Workers are stuck in place because everyone is too afraid of a recession to quit

I can empathize with the article. Earlier in my career, I would interview with any company that offered a significant pay increase. "Why would anyone turn down a 30% pay raise" was my mentality. Then I had a couple of jobs that didn't go well because of personality mismatches and politics. Which made me realize that even if I'm confident about my technical skills, that's no guarantee that I'll land on my feet at a new gig. Fast forward another few years, and the recession made me realize that I can't just snap my fingers and land a new better-paying job anytime I want.

Combine both these factors, and I'm now ignoring recruiters who are begging me to interview for insanely well-paying openings. I have a decently well-paying job with good work-life balance, and colleagues who respect me. And I have no interest in throwing that away just to navigate a political minefield at a new job

In 2020, COVID caused the most dramatic rise in unemployment the U.S. had ever seen. Employees who were lucky enough to avoid being laid off during the first few months of the pandemic largely hunkered down and resolved to stay with their current employer until the dust settled, even if they would otherwise have been looking to change jobs.

This led to a phenomenon in 2021 and 2022 called the Great Resignation, a period where hiring began opening up again. All of those employees who'd been itching for an exit saw an opportunity to make their move.

One of the interesting effects of this higher-than-normal employment migration in a relatively short period of time is tenure synchronization, where a large percentage of employees have been with the company for the same amount of time. Naturally, there will be some variation in when they decide to make their exits, but this synchrony does increase the chance of a mass exodus event once they've passed the year of average tenure.

There are other macroeconomic phenomena that are contributing toward sustained "phase locking" of the amplitude of employment migration. Post-pandemic, we saw an era of high inflation, and that caused many companies to veer back into more cautious territory and question whether they'd over-resourced themselves during the hiring boom. This led to rounds of layoffs in 2022 and 2023. These conditions have also led to downward pressure on wages. Thus, many employees are waiting until the next hiring wave to make their move.

These factors are likely to induce even more phase locking than the tenure synchonization alone, which means that we could see a second or even third "Great Resignation" event occur during the current decade as employees' synchronized tenures lead to voluntary exits that coincide.

When people started to coin the term "silent quitting", it was a tell-tale sign of what was to come: a screwed up economy with positive unemployment rate.

The measurements and metrics of the Keynesian economy need to evolve, they're about the same nonsense for the last 50 years. They have no consideration for the modern days, open economies, globalisation, remote work, isolation, depressive open offices and meaningless work.

Meanwhile we're still looking at the same job figures as a primary indicator of doom and gloom.

There is no measurement for innovation, happiness, self-worth or satisfaction; if they had one, it would show that it plummeted to never seen levels of despair. Job figures don't show how the economy relies on how much we can screw people over with things they can't get away from ("moats"), while being stuck in jobs they never wanted to do in their right minds ("career").

It all started with mortgages if you ask me. It never became about how much you could afford a house, but how much a third-party thought they could get out of you to afford a house - they inflated the prices of. The idea that we buy these extremely expensive "permit to live here", paying for the rest of your life is mental.

We hear this from candidates pretty often (it's the second most common specific reason for a candidate to turn down outreach for a job, after "please don't match me with crypto companies" [1]), although we're new enough that I can't make an apples-to-apples comparison for how common it was prior to the current environment.

What's odd is that, on paper and for the engineering jobs we work with specifically, it doesn't seem like that's actually more justified now than it was a year or two ago. The tech hiring market seems to have bottomed out and to be (unsteadily) on its way back up. Two years ago, prediction markets [2] were pretty confident a recession would occur by this point, but it hasn't. They're now down to about 25% that it'll occur by the end of this year, although the fact that the percentage has stayed flat even as time has run out suggests markets are a bit more bearish now than they were six months ago. And they think [3] that large interest rate cuts are coming.

But perhaps a few years of frustration and seeing others struggle has taken its toll in ways that go beyond object-level economic predictions. Experience with rough conditions might've made people more risk averse, or make them feel more secure in the job they do have (after all, there's a good chance they've survived some layoffs at this point), both of which could (rationally) make them stick where they are even if their opinions of the broader economy were the same or better.

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[1] EDITED to add: reasons they turn down outreach we actually send, meaning it's not disqualified by some structured info we have about their preferences. For example, we know whether a candidate wants a remote job, so even though ~60% of our candidates are looking for remote jobs only, that wouldn't be in this ranking.

[2] https://manifold.markets/chrisjbillington/will-the-us-enter-...

[3] https://manifold.markets/barak/by-how-much-will-the-fed-cut-...

This article appears to be plagiarised from Business Insider:

https://www.businessinsider.com/us-job-market-recession-outl...

> “I feel trapped here,” Amanda said. “I’m financially screwed if I leave, and that’s why I don’t, or can’t leave.”

This is so common. People are afraid of and unprepared for income and status setbacks. Sometimes you need to take a couple steps back to get back on track. (I’m currently taking a step back and I’m intimately familiar with the uncertainty of it.)

The 2010s was a boom time in tech. Total compensation ("TC"), particularly for engineers, went way up. Employers didn't like this. They're not above colluding either. They did it with the Steve Jobs anti-poaching deal too.

Businesses made accomodations during the pandemic to stay open. Remote work really took off. Also, TC continued to rise.

