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Before COVID struck, economists at L.A.-based jobs marketplace ZipRecruiter had found that teacher job applications were down.
"We interviewed some teachers saying they had friends going into edtech companies and other startups, taking UX courses or going into content-marketing and tech roles and quickly 'earning so much more than we are'," ZipRecruiter labor economist Julia Pollak told dot.LA.
That led to a flight from the comforts of a stable job with a pension for the high-risk, high-reward world of startups. "There was a clear trend away from those safe jobs," Pollak said.
That trend seems to have reversed.
<p>A <a href="https://www.nber.org/papers/w27907.pdf" rel="noopener noreferrer" target="_blank">new working paper</a> from the National Bureau of Economic Research finds that, in the wake of the pandemic, job seekers have shifted their searches away from early-stage companies and toward large, established firms. They've also widened their search parameters, seemingly more open to a broader array of roles, industries, locations — even lower salaries. </p><p>What they seem less flexible about, however, is stability. And that could spell trouble for startups.</p><p><span></span>"Our findings uncover a flight to safety," the authors conclude. </p><p>The paper is based on proprietary data from AngelList Talent and was written by Shai Bernstein of Harvard Business School, Ting Xu of Darden School of Business at the University of Virginia and Richard Townsend of the Rady School of Management at UC-San Diego.</p><p>The trend "happens mainly among high-quality job seekers, which is what drives high-quality talents away from young startups to more established firms," Xu told dot.LA. "For example, you may be willing to commute farther, accept lower wages, or work in a less familiar sector in order to be affiliated with a larger firm."</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img
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data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDQ2NzIyMC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY4MTMyNzYzMX0.71FOvhyCUxv5SaZ9QVgZD-sfQ063XNfDCXVxDXnWBXE/image.png?width=980"
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data-rm-shortcode-id="880a9a48faae0179cc8b49333a660235" data-rm-shortcode-name="rebelmouse-image" />
<small class="image-media media-caption" placeholder="Add Photo Caption...">Panel A (Panel B) shows within-firm changes in the average experience (quality score) of job applicants from February to May 2020. </small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Data from AngelList Talent</small></p><p>ZipRecruiter's Pollak was not affiliated with the study, but she said the trend makes sense. <span></span>At a time when many people have lost their jobs to the pandemic, she said, it's no surprise that big names and established corporations would yield a higher proportion of searches.<br/></p><p>"When you have people thrown into a job search very suddenly, they don't know what to search for. (In such a situation), most searches on ZipRecruiter are from people who don't know what they want, but to the extent they know of employers, it's those with household names and brand recognition that often get more applicants," she said.</p><p>Pollak added that established companies are more likely than startups to hire in multiple cities, and to offer remote work opportunities. Job searches for "remote work" and "work from home" have skyrocketed, Pollak said, so it follows that firms that offer those opportunities are seeing more applications. </p><h2>What Can Startups Seeking Talent Do?
</h2><p>"Unfortunately our results mean that early-stage ventures need to try harder to attract talent during downturns," said Xu.</p><p>One thing Xu suggested might make top talent accept more risk in unstable times: more money. If that doesn't work, he suggested that startups get creative, perhaps offering more equity and/or flexibility.</p><p>Pollak had some suggestions as well. </p><p>"These days, when you start a company, you often don't need to hire that many organic staff members. You can get an HR service and an accounting service and rent computers and use an IT service; that's how many, many startups begin and scale initially," she said. </p><p>Pollak noted she has seen a sharp increase in activity among staffing companies and agencies that match companies with temporary and contract positions. </p><p>One benefit of using such services: they allow young companies to save money on things like payroll taxes and health insurance, she said. And once they start to grow, they'll likely have an easier time demonstrating to prospective employees that they, too, can offer job security.</p>
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Despite Better Unemployment Numbers, Job Sites See 'an Early Tsunami Warning' in Hiring Data
Sep 04 2020
- Although Friday's U.S. jobs data show continued declines in unemployment, many economists, such as from ZipRecruiter and LinkedIn, are concerned at the data they're seeing.
- One of them called the decline in employers' job postings on ZipRecruiter "an early tsunami warning" and a "pull-the-ripcord emergency moment."
- Several factors suggest pessimism from businesses about the near future, including the recent dry-up of government stimulus alongside ongoing operating constraints due to the pandemic.
<p>
Friday's jobs report showed the U.S. unemployment figures continuing their decline to 8.4% in August, from a high of 14.7% in April.
</p><p>
Despite that welcome news, more recent data from L.A.-based ZipRecruiter contains unsettling signs for the future. After 10 weeks of rising activity from employers, job postings have reverted to a downward trend since mid-August.<span></span>
</p><p>
"This is an early tsunami warning," ZipRecruiter labor economist Julia Pollak told dot.LA. "It could be the start of exactly the sort of systemic breakdown the government was trying to avoid in the beginning [of the pandemic]."
