American Companies Packed Six Years of Net Hiring Into Ten Months
The 2021 hiring binge left businesses holding workers they no longer needed when normal life returned.
PolyMatter · The Entry-Level Job CrisisIn just ten months, American companies added as many workers on net as they had in six years.
Between January and November 2021, employers added more workers on net than they had during the entire period from 2014 to 2020. Demand for goods was soaring while workers were scarce.
Stuck at home with stimulus checks, Americans bought puppies, upgraded home offices, and stockpiled essentials. At the same time, the minimum pay people were willing to accept for a job rose. Government payments eased the pain of unemployment, health risks made in-person work costlier, and death and tragedy made people reconsider their priorities.
For about two years, close to a million people left their jobs each week during an exodus later dubbed the Great Resignation. To keep up, companies hoarded labor, preferring too many hands to too few, and keeping extra workers away from rivals.
Then normal life returned, and businesses found themselves holding staff they no longer needed.
Questions people ask
Why didn't companies just lay off the extra workers?
Some did, especially big technology firms that had hired most aggressively. But overall layoffs are actually down, with about 100,000 fewer people laid off in a typical month now than before the pandemic. Hiring, firing, and quitting are all depressed, a sign of a frozen market where employers are holding on rather than cutting.
What is labor hoarding?
It means keeping more workers than you strictly need because hiring is costly and finding replacements later can be harder. During the Great Resignation, companies treated scarce labor like inventory worth stockpiling. The logic was simple: extra hands were better than short staffing, and they kept talent away from competitors.