But then some companies failed and the door opened to what I called Permanent Layoff Culture. Most companies end up laying off 5% of their staff every year. This is really an extension of Corporate America's "up or out" culture. The likes of Jack Welch extolled the "virtues" of firing the bottom 5-10% every year.

If you believe the companies, this is necessary. They over-hired. If so, there was a decade of "over-hiring". Why was it fine then?

Market conditions changed such that with a wink and a nod companies could effectively collude on lyaoffs to suppress wages. The goal in cutting staff is to spread their work to the remaining employees (ie free labor) and to stop people getting raises (ie reduce labor costs).

It's really no different to how one food company will raise their prices and every other one will follow suit. There's no direct collusion. That's price manipulation and it's illegal. It's price leadership. What's the difference? Price leadership is legal. There's just no agreement in a smoke-filled room.

Workers afraid to quit? Mission accomplished. They won't be asking for raises.

I’ve heard from some friends at major tech companies that their stock grants are not being renewed as they vest. This is leaving them with sometimes >50% effective pay cuts. And, many are choosing to stay put because they don’t think they have other options.

Not just that, I am tired of wanting to actually work than kowtowing to office rituals like drive to work in rush hour traffic to only then get on teams calls in the open. I am also hearing horror stories of new workplaces being completely obstinate about hierarchy and weird HR rule keeping. In short, many workplaces now have "ritualistic work" rather than actual tasks to complete. These aren't small names either. I am guessing that top level executives actually have no work other than aggregate from below and look busy. Looking busy needs minions.

Tech industry has actually had a recession in jobs but not a recession in earnings.

This is a prime example of how our society has become so precarious for the middle class while the rich just keep getting richer.

It's not just the prospects of finding a new job that sucks, it's also that no one can actually afford to start a business. The continual draining of wealth from the lower and middle classes has had a severe effect on the lower and middle class's ability to compete.

The only way to actually start a business with some potential degree of success involves being a suck-up to massively wealthy individuals so you can onboard an angel investor for your product. This also generally means gimmicks that appeal to the rich and wealthy. A great example is smart kitchen appliance whose goal is to do something worse than what's already on the market so that they can corner people with dark patterns and subscriptions.

Which companies have great training programs and happy lifetime employees?

The main one that comes to mind is Costco.

Situation is quite ridiculous. People are working jobs they don't like and being low-performers on projects they have little control over while working on side projects that they like (for free) and not able to monetize their high performance on those projects. But no matter how good their side projects become, they cannot monetize them due to monopolizing forces. Earning money nowadays is all about having access to money which comes out of a safe money printer.

Yes, I could be doing all this useful stuff which makes 100x better use of my skills than my day job but those things don't pay because I won't be able to find any users for it. I don't have much time for it. I could find users but not users who are hooked to a money printer and can afford to pay. I'm sure most users would love it if they spent 20 minutes trying my side project, however, this is too high of a barrier.

The company I work for is already well hooked into a money printer and already has its own users but, unfortunately, I cannot produce my best engineering work there because there is too much legacy code and, understandably, my colleagues are as beaten down as I am over this industry so the will to innovate is severely limited. The best we can provide is stability.

I've (unfortunately) learned to perceive software complexity as a friend; in the same way as security consultants perceive hackers, as pharma companies perceive chronic illness and as those who build mouse traps perceive mice.

I already got burned badly for innovating at a previous company and experienced politics getting in the way in a mind-bendingly disturbing way so I'm not keen to experience that again!

Repeatedly in my career, I have seen the low-performers and outright saboteurs being promoted and the innovators being suppressed so my goal now is to emulate those people and engage in political bs. It's the only way. I'm a little bit older, I have to think about my finances now. I know how money flows through the economy and I just go straight for the jugular straight out of a money printer... Printing leafy, digital monetary goodness straight into my bank account. Oh that feels nice.

As someone who has been left of couple of months ago, I really feel this. There is very low movement in companies, and this makes it hard to find a new place.

I hope to find something soon, but to be honest, unless people start hiring again in larger volumes, it's hard to get into the larger companies. They let go of a lot of people before, and rather hire those again then someone new. After all, those people are known quantities, I'm not.

Shameless plug: contact me if you need a Senior Software Engineer. Rust, and a whole other bunch of languages.

This is a great time for engineers who saved their money during the good times to get together and start a startup. The easy money will come back eventually, and you'll have an MVP to pitch to investors at worst, and a bootstrapped and profitable business at best.

I'm stuck in place because getting a new job is really hard, or so I hear.

Not related to the content of the article, but did anyone notice how those graphs become more saturated when you mouse over? It made me expect an interactive graph but it's just an artifacty jpg. Interesting little flourish.

Just like the execs wanted…

The very first sentence is "...who are having an increasingly tough time landing a new gig as hiring slows and job boards run dry."

So is the cause and effect backwards?

And now the wheel turns... Two or three years ago everyone was quitting.

Only the scared ones, I left/found new. It worked out and I'm so burned out I rub people the wrong way.

It seems like the employers have a lot to gain by spreading the fear of a recession to make the job market to be more favorable to them.

Didn't the Treasury secretary quip “The enemy keeps postponing when the recession’s going to come... They are dying to have a recession. They can’t bear going into next year’s election with the economy the way that it is.”

https://www.vanityfair.com/news/2019/07/wilbur-ross-democrat...

Wait, that's the former Treasury secretary, they sure knew how to do petty.