Street Talk: Trade war casualties
As U.S. job cuts rise year over year, one firm is looking in the direction of the White House.
Global outplacement firm Challenger, Gray & Christmas released a report July 5 that shows the number of job cuts reported by U.S. employers rose 18 percent, from 31,517 in May to 37,202 in June.
Challenger’s leadership said the trend can be partially attributed to President Donald Trump’s recently enacted tariffs on foreign imports — which especially impacts consumer products manufacturers.
Last month’s total job cuts were up 19.6 percent from the 31,105 announced in the same month last year.
“In a tight labor market, it’s no surprise employers are hanging on to their current workforces, as four months of this year have seen job cut totals under 40,000,” said John Challenger, CEO of Challenger, Gray & Christmas.
“However, in the wake of announced tariffs, we may be entering a period of increased cuts going forward.”
The second quarter saw 25.3 percent fewer cuts than the previous quarter. Employers announced 140,379 cuts in the first quarter compared to 104,800 in Q2. Second-quarter cuts are up 4 percent from the 100,799 announced in the second quarter of 2017. On average, employers announce fewer cuts in the second quarter.
Despite the quarterly drop, employers have announced 245,179 cuts through June, 8 percent more than the 227,000 cuts announced through June of last year.
Retailers continue to lead in job cuts, with 73,066 announced so far this year, 16,540 of which were announced in the second quarter. That is a 77.4 percent drop. So far this year, Challenger has tracked nearly 2,600 announced store closures.
“Cuts at retailers are considerably lower in the second quarter than in the first,” Challenger said. “While the pivot in retail is still causing a spate of store closures, retailers are finding other positions for their current workforces, as new technology enhancing the customer experience is implemented. Some retailers are already announcing hiring for the holiday season in order to have staff up to speed by peak shopping periods.”
Kohl’s announced it will begin hiring at 300 stores for the holidays, although a total figure and locations were not announced.
“Consumers are confident in the current economy, which may translate to higher consumer spending, especially by the holidays,” Challenger said.
“However, global trade fears and slow wage growth may hinder some of this optimism.”
The Trump administration’s tariffs on steel already have begun to cost jobs. Challenger tracked 60 job cuts specifically due to steel tariffs in June.
“This figure could increase in the third quarter, as companies that import steel grapple with increased costs,” Challenger said.
Meanwhile, consumer products manufacturers, also impacted by a potential trade war, have announced 18,417 cuts so far this year, a 296.9 percent increase from the 4,640 cuts announced through the same period last year.
Health care companies, impacted by uncertainty surrounding the future of the Affordable Care Act, announced the second-highest number of job cuts this year, with 26,198, while companies in the services sector announced 22,628.
Large-scale hiring announcements have slowed significantly compared to the same period last year. So far this year, Challenger has tracked 233,575 new hires, down 50 percent from the 468,351 tracked through the first six months of last year.
A multiyear strategic partnership has been put in place to drive current and long-term economic growth in Oceana County.
Grand Rapids-based economic development organization The Right Place and the Oceana County Economic Development Corporation signed a three-year partnership agreement.
“We look forward to this new multiyear partnership with Oceana County,” said Birgit Klohs, president and CEO of The Right Place. “We see Oceana County and the larger region as an area with great potential for economic growth and believe this collaborative effort will be a positive step for the county and its residents.”
Under the terms agreement, The Right Place will support the county’s economic development efforts by providing comprehensive business retention, expansion and attraction services.
The Right Place also will assist the county with marketing and communications as a means of attracting new businesses.
“For over 30 years, we’ve seen The Right Place use its economic development knowledge to strengthen West Michigan’s economy,” said Eric Fox, OCEDC chair. “This partnership will allow us to better serve current and prospective businesses in Oceana County, as we’ll now be able to leverage Right Place programs and services to their benefit.”
The Right Place is seeking a business development coordinator to fulfill the contract services. The individual will work closely with the OCEDC and other area organizations as they identify and pursue economic growth opportunities.
The agreement will take effect as soon as a business development coordinator has been selected for the position. At that point, work will begin to identify areas where The Right Place can add value, whether it is for workforce development, manufacturing training, business retention or other regional needs.
“This partnership has brought about an exciting time for Oceana County and its businesses,” Fox said. “We’re ready for this new stage of economic development in our community and believe the years ahead will hold many great opportunities for our region.”
Gov. Rick Snyder announced recently that Michigan Office for New Americans (MONA) Director Bing Goei is retiring from service in state government. Snyder also announced that Karen Phillippi, MONA deputy director, was named interim director of the agency.
Goei was appointed MONA director in January 2014 when the governor created the office to help propel and diversify Michigan’s comeback by attracting and retaining highly skilled immigrants. The office directs immigrant integration initiatives for the state and partners closely with refugee resettlement agencies, economic development organizations, ethnic service providers, universities, the state’s various ethnic commissions and many other organizations.
“Bing has been a leading force in bringing talented workers to Michigan and launching creative initiatives that allow immigrants to build on their chosen professions,” Snyder said. “Under his direction, the office has built permanent connections to our diverse immigrant communities and captured the entrepreneurial spirit of new Americans to help in our economic comeback. I thank him for his dedication to state service.”
Phillippi has served as MONA deputy director since March 2014, previously serving as the immigration business services manager at Miller Canfield. She has worked in the field of immigration law and immigrant integration for 26 years.
“Karen has dedicated her career to working with immigrant communities and incorporating the heritage of so many diverse cultures into the rich fabric of our state. I’m confident she will continue the great work Bing has done over the past four years,” Snyder said.
Since MONA’s inception, the state agency has created and implemented many resources for Michigan’s new Americans, including the Michigan International Talent Solutions, skilled and professional licensing guides and English as a Second Language programs.
“Serving the residents of Michigan has been an honor and I would like to thank Gov. Snyder for his relentless support of our effort to make Michigan the most welcoming state for new Americans,” Goei said. “MONA’s initiatives and strong partnerships with immigrant groups will continue to attract global talent to our state.”