</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img class="rm-lazyloadable-image rm-shortcode" type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzYzNjA1MC9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTYyMTQ2NzMwM30.I3Ofqpb0lhvceXF7OlHGFKaFhdXfaLeUwQe3cs6Gte4/image.png?width=980" id="6f9c2" width="600" height="371" data-rm-shortcode-id="041a1a808ed6d0872296828f0a9da8ba" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">U.S. data provided by the U.S. Bureau of Labor Statistics. Local data provided by the California Employment Development Department and includes seasonally adjusted final data except for July, for which finalized data was not yet available. No local data was yet available for August.</small>
</p><p>
Unemployment rates don't tell a full story about where the economy is headed, Pollak said. It's a reminder that she wants people in power to heed.<br>
</p><p>
"I think Congress should see this as an emergency sign," she said, noting that job postings on ZipRecruiter tend to be an early indicator of job growth – or decline.</p><p>The job picture in California and Los Angeles is similar to that of the country at large, according to ZipRecruiter's data. Los Angeles <a href="https://www.bls.gov/web/metro/laulrgma.htm" target="_blank">has one of the highest rates of unemployment</a> among large metro areas. <br></p><p>LinkedIn, another job board, <a href="https://www.linkedin.com/jobs/blog/linkedin-workforce-report-september-2020-los-angeles-ca?src=re-other&veh=www.wsj.com%7Cre-other&trk=workforce" target="_blank">found hiring was 16.2% lower</a> this August than last year. </p><p>It's not surprising to Jerry Nickelsburg, an economist at the UCLA Anderson School of Management. He worries it will exacerbate inequality in Los Angeles, as industries being hit hardest tend to skew toward lower-income sectors, like logistics and tourism.</p><p>Nickelsburg said the federal unemployment data paints it a murky picture. The regulatory changes in recent months that led to a number of re-openings "mask what's going on underneath" at the economic level, he said. "We have less visibility than we normally have," Nickelsburg added. Assuming a continuation of the start-and-stop pace of opening up and the regulatory response, he foresees a "soft labor market in spite of the strong jobs report," noting that the job growth in today's data is fueled in part by temporary positions associated with the U.S. Census.<br></p><div class="rm-embed embed-media"><div aria-label="" class="flourish-embed flourish-chart" data-src="visualisation/3657274" data-url="https://flo.uri.sh/visualisation/3657274/embed">
<script src="https://public.flourish.studio/resources/embed.js"> </script>
</div></div><p>
LinkedIn's principal economist Guy Berger also reported this week that hiring observed on LinkedIn (measured by the share of members adding a new employer to their profiles) fell from July to August. "Our takeaway is that this month's data shows that the virus has created a 'ceiling' on just how much the economy can return to normal," he said. "Given how much higher COVID transmission is here in the U.S. vs. aboard, the ceiling might be lower here."<br>
</p><p>
"My real fear is what will happen in September," Pollak said. "I look at a downturn in job postings as a break-the-glass, pull-the-ripcord emergency moment."</p><p>Pollak said her alarm follows weeks of optimism. More companies had been signing up for ZipRecruiter's services. Every single industry and every single state had seen job postings increase in July and August, she said. But now, those trends have stopped, and a number of factors appear to be turning that summer of hope into a fall reckoning:</p><p style="margin-left: 20px;">
<strong>Ongoing Uncertainty: </strong>Without clarity on the pandemic and the government's policy to stop it, businesses remain inclined to do what they usually do in the face of uncertainty: sit and wait. Berger, the LinkedIn economist, said this is due at least in part to a "less centralized U.S. response" to the pandemic and that the uncertainty is holding businesses back from long-term investing and hiring.
</p><p style="margin-left: 20px;">
<strong>Reduced Economic Activity:</strong> Anticipated closures of spectator sports, performing arts, colleges and ski resorts will hurt not just the businesses in those industries, but also adjacent ones like bars and restaurants. This expected dampening follows a quiet summer, which is normally the banner season for many such businesses. "Summer profit margins weren't large enough to sustain many businesses," Pollak said. Facing a future with fewer customers, "many will have to close in the fall."
</p><p style="margin-left: 20px;">
<strong>Government Stimulus Is Drying Up:</strong> The $350 billion payment protection program loans designed to help employers pay their workers during the shutdowns ceased on August 8th. $600 weekly unemployment checks expired in July, causing a $60 billion reduction in unemployment payouts in August. "That is almost certainly reducing consumer spending right now," Pollak said, <a href="https://www.ziprecruiter.com/blog/how-unemployment-benefits-affect-job-search-during-coronavirus/" target="_blank">pointing to a survey ZipRecruiter conducted</a> this summer that found over 40% of respondents would be unable to pay their rent if unemployment payments shrunk. Congressional talks on renewing a stimulus program <a href="https://www.wsj.com/articles/mnuchin-urges-congress-to-passmore-stimulus-funding-11598988384" target="_blank">have been gridlocked</a>.
