The headlines about massive layoff announcements had their intended psychological effect on workers.
By Wolf Richter for WOLF STREET.
The data has been pointing in the same direction for months: Employees have gotten more worried about their jobs after the purposefully scary headlines about global layoff announcements, and after seeing some actual layoffs, and after noticing that employers aren’t quite as aggressive anymore in trying to hire; and so they quit quitting their jobs.
And because workers quit quitting, employers have fewer job openings that the quitters left behind, and so employers need to hire fewer people to fill those newly vacated jobs. At the same time, actual layoffs and discharges have been dropping for months and are well below the pre-pandemic lows. These are signs that the massive churn in the labor force during the pandemic has slowed down to normal-ish levels.
Workers quit quitting: Voluntary quits fell to 3.38 million in January, according to the Bureau of Labor Statistics today, roughly back where they’d been in 2018-2019. The three-month moving average, which irons out the month-to-month fluctuations, fell to 3.45 million, also back to 2018-2019 levels.
Lower quits shows that workers are less confident and more worried, they’re less likely to walk out, and more likely to tough it out, which comes as a big relief for employers that then don’t need to hire people to fill the newly open jobs – and we’ll see that in the data below: fewer job openings, fewer hires, but also fewer layoffs and involuntary discharges.
Job openings, thanks to fewer quits, fell to 8.86 million in January, but were above where they’d been in October and in July 2023, and roughly in the same narrow range for the past seven months.
The three-month moving average rose a smidgen to 8.89 million. All of them are still far above the prepandemic levels, indicating a still hot employment environment, but the fact that they have dropped off from the crazy levels indicates that the era of massive churn has ended.
This data is based on surveys of about 21,000 work sites, released today by the Bureau of Labor Statistics as part of its Job Openings and Labor Turnover Survey (JOLTS). This is not based on internet job postings.
Job openings are not evenly spread. Over the past several months, job openings rose in Professional & business services, where many tech and social media companies are. They spiked in Information, on hiring for the AI mania. They’re at record levels in Construction. In Manufacturing and in Transportation, warehousing & utilities, job openings have dropped from the crazy peak and stabilized at levels that are far above pre-pandemic highs. And they have stabilized at very high levels in Health care & social assistance. Job openings in Wholesale trade and in Finance & insurance are back down to pre-pandemic levels. But in retail – the Brick-and-Mortar Meltdown, as I’ve called it since 2017 – job openings scraped along the bottom.
Layoffs and discharges continued to decline, dipping to 1.57 million. The three-month moving average also declined to 1.57 million. These are historically low layoffs and discharges.
In 2014-2019, layoffs and discharges averaged 1.8 million per month, part of the normal way of business. In March and April 2020, they averaged over 10 million.
This data is based on surveys of about 21,000 work sites, released by the BLS today, and not based on global layoff announcements in the media.
Some of those announcements of global layoffs in the tech sector were made for dramatic effect, it seems. For example, Alphabet announced in January 2023 that it would lay off 12,000 employees globally. Based on its quarterly reports however, its global headcount dropped only in one quarter, in Q2 2023, and by only 8,913 employees, and not by 12,000, and has been rising again since then. Google was laying off people through the left door but was hiring people through the right door, as we have seen.
So some of these grandiose layoff announcements turned into real layoffs, but not all, and they did so spread around the globe, and not only in the US, even as the same companies continued to hire. But they did have a massive psychological effect: people quit quitting.
Hires declined as people quit quitting. These are total hires: those needed to fill newly vacated jobs after people quit or were fired, and those needed for newly created jobs. So when the churn goes down, the number of hires to refill jobs vacated by the quitters goes down. But hires to fill newly created jobs have been strong, as we have seen in the employment reports.
In January, 5.68 million people were hired (three-month moving average), roughly in line with the hires in 2018.
Over 90% of those 5.68 million hires filled jobs left behind by someone who’d separated from the company for whatever reason. An additional 353,000 workers were hired to fill newly created jobs in January – the net addition to total nonfarm employment for January, according to the BLS employment report for January.
These are signs of much reduced churn. Books will be written about why workers quit their jobs in such large numbers during the pandemic – the Great Resignation, as it was called – and why they quit quitting in 2023. When these workers quit in 2021 and 2022, they left behind job openings that had to be filled, and so the job openings spiked, and hiring spiked to fill them, and then these workers quit again, and it started all over again, entailing a massive churn as workers arbitraged the labor market for higher pay and better working conditions and maybe better matching jobs. That churn has now calmed down, and the labor market isn’t that crazy anymore.
