White-collar workers are facing a challenging job market in 2024, with corporate positions vanishing across major cities like Chicago, Los Angeles, and San Francisco. Even pandemic boomtowns like Austin and Miami are seeing growth in this segment of the labor market flatline.
Nationally, payrolls for white -collar jobs were up just 0.6% from a year ago in March, about a third of the overall pace of job creation, according to the Bureau of Labor Statistics. Banks, consulting firms, and tech companies that went on hiring sprees during the pandemic are now slashing jobs as incentives have faded.
The weakness in white-collar sectors is partly due to a pullback in temporary-help employment, which is often the first to go when times get tough. Job seekers are also finding that the available work tends to be blue-collar and lower-paying.
Vanguard's analysis of employer 401(k) plans shows that hiring rates and wage growth are faster for workers in the bottom third of the income distribution. Higher-income workers are accepting slower wage growth as a trade-off for remote work flexibility, but even that's becoming scarcer. The percentage of high-paying remote and hybrid jobs has dropped significantly in Q1.
For small and medium businesses, the white-collar job slump could present both challenges and opportunities. On one hand, SMBs may struggle to compete for talent against larger firms that can offer more stability and resources. They may also face pressure to raise wages for lower-income workers while cutting costs elsewhere.
On the other hand, the shift towards blue-collar and in-person work could benefit SMBs in industries like healthcare, legal services, and accounting. SMBs that can offer competitive pay, benefits, and flexibility may be able to attract skilled professionals looking for alternatives to corporate roles. Ultimately, navigating the white-collar job market in 2024 will require agility, creativity and a keen understanding of workforce trends.