</p><p style="margin-left: 20px;">
<strong>Schools Aren't Opening: </strong>Berger called virtual classes and delayed school re-openings "a severe challenge for households where all parents work." That's behind his topline takeaway that, in addition to a vaccine, his data point to a "need to get money back in the hands of Americans who need it and a childcare solution for the interim."
</p><p style="margin-left: 20px;">
<strong>Consumer Confidence Is Down:</strong> Conference Board, a think tank, <a href="https://conference-board.org/data/consumerconfidence.cfm" target="_blank">released data this week</a> that consumer confidence has fallen two months in a row. "If confidence goes down, we can expect spending to go down," Pollak said – both among those who have no choice and those on the fence about, say, buying a house or a new car.
</p><p>
Pollak added that since neither the stock market nor housing values have crashed, her data point to widespread "concern about COVID, the future course of policy, and the ability for businesses to reopen and be sustainable given reduced sales and rules limiting their capacity."
</p><p>
Over the coming months she and others will be closely watching for the speed at which jobs are able to return to their pre-COVID baseline, and other indicators of a dynamic labor market. These include participation rates among prime-age workers and women, wage growth and long-term unemployment. But as long as the pandemic lingers, those indicators may be tepid.
</p><ul class="ee-ul"></ul><p>
"We can't fully bounce back until there is more certainty around the virus," Berger said.
</p>
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In Crisis, L.A.'s New Civic Tech Program Pivots from Providing Internships to Basic Needs
Apr 22 2020
The vision of LA-Tech.org as it prepared to launch this month was of a thriving tech ecosystem coordinating its resources to give back to the L.A. community.
Built by a group of L.A. CEOs and founders from the likes of Cornerstone, Blackline and Factual, the coalition originally sought to bridge the growing divide between wealth and want in Los Angeles through programming to provide low-income youth with internship opportunities at tech companies like Snap and ZipRecruiter. The idea was both to give back and to support the L.A. tech world by strengthening its local labor pool and helping employees feel connected to their community.
<p>But as the coronavirus plagued one corner of the world after another, holding live events became impossible and the suffering of low-income Angelenos took on new urgency. Taking a page out of the startup playbook, LA-Tech.org has pivoted. It is now launching with a <a href="https://la-tech.org/covid-19-response" target="_blank">fundraising program</a> to raise $415,000 for two local nonprofits, <a href="https://homeboyindustries.org" target="_blank">Homeboy Industries</a> and <a href="https://www.ifoster.org" target="_blank">iFoster</a>. In doing so, LA-Tech.org is addressing two areas of severe collateral damage caused by the pandemic: food security and the digital divide.</p><h2>An Ugly Crisis, Acute Needs</h2><p>"The economic contraction that's happening in L.A. right now is worse than it was in the last recession," said LA-Tech.org Executive Director Sean Arian, who in 2008 was Director of Economic Development for L.A. Mayor Antonio Villaraigosa. "It is faster than it was in the last recession, and it is hitting the lowest-income people first."</p><p>The crisis, Arian told dot.LA, is thus exacerbating the economic inequality that spurred the formation of LA-Tech.org in the first place. Since 1990, low-wage service jobs have grown in L.A. by 17%, while high-wage, mostly high-knowledge jobs have grown by 7%. But middle-wage jobs have plummeted. </p><p>Whereas the 2008 recession first struck the well-off – mostly via finance and real estate – the coronavirus fallout is most acute among the economically vulnerable. Worse, the nonprofit community that seeks to serve such people has seen its funding shrivel. </p><p>"The need for services for low-income people has gone way up at the same time that revenues – basically donations – to nonprofits have started to dry up," Arian said.</p><p>After several conversations across government, nonprofits, and the private sector, LA-Tech.org had its plan of action.</p><h2>Combating Food Security with the Homies</h2><p class="shortcode-media shortcode-media-rebelmouse-proxy-image">