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I’m no longer considering quitting my job.
Are you pretty happy where you are, but it’s just not perfect?
In 2022 I was convinced I should leave and be a full time trader.
Good thing I didn’t: I fell on my face and had a round trip year after big gains.
I don’t love my job, there’s better paying work but it’s more difficult! I have a friend who got a raise from a layoff/ new job scenario…
That said I’m in a very small town/ job market. A lot of seasonal work and trades (which can be inconsistent/ quasi- seasonal).
It’s a ski town/ possible leading indicator. I believe that overall skier days are down. I also see that we’re still pretty busy.
No landing yet!
You are right. No landing. We are in the buying/spending mania. It seems it will take a few more years at least. We will live with high asset prices, high inflation, high rates for a long time. This may probably effect the election results.
So the business owners get to pay their workers stagnating salaries while share prices balloon and services inflation increases. How wonderful it must be to be a business owner or large shareholder. Extra support that average Joe (no -asset holding) is getting screwed?
How do median and average wages in these sectors compare over time? Wolf, where are these data publicly released?
Thx
“So the business owners get to pay their workers stagnating salaries while share prices balloon and services inflation increases.”
Unfortunately, it’s likely wage growth needs to slow before inflation will slow. Yes, the average worker gets screwed by inflation.
That’s a funny truth: the manager of our property proudly told me that he had DOUBLED our rates for summer 2022. All that basically goes to the owner of the unit rented, and looks great on the revenue report.
Adjusted for inflation our wages are down over the past few years.
As a Business Own who has had plenty of years of Losses, I have One Question:
Are you, The “Worker” Interested in giving back 40% of your income in the years that the business has a loss?
I didn’t think so – Stop complaining until you have some Real Skin in the Game.
Any Joe can get up in the morning, go to work, and get paid on Friday. Most Joes, would kick, scream, and Cry if they didn’t get paid on Friday.
And All Joes would Quit if they had to Pay (instead of getting paid) every Friday just to keep their jobs.
Business is Hard.
Complaining is Easy.
Dan, I’m not an average Joe. I am concerned about the increase in wealth inequality between asset-holders and non-asset holders. I’m not complaining. I’m lamenting about rising inequality due to the excesses of the FED. Milton Friedman would be rolling in his grave.
I should have clarified business owner as “big-business owners, C-suite executives, and large volume shareholders.”
Personally, I would not be interested in giving back 40% of my income in the years that the business has a loss, unless I owned it. As a worker, why would one subsidize the owner’s losses? If a business has a 40% loss it’s due to poor management, not enough hedging, and/or bad luck.
“Most Joe’s would kick, scream, and cry if they didn’t get paid on Friday.” Yes, that’s because there’s typically a contractual obligation that one is paid for work performed. There’s an understanding between a worker and an owner that the worker can lose his job at no fault of his own but due to the decisions of management and the owner. In return, the worker receives an agreed-upon pay rate for work performed.
“All Joes would quit if they had to pay (instead of getting paid) every Friday just to keep their jobs.” Blanket statements misusing the word “all” can really land one in trouble. Why wouldn’t someone leave a job where they pay to find a job that pays them? Higher education is a clear example. Same with apprenticeships. But barring those circumstances, average Joe should find a PAYING job; a company steeped in losses is clearly in trouble. If the pasture is barren, why not find a greener one?
If owning/running a business were as easy as working 9/5, everyone would do it. Dan is right. Stop complaining.
Your criticism of Fed policy is valid, but couching your criticism in anti-business rhetoric is not.
z2b — it’s not nothing, but depending on the nature/scale of the venture, it is actually pretty damn’d easy and getting easier all the time — esp after the first three years — it’s just that not everyone is into the idea.
Working 9-5 is a regular bitch.
And is a CEO really 300x more valuable than the employees who do the work? Not to mention the bloated incentive packages of the other C-Suite members.
These same ‘strategists and decision makers’ who ‘made mistakes’ certainly are not taking a pay cut or laying themselves off.
Now, if you started your own business, and put the work in, then I believe you should reap the rewards of your efforts. If your just someone who went to a fancy business school and networked, then I think you know the answer.
