S&P 1500 YOY employment growth falls to zero
Steady corporate jobs are being outsourced as technology continues to displace
Professional and business service employment dominated the ADP release today (70,000 jobs out of 158,000). A good deal of the “services” are outsourcing of corporate jobs. In fact, outsourcing companies are the hottest current item in the venture capital universe.
I observe that YOY employment growth among the S&P 1500 has fallen to zero after rising to a peak of 30% in mid-2014. Large companies dominated employment growth and now have stopped hiring. It’s interesting that hours worked surged along with large-company hiring and fell as the large companies stopped hiring.
This suggests that new employment growth is tilted towards jobs with fewer hours and lower compensation. I conjecture that many of these jobs replace steadier, higher-paid corporate jobs with longer hours. That would be a structural change associated with cost-cutting technologies. It’s a possible explanation for the sharp discrepancy between the Atlanta Fed’s calculation of higher pay for the same job over time and the weak overall earnings numbers.