Mass layoffs are hitting more than just the big tech industry.
On Sunday, former Walmart CEO Bill Simon joined “Fox & Friends Weekend” to warn Americans about… Harmful effect layoffs for businesses It could be on the weak US economy.
TECH LAYOFFS continues as IBM, SAP announce huge cutbacks
“It’s crazy right now. We’re stuck in this loop, wage inflation, product inflation, cost inflation. And that cycle just continues. And I think, unfortunately, an inevitable byproduct of some of the Fed’s moves and as the necessary medications we have to take to kind of calm things down And control inflation again in some of the layoffs to come.” Simon explained to co-host Will Cain.
Although the job market remains happy and is one of the few bright spots in the economy, there are signs that it is starting to ease. In addition to a number of high-profile layoffs in the tech space over the past month, the The economy added only 223,000 jobs in December, the smallest gain in two years.
ARE TECH LAYOFFS THE CANARIES OF THE AMERICAN JOBS MARKET?
Federal Reserve officials They made it clear that they expect the unemployment rate to rise as a result of the interest rate hike campaign. Updated projections from the December central bank meeting show that officials expect unemployment to rise to 4.6% by the end of this year, up from the current rate of 3.5%.
Will Kane clearly indicated that unemployment “has to happen” In order to effectively cool inflationprompting him to ask the former Walmart boss if he thought the layoffs put the country “on the path” to getting the economy back on track.
“In theory, yeah, I agree with you, Will. But the problem is, at the same time, there’s wage inflation going on. For example, Wal-Mart announced last week that they’re raising their minimum wage, their starting wage to a minimum,” Simon replied. $14 an hour, that’s a 17% increase.
The Fed’s closely watched inflation gauge cooled in December, but prices remain elevated
“Food costs have gone up 23% in the last two years. Now, wages are up 17% at Walmart, 25% at Delta for pilots, 25% in the railroad industry. And pay increases for this kind of work are counter to the hiring and layoffs that we’ve started In his vision, there are a lot of things going on.”
The former Wal-Mart CEO, however, continued to highlight a unique problem The immigration problem in the United States has been imposed on the workforce.
“We need workers, but we need workers that we can hire in the country legally. What’s happening now is you’re allowing people who can’t participate in the workforce but are increasing demand. So you’ve increased demand driving up prices without a workforce to be able to service it. So it is a complicating factor. Some inputs are trying to solve the problem of inflation, but you have opposite forces from this kind of chaos.”
Simon further warned that consumers could be in “a world of harm” if the Biden administration does not take action on the country’s inflation issue soon.
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“I think the most important thing that’s going to happen in ’23 is we have to get that inflation under control. Another year of high single-digit inflation, low double-digit, and we’re going to be in a world of hurt inflation hurts 100% of the population,” Simon concluded. “.
FOX Business’ Megan Heaney contributed to this report.