And yes, I’ve owned my own businesses in the past.
You also forget to mention that your losses offset your gains in future years.
My thoughts exactly.
Thank you Sir 🙏
I don’t know about 300x more valuable, but if you’ve never held a C suite job (even at a small company like I have), you have no idea the complexity, the 24/7 nature of the job, the constant politics, and how “heavy is the head that wears the crown”.
In my experience, most people are happy to be Joe Sixpack, but like to larp and pretend they have the capability, discipline, and emotional intelligence to be the big boss.
Most of the population do not have the requisite skills or intestinal fortitude to be a strong leader, let alone lead a large organization and its people.
You got that right. Ran my own business for 23 years. Union shop so all the guys made the big bucks. Even making top scale wages they could not go a day without getting paid. My brother in law worked for me. My Dad died and the day he took off to be with my sister at the funeral he billed me for 8 hours work because he said the union says he gets a paid day off for a family funeral. Cheap ass.
Personally, I see businesses who pay on the lower end having the most trouble finding people. There’s advertisements for job after job with an hourly rate in the teens. I’m personally in the construction world, and there’s never been a better time to have a real profession that you’re good at (we don’t have the luxury of holding out for great).
I have a theory about that…. a huge number of small and medium size business owners were provided FREE money thanks to PPP. They didn’t share it with employees they kept it. And with it can raise prices for their products/services without fear given the free funds. Free money = higher prices.
I agree with the FREE Money PPP.
Like the other Covid Stimulus, it was given out like candy, mostly to those who did not need it. Many Businesses (owners) got free cash that did not get shared with employees.
The two business owners I know that received PPP because they kept employees on the payroll, even though they could not work, and therefore not provide work product to earn money for the owner. Everyone got paid except the owners in many cases. There were many abuses, but the blanket statements I read here are unfounded
These are Not Blanket Statements.
Most businesses were not shut down and would have kept employees with or without the PPP.
The PPP money went directly to the bottom line and was taxed by the Government as a Partial Return of funds.
My doctor just retired to spend time with family. He is not even 60. I got the letter yesterday. I’m sure his stock and crypto portfolio helped.
My eye doctor and my dentist are a few years older than me, which worries me that they will be retiring soon.
I hope all of the people who retired early (50s or under) because of their stonks see them crash hard and have to go back to work as Walmart greeters.
I don’t think that’s true because they will compete for lower wage jobs and put downward pressure on wages. What you want is for them to start selling their overpriced stocks so they put downward pressure on stock prices. Sort of a chicken and the egg sort of thing…
I’m confident we have a robust economy with significant income from interest and dividends that moves back into the economy through consumer spending. Go Fed high for longer I don’t see higher in the horizon
I also hope everyone does well, including you Einhal. I also hope the Walmart greeters don’t stonk on your head, wouldn’t want that to happen. They got a miserable job as it is, stand there for 8 hrs day after day and try to look pleasant and give greetings.
My Wife MD specialties GYN ,Lyme expert and alternative medicine was offered no tail by malpractice insurer if used in 2015 or 2016. We retire fall of 2015 took no tail deal saved $100,000++. I was 62 with 35 years service and electric company pension and Wife was 59. Private medical practice required 80 hours/week. We never looked back. Result in our in our town about 4000 patients were very upset.
I thought people went to work to get away from their families?
Saw a Babylon Bee Article:
Chinese restaurant owner retired early to spend more time away from his family.
Someone I know working in tech says there are rumors about job cuts, or cuts in different projects. Probably all psychological.
I believe a big factor in the reduced churn of late is the rise in housing costs. Workers may still be able to get a nice raise by switching employers, but having to move and take the financial hit on house price and mortgage makes one think twice.
Many people, especially in biotech, became disillusioned during the COVID, and thought they could find better pay elsewhere. Thanks to all that new liquidity, many companies accommodated these folks.
That period of accommodation has ENDED. Time to actually get some work done kids, and EARN that new salary.
Just my two cents…
Something in tech and I work in tech.
A lot of layoffs happening in tech but overall employee count is still much higher than pre covid.
Amen
Could the reduced quit rate be partly due to a smaller number of employees that have already quit recently? Many of us are lazy (I hate job searching) or risk averse, and many of those who aren’t have switched jobs in the past year or two. And many of the latter are leery of changing jobs too often, as that may not inspire employer confidence.
