlach said on a webcast for the DoubleLine Total Return Bond Fund (DBLTX), later adding that he could “easily see layoffs in various industries” affecting higher earners.

Gundlach, who runs the Los Angeles-based bond investment firm, explained that one of the outcomes of remote work is it reveals who produces and who doesn’t.

“What people may have learned for white-collar services jobs, in particular, during the work-from-home lockdown situation,

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May jobs report surprise ‘isn’t solace’ to unemployed workers

Enhanced unemployment benefits are set to expire this summer, even as millions of Americans remain unemployed due to the coronavirus pandemic. Now lawmakers are trying to figure out what to do next. 

As part of the CARES Act, lawmakers added an extra $600 per week to unemployment benefits, but that extra boost is currently scheduled to expire on July 31. 

“What I’m afraid of is that August 1 will come and we will have millions of Americans who just simply won’t have any pathway whatsoever,” said Sen. Bob Menendez (D-NJ). “You don’t wait until then to figure it out.”

Menendez spoke to Yahoo Finance ahead of Secretary of Labor Eugene Scalia’s testimony on Capitol Hill, about unemployment insurance amid the pandemic.

“Our economy has turned the corner against the coronavirus,” said Scalia in his opening statement. “We celebrate it…not because we think the job is done, but because we

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The May jobs report warrants caution and optimism: Morning Brief

Monday, June 8, 2020

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Employment levels are bad, but the direction is good thanks to stimulus

The U.S. economy unexpectedly added 2.5 million payrolls in May, and the unemployment rate unexpectedly fell to 13.3%. This was shockingly better than the 7.5 million payroll loss and 19.0% unemployment rate expected by economists, who were left dumbfounded.

As usual, the Bureau of Labor Statistics’ (BLS) monthly report was met with intense scrutiny.

Overall, the experts’ reaction can be summed up this way: The accuracy of the numbers is questionable. And even if they were accurate, there’s still an incredibly long way to go. But the numbers are going in the right direction, and we have monetary and fiscal stimulus to thank for that.

We expand on some of the issues below:

The true unemployment

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