<a href="https://upload.wikimedia.org/wikipedia/commons/2/28/Homeboy_Grocery_Salsas.jpg" target="_blank"><img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vbWVkaWEucmJsLm1zL2ltYWdlP3U9JTJGd2lraXBlZGlhJTJGY29tbW9ucyUyRjIlMkYyOCUyRkhvbWVib3lfR3JvY2VyeV9TYWxzYXMuanBnJmhvPWh0dHBzJTNBJTJGJTJGdXBsb2FkLndpa2ltZWRpYS5vcmcmcz0zNjcmaD01YTVlZjQ2Y2Q1NzQ3NDBhNGI0YjQwOGViYTE5ODM0MWI3ZmFkYTUwYTUwMzAxZjdjNjkxMzI0MTI0OWE4M2FlJnNpemU9OTgweCZjPTI3NTg0Njg2OTQiLCJleHBpcmVzX2F0IjoxNjQ1NDc2NTI2fQ.9S3zTdhetOCBM5GE3TYg71LG2Frqwcbm7pL8Pimd9bc/image.jpg" id="4decf" class="rm-shortcode" data-rm-shortcode-id="3049c45296b4b7ba57e8fed049109e25" /></a>
<small class="image-media media-caption" placeholder="Add Photo Caption...">File:Homeboy Grocery Salsas.jpg - Wikimedia Commons</small>
<small class="image-media media-photo-credit" placeholder="Add Photo Credit...">
<a href="https://upload.wikimedia.org/wikipedia/commons/2/28/Homeboy_Grocery_Salsas.jpg" target="_blank">upload.wikimedia.org</a>
</small>
</p><p>Homeboy Industries helps formerly incarcerated gang members heal from conflict and trauma and re-enter society. Included in its suite of therapeutic programs is a chain of social enterprises – the Homeboy café, bakery and catering service – where a subset of members work, usually before moving on to jobs elsewhere. About 90% of participants have never held a job for more than a month, Homeboy chief executive Tom Vozzo told dot.LA.<br/></p><p>With the coronavirus shuttering its programming and slashing business traffic, Homeboy can't serve or employ as many people. In response, it, too, has pivoted, to making fresh, prepackaged meals. And it will now be getting a hand from LA-Tech.org.</p><p>"If we can get to 1,000 meals a day then in our café we can get to employing the same amount of people we had before we closed our doors," Vozzo said. Currently they're making less than 500 meals per day. </p><p>Donations will not just help Homeboy keep its program running, but will also send prepackaged meals to the needy, including people experiencing homelessness, foster youth, and low-income seniors. </p><p>"There are a lot of tech companies that have these huge catering budgets they aren't using anymore," Arian noted. He hopes these funds can be redeployed via LA-Tech.org to Homeboy. </p><p>Having adjusted its operations to accommodate social distancing, Homeboy is ready to move quickly. "Once the L.A. tech community donates money to us, in 48 hours we're turning that around into meals." </p><h2>Filling the Digital Divide with iFoster</h2><p class="shortcode-media shortcode-media-rebelmouse-image">
<img
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data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzE1MTY4OC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY3NDQzNzk4MX0.DWRm3jznA65H_BfvRIEKyRwRyLjFWvB4VXq8Iu-n1zk/image.jpg?width=980"
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</p><p>"What happens when someone who's a low-income student has to do all their learning online and doesn't have a laptop?" noted Arian.<br/></p><p>"Mass panic," said Serita Cox, co-founder and chief executive of iFoster, an L.A.-based, national nonprofit that aims to provide resources to foster youth. </p><p>Normally, Cox told dot.LA, items like laptops and smartphones are a key priority for iFoster, because technology isn't included in typical child welfare benefits. A joint study with USC, Cox noted, found that only 21% of late-high school and early-college age foster youth in L.A. county had access to the internet and a computing device at home; that compares to 79% of non-foster, low-income students aged 13-17, according to a Pew Research report. </p><p>"In child welfare, technology took a backseat to basic needs," Cox said. "But now, technology has come front and center as a basic need."</p><p>The list of resources that foster youth depend on but can no longer access face-to-face include school, family visits, social workers, attorneys and therapists. Requests for gear have ballooned, from a typical 50 per week to over 500. </p><h2>Stepping Up for L.A.</h2><p>LA-Tech.org has a fundraising goal to deliver 1,000 laptops through iFoster.<br/></p><p>"Only 8% of foster youth ever get a college degree," Cox said. "We can't make it worse."</p><p>Arian wants tech companies throughout the community to get involved with the <a href="https://la-tech.org/covid-19-response" target="_blank">Step Up For LA</a> program and "make it their own."</p><p>It's the beginning of what the LA-Tech.org founders hope will be an ongoing collaboration among the tech community in its efforts to give back. </p><p>"We felt," said Adam Miller, Chief Executive of Cornerstone OnDemand and co-chair of the LA-Tech.org Board (also a dot.LA investor), "like we could accomplish this collectively much better than we could individually."</p><p>---</p><p><em>Sam Blake is a reporter at dot.LA, where he primarily focuses on media & entertainment. Find him on Twitter @hisamblake and email him at samblake@dot.LA</em><br/></p>
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