Bosses, investors, and policymakers—all are fearful of a jobs-pocalypse.
By: Ishraq Ahmed Hashmi
There is a big debate going on about the US labor market right now. From big investors to government agencies to ordinary Americans, everyone is afraid of a “jobs crisis.” The media is fueling this fear, while a number of economic indicators seem eager to prove it.
But is America really suffering from a major jobs crisis?
Or are these fears simply exaggerated?
A decade of strong performance by American workers
The first fact is that the past decade has been a great one for American workers. Apart from a few months of Corona:
· Unemployment remained around a 50-year low.
· Wages increased historically
· Low-income Americans benefited the most.
Since 2015, real wages for the low-income class have increased by 19%, while the increase for the rich class was 11%.
This increase not only reduces economic inequality but also proves that the American economy has strengthened the lower class in particular.
Although inflation is still around 3%, the rapid growth of wages has largely reduced its impact.
Then why the fear? Three big reasons
1) Decrease in employment opportunities
Job openings in the United States have been gradually decreasing for two consecutive years.
Although the pace is not alarming, economic history shows that:
“Jobs are created slowly and disappear quickly.”
That is why the Federal Reserve has consistently cut interest rates in recent meetings in order to prevent a possible economic slowdown in advance.
2) Increase in company layoffs
2025 saw an increase in layoff announcements.
Examples:
• Amazon: Announcement of 14 thousand employees
• Verizon: Layoffs of thousands of employees
• Challenger, Gray & Christmas: The largest increase in layoffs (since inflation)
According to a report:
“More than 1.1 million layoffs have been announced so far in 2025, which is 65% more than in 2024.”
(Source: Sahm Capital, Aaj TV, Business Insider)
3) The worst confidence of the American public
According to a survey by the New York Fed:
• Only 50% of Americans hope that if they lose their job, they can find a new job within 3 months.
• This rate is even lower than during the worst period of Corona.
This fear is more a result of psychological turmoil than economic reality.
Are these concerns justified? Experts’ opinion
✔ Unemployment still low
The 4.4% unemployment rate is still low by U.S. historical standards.
About 75% of the time since 1948, unemployment has been higher.
✔ Prime-age employment rate at highest level
The employment rate for people aged 25 to 54 is near 80%—a record high.
✔ Government unemployment claims down
If mass layoffs were happening, claims would have increased immediately. But they didn’t.
✔ The U.S. economy is still growing.
According to the Federal Reserve’s “Nowcast” report:
“U.S. GDP growth in the third quarter could be historically high.”
✔ Stock markets, corporate debt markets, and commodity markets
All trend toward economic stability—not a crisis.
AI: Fear, Reality, and the War of the Future
AI is currently being portrayed as the biggest threat to jobs in the US, but the reality is more complex.
There are two types of AI:
1. Automation AI → Eliminates low-skilled jobs
2. Augmentation AI → Increases the productivity and income of skilled workers
According to a new MIT study:
“AI could completely replace only 12% of US jobs right now, but not all sectors will be affected equally.”
(TechRadar report)
ArXiv study:
“AI affects low-skilled workers, but new opportunities are emerging in high-skilled sectors.”
Political uncertainty—especially the “Trump factor”
The biggest economic uncertainty factors in 2025 were:
• Donald Trump’s tariff policy
• Visa rules
• Immigration laws
• Mass deportations
That’s why companies had to hold off on hiring as a precaution.
But now this uncertainty is easing somewhat, with signs of an improving labor market.
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