Usually in economic slowdowns, it’s low-income workers who get cut first, but the recent increase in unemployment insurance (UI) claims in the US has been more broad-based.
Looking at the Census’ Household Pulse Survey from March 29 to April 10 and comparing it to a week around the same time in 2022, the number of UI claims by Americans making more than $200,000 moved up by some 500%. During roughly the same period last year, 18,100 Americans at this salary level had applied for initial UI. Now that number has climbed to 113,800.
White-collar workers feel the heat
This trend has shown up in earnings announcements, too. After eliminating about 500 corporate positions last September, the retail chain Gap plans to make even more job cuts on that side of the business, according to a report from the Wall Street Journal.
3M, which has been hit by the decline in electronics sales, plans to lay off 6,000 workers globally, but with a focus on reducing the size of its corporate center.
Amazon’s Whole Foods Market laid off a few hundred corporate employees who made up 0.5% of its entire workforce, according to an executive memo sent to staff this month. The memo noted that the layoffs wouldn’t close any stores or affect any distribution center workers.
Earlier this year, General Motors planned to cut the jobs of salaried workers and executives. After 5,000 buyouts from white-collar workers leaving, however, the company was able to avoid layoffs altogether.
The noticeable weakening at the higher end of the salary scale also reflects the need for companies like carmakers to keep meeting consumer demand even as they cut back on expenses.