* larger number that have quit recently
Peter Zeihan focuses on geopolitics and his belief that the US is heading into an unpressidented economic expansion. As the Chinese, Russian, and Germany economies tumble within the next decade, we can expect to see more on-shoring and more growth across a number of industries according to him. He’s written a few books and is enormously popular on YouTube….one of the brightest guys around.
Never thought I would see these kinds of job opportunities in the US during my lifetime. Everyone I know is fully employed if they want to be. I would have given anything for this job market as a kid coming up with virtually no skills.
“As the Chinese, Russian, and Germany economies tumble…”
Mebbe. Meanwhile, the German economy just booked its largest trade surplus ever
… within the next decade …
LOL! Does DEBT matter or not? Do you still think the USA is a global creditor? Do trade deficits matter?
Keep smoking that hopium pipe!
I am not predicting the apocalypse, but things will be very different for the “average” American going forward.
Peter Zeihan may be sharing very intruiging viewpoints, but he speaks publicly with often qualitative economic analyses. I haven’t read his books, so I acknowledge that’s where he might’ve provided quantitative data/analyses to support his hypotheses.
Take macro and microeconomics from Wolf—with his wonderful quantitative analyses—and geopolitics and demographics from Peter.
Blend ‘em together and you get wisdom.
I totally agree with you
Peter Zeihan is nothing more than a moderately informed person who makes outlandish predictions to draw attention and line his pockets. Once you’ve heard him pretend to speak with confidence on a topic in which you have actual expertise, you begin to see how poorly he constructs arguments and how eager he is to paint himself as the great prognosticator of a dire future.
My discovery was more related to “the devil you know is better than the one you don’t.” Just unfortunate that is the case for many as I’m not alone. If my 100% telework goes away then perhaps another dance with the devil or just leave the game altogether although not quite ready for that.
We all need to put our feet down about not returning to the office. I go in twice a week: some days can be fun, but mostly I just come home feeling suicidal.
If we can ever get Americans to stand up for something important (for more than a day or two), I hope it is this.
You’re just a lazy goof-off
Fun in the office? I thought that was where you went to work?
If enough people are there, we just talk all day and take walks. It’s actually gotten difficult to get any work done. Those are generally the days where I don’t feel like crap afterward.
I just don’t go. They want to lay me off, fine. Building is in disrepair, A/C is broken quite a few times, bathrooms are a mess, cafe is closed, and in general its a bleak atmosphere in there.
Besides, what the heck happened to all the talk about saving the environment. By not going to work, I am helping out with traffic, pollution and using my time efficiently. But now that some rich people are getting squeezed by their commercial mortgage investments suddenly everyone needs to go back to work? Good luck.
Glad to have you on our side!
I agree about saving the environment, and we can and will use that to help our cause, but – anecdotal, I know – it seems to me that more people are just driving around at any given time now, like they need to go shopping to make up for not going into the office.
Having to return to the office or work will not lead to poverty or
upheaval like our runaway debt eventually will so I think that’s a more important thing to unite against.
It’s always a rough decision to go it alone and leave the safety and warmth of the job site.
I think what makes it easier is the knowledge that you can do better elsewhere. A stagnant job, with no possibility of advancement, is a curse more than anything else. If you can pick up stakes, and find your nirvana elsewhere, then do it.
That’s the line of thinking that got me to my current job.
I was frustrated with my workplace for many reasons. Took a leap in 2018… years of struggling and accruing debt (mostly just to live in the end), and I became an employee again!
Not everyone is cut out to be a business owner. I also chose poorly when it came to the field of work (I switched to something I had minimal experience with but big dreams about).
I could probably get hired at my old workplace for more than I am making. I choose sanity!
That’s the way to go.
Most people are not able to see this bigger picture.
I’d choose content and Sanity over $$ any day.
Want to add this as well..
Thats the reason I didn’t do exceedingly good in my profession/career though I am very satisfied.
There are a number of factors. A massive reduction in worker mobility due to cheap mortgages of yesteryear compared to the overpriced housing today. Less pressure from inflation, at least for the last year compared to the previous few. More low end wage pressure from millions of migrants.
If inflation picks back up then I bet job churn does too.
