It’s no secret that the American economy has spent the last several years struggling to stay afloat. Since the onset of the COVID-19 pandemic, thousands of jobs have been plunged into uncertainty and chaos. While some individuals have thrived working from home trying new, innovative job opportunities, others have struggled. Especially white collar tech workers. White collar tech workers are the unlikely victims of this economic climate.
With the rise of robots and other technologies, the question of whether or not bots will replace blue collar workers has been debated. While there are some white collar jobs that could be replaced by bots, the focus has been on blue collar employees. However, it seems that white collar individuals have their own problems.
What is a White Collar Recession?
Usually, when a recession strikes, the first employees to experience layoffs are blue collar workers. Workers in labor-intensive industries such as manufacturing and construction often see themselves out of a job during economic downturns. From there, it’s often service workers who take the hit. This is because these types of positions are seen as more expendable than white collar desk jobs.
Typically, white collar workers don’t see too much of an impact from a recession until circumstances become somewhat dire. However, in a white collar recession, things work in the opposite direction. Although everyone struggles somewhat due to economic changes, the white collar workers are the ones who take the biggest hit.
The Mess of the Pandemic
The recent pandemic created an unprecedented economic crisis. With which most Americans struggled to cope. At the onset of COVID, Americans were told to stay home to prevent the spread of the virus. As a result, many blue collar establishments sent workers home temporarily. This caused a brief rise in unemployment.
During COVID, Americans were spending more time online than ever before. Internet usage in the average American home increased by 70%. And, instead of going out to get groceries or food, used delivery apps like DoorDash and Amazon. These apps became widely popular, and somewhat of a necessity.
Insurgence of Employment
Because most Americans were staying home and using online services, naturally, big tech thrived. Amazon, for example, offers Prime services to their customers – a subscription that promises 2-day delivery on eligible items. When sales skyrocketed during the pandemic, naturally Amazon was inclined to hire more and more employees to keep up with demand and deliver on that promise to consumers.
Amazon wasn’t the only big company to experience this staggering rise in profits, either. Other companies which adapted to a rapid rise in demand include Shopify, Pepsi, Netflix, Meta, and Snapchat. Naturally, in order to meet these rising demands, these companies employed vast amounts of new white collar workers.
The Perfect Storm
After sending their employees home for COVID, CEOs struggled to keep profits up simply because people were staying home. CEOs anticipated employees coming back to work after the pandemic, but they were sorely mistaken.
Those blue collar workers ended up having to find employment elsewhere in the meantime just to survive. Thus, creating what many economic analysts refer to as a “structural labor shortage”. This is a self-perpetuating cycle of labor being lost and regained. This cycle benefits these major corporations.
The Value of Labor is in Decline
In order to create the illusion of abundant job opportunities, big tech companies post job listings, only to later redact them without accepting new employees. Sometimes, salaries won’t even be listed, especially if the company isn’t paying a competitive wage. This drastically skews the perception of job opportunities that are actually available.
With white collar workers being laid off and (sometimes) rehired at such an alarming rate, and blue collar workers being misled by corporations, it’s no surprise that a recession is underway. Recent economic instability has caused many working Americans to question the integrity of the job market.
Additionally, many major companies are now “labor hoarding”. This refers to the act of retaining employees whose labor goes unutilized. Companies don’t want to run the risk of losing potential labor, but they also don’t want to risk losing profit. So, they continue to hold onto employees while providing them with minimal hours and benefits. This forces many Americans to find secondary work elsewhere, thus perpetuating the struggles of the middle and lower class.
This same line of thought is applied to the white collar industries. Corporations want to maintain output and profits. But they simultaneously seek to cut labor costs. In the case of white collar workers, this results in employees being laid off while their responsibilities are transferred to their peers. Their peers usually receive little to no additional compensation.
Overall, many big tech CEOs have have admitted that their companies simply expanded too quickly during the pandemic. And, they failed to plan how to descale operations – or to descale at all.
In addition to the end of the pandemic, cultural shifts in mindset among Gen Z have also changed the way people think about work. Companies are struggling to keep up with the modern consumer in more ways than one.
Why White Collar Workers?
Since the end of the pandemic, these big tech companies have noticed a significant drop in profits as Americans get back to their “normal” lives. Now, in hopes of returning to “normalcy” and continuing to generate substantial revenue, these companies have had to execute mass layoffs of tens of thousands of American workers. The primary target? White collar employees.
The instability created by COVID-19 ripples from the blue collar industries out to their white collar counterparts. Because white collar workers are generally skilled laborers with higher education levels, the jobs can’t be picked up by just anyone – unlike many blue collar jobs.
Corporations, in a constant effort to be on the “winning” side of the economy, are starting to layoff and then rehire their employees. This creates white-collar specific instability. When people make less money and save more, it cultivates the ideal environment for an economic recession; a lack of money flowing through the system.
How to Navigate a White Collar Recession
Although the looming threat of a recession is nothing to brush off, it doesn’t have to mean the end of the world. There are ways you can navigate the anticipated economic difficulties and emerge relatively unscathed.
Here are 3 tips to help you get through the troubling times that may lie ahead:
Be Open-Minded
During times of economic uncertainty, it’s critical more than ever to be flexible and open to unfamiliar roles and situations. Remember that job requirements are often more like preferences than hard and fast rules.
If you find yourself down on your luck, try applying to jobs that are somewhat out of the box or different from what you might be used to. This shows employers a willingness to adapt and grow.
Network
Networking remains one of the most effective ways to find a job, even in the modern world. Persevere through the economic crisis and continue to connect with other individuals within the industry. You never know which connection may give you a boost when you need it most.
Increase Your Value
Increase your value and keep learning new things. This will serve you better than most other advice. The more you invest in yourself and your own skill set, the more valuable you are to potential employers. Even if you have to take your career in a slightly different direction, you’ll pick up new experiences and knowledge along the way, which will help you create better long-term job security.
Conclusion
With the current economic climate rapidly changing around us, it’s becoming increasingly difficult to predict the next turn of events. Corporations are scrambling to maintain profits despite the constant fluctuation of the free market, and as a result, blue and white collar workers alike struggle to stay afloat.
Team Writer: Ari is a writer, blogger and small business owner based in Washington state.
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