Some anecdotal evidence-
I’m an engineer in my early 30s. Between ’22 and ’24 I’ve changed jobs 3 times and raised my salary by 100% as a result. Recruiters were messaging me daily. Now I feel I’m being payed a fair wage and recruiters only reach out one a month.
That’s a pretty standard pattern I’ve seen within engineering vocations; you start out making peanuts/paying dues and then a few hops later, you’ve doubled and even tripled your pay.
Stay at it for ten years and you’ll notice the headhunters pouring out from every corner once again.
It would be interesting to know how many quit with a new job in hand and how many simply quit. In a five year period I did both, working for four different companies, one of them twice. Hired five times and quit five times.
The biggest benefits to a lower labour churn will be felt by managers and supervisors who pay a heavy price in stress filing in for those who quit.
Labor churn won’t matter a damn if we don’t get this DEBT under control
Howdy Folks. An old fools perspective. So, why so many job changes during and after the pandemic? Govern ments around the world, shut down their countries, required business mandates, created business subsidies, created business restrictions.
There is opportunity in chaos, the pivot. I left my safe and well paying big tech job in 2008, yes 2008, to grab an opportunity which has paid off very handsomely 16 years later. Covid-19 was another pivot.
Now, 2024, it is another pivot and I am ready for it. Sense the chaos brewing all around. Navigate swiftly and carefully. Fook, I am excited to be alive every day. Maybe an 8 figure year. ;) Good luck.
Did you wait to write this till the blue line met 2 points? lol
/rhetorical
There are 3 openings in my department which we just cannot seem to fill. Apparently qualified candidates just don’t want to come into the office 5 days a week anymore. So, we just suffer until the economy crashes, at which point filling those openings should become quite a bit easier.
Working sucks. And if you’re being really honest with yourself, you know you agree. How much would you prefer to wake up everyday, go to the front door in your favorite robe and say “thanks again” as you collect your sack-o’-cash from the remuneration agent before proceeding to whatever myriad splendors lay beyond breakfast? Very much??
Working five days straight at anything is a recipe for burnout. The four day work week is a forgone conclusion to all but the brainwashed and them who fetishize toil. Then it’s on to three.
D-F-Bubba..again..Master of the Obvious!
Howdy James. The Lone Wolf mentioned in the article that books would be written as to why. Ifmy post is so obvious, how much more can we blame on what Govern ment did during this time?
As much as possible….and everywhere and anytime and anyway it’s possible..our government still isn’t small enough to be “drowned in a bathtub”, as the Heritage Club and many others of their Corporate ilk and wealth say.
Howdy NBay Limited Govern ment is Fiction. Forefathers knew it would be harder to remove hundreds (The Mob ) rather than a King.
You like our Corporate and landowning and just plain wealthy “mob” running the show better?
So did the “founding fathers”.
We never had a revolution, just a change in management.
Tom Paine statues anywhere?
Nah…they just used him till he wasn’t needed as all good CEOs do……he was just more “human capital” like the guys who fought based on his promises….just another commodity to them. Who are these sick fucks?
Like they used up the planet….but won’t pay the price.
Neither will you….or I….but I did and do my best to take less and stop the stupidity….not that it matters anymore….
Growth for Growth’s sake is the ideology of a cancer cell. I guess you enjoy being one, I don’t.
I don’t have a sky-daddy, either….I’m just a random collection of something with a language I call a “me”.
Quote from a guy who used to be here;
“This Country was built on Slavery and Genocide and that will be it’s future.” (I was made to do some genocide, myself)
Pity……and sorry Abe
Did you know the first bits of democracy appeared after the Bronze Age Collapse…? Not much chance of a re-run……but maybe?
Make that the first DOCUMENTED democracy…….it worked for several millions of years, I figure…..it’s just teamwork, like in Volley Ball (was among top 50 in county, I bet)
All from a rock throwing band of chimps and to be pissed away pretty soon.
Roaches, sea mammals, etc, have been waiting patiently, like original mammals did underground when dinosaurs were having their day.
Fascinating shit we have now made a dead end cluster fuck out of….lotsa wrong moves.
4B or so to go, and the real hard work has been done
Howdy James A Bubba Fun Fact or lets call it A Bubba Obvious Observation.
The Millions ZIRPed are now imprisoned in their home and job and city. Wanna get away? HEE HEE. Bet this was not obvious to millions of folks while giving up their freedoms to ZIRP.
Mr bubba are you saying the ghost of zirp lives, that the house is haunted. Shackles on the restless prisoners.
Happy your still able to find peace and comfort in your travels, people, prices, restrictions can take their toll.
I would add and hope that the lower number of folks quitting is due to them finding a job they enjoy,tis a win for the company and the employee.
Federal Reserve officials from Powell on down seem to be awfully sure that
1) No further rate increases are necessary in this cycle
2) Current interest rates are not just restrictive, but HIGHLY restrictive
3) Rate cuts should be coming at some point, even if not imminently
What if the nightmare scenario of an inflation resurgence occurs? It would probably look something like this: durable goods prices, after falling back to their prepandemic trend, stop deflating due to continued economic strength. Meanwhile, services inflation continues raging. (Goods deflation over the past year has helped to mask this problem.)
I don’t think it’s the most likely scenario, but its probability is not zero. I just wish economists would speak with more humility and less certainty about their economic & policy projections for the future. The vast majority of economists predicted a 2023 recession that never happened.
“Federal Reserve officials from Powell on down seem to be awfully sure that
1) No further rate increases are necessary in this cycle”
That’s not true. I’m on record as saying that they don’t have the stomach for it right now, but none of them have ruled it out, and one or two of them have even recently expressed that there is an outside chance they would have to do it if inflation took off again.
I can guarantee you that fed won’t hike any more.
There is more chance of rate cuts than hike.
They also have the power of jawbone the financial conditions to make it loose or tight. So far they have added fuel to asset inflation which is going on like wild fire.
Economists have confidently predicted ten of the last four recessions.
The amount bet per person at the racetracks around the world didn’t fall in 2023 so no recession.
This next election could like greatly influence the jobs picture given the various approaches to immigration policy by both sides. Will be interesting how businesses proactively try to respond to changes that might tighten the labor market further.
I tell a lot of young people to look for careers that benefits from a healthy nimble strong body. AI’s are going to do more and more of the traditional office/professional/social thinking work. I expect it to take longer for AI guided robots to replace nimble bodies though I wonder how long on this too?
Such upheaval coming.
So, juggling chainsaws, alligator removal, death metal drumming and flamenco dancing are all safe…for now…
Terrible advice.
I know a bunch of 50 year olds whose former nimble/strong bodies are falling apart after decades of use and abuse. Meanwhile I have marketable skills that have allowed me full employment (plus side gigs), to live anywhere, and in full to mostly remote roles.
AI is the latest boogeyman and is no different from word processors and spreadsheets which also spelled the end of all our professions back in the 90s. Still here and wages have gone up 2 1/2x since the pandemic.
JS,
I think these will be minds not programs and software tools. AIs will use tools, like you perhaps?
Better to be safe. Find a career where you use your mind and your body and when you are older hopefully you can be a contractor, supervisor, or something.
All mind workers even doctors, lawyers, engineers are at risk of general AI comes to fruition. Why take the chance?
Why buy a mediocre bachelor’s degree so you can work in an office?
Thomas, it’s a crime to put the word “lawyers” in the same sentence with doctors and engineers.
I am telling you as a software engineer that AI is not there yet, and likely will never be there due to the sheer power requirements. If we start seeing cold fusion actually happening this could change but outside of that nobody has the power to run the computers to power generalized artificial intelligence, not even close.
And more importantly, when that happens we’re all out of a job. Like, literally all of us. Why would anyone work when there’s a computer that can just do the job better, cheaper, faster, without stress or mistakes?
The better advice is to figure out what you’re good at and get paid as much as possible, then optimize down your expenses so you can retire as fast as possible. Check the fuck out of finance capitalism as fast as possible, if nothing more than for the sake of your own sanity.
My theory: the great resignation took place because workers wanted higher wages and maybe a change of attitude from their employers. It’s a pyrrhic victory, but mission accomplished.
The irony being that inflation seems to have eroded their net gains in wages, so the folks who job hopped are taking their raises and now are staying put.
I feel sorry for the loyal workers who missed out on the churn and are effectively poorer for it.
It seems to me companies would do well to keep jobs open in hopes of hiring at lower pay and as they find new lower paid workers, nudge the higher paid workers who got hired over the last year or two at exorbitant pay rates out, thus reducing their labor costs. Though, it would also give the impression the labor market is still strong/stronger than it really is.