Mass layoffs are not limited to the Big Tech industry.
Former Walmart CEO Bill Simon appeared on “Fox & Friends Weekend” on Sunday to warn Americans about the negative impact corporate layoffs could have on the U.S. economy.
“It’s a madhouse right now. This cycle of wage inflation, product inflation, and cost inflation is perpetual. Furthermore, this cycle continues. And I believe that some of the upcoming layoffs are an unavoidable consequence of the Federal Reserve’s actions, as well as the necessary medicine we must administer to cool things down and rein in inflation,” Simon told co-host Will Cain.
Although the job market is robust and one of the economy’s few bright spots, there are indications that it is beginning to weaken. In addition to a handful of high-profile layoffs in the IT sector throughout the last month, the economy added 223,000 jobs in December, the weakest increase in two years.
Federal Reserve officials expect the unemployment rate to rise as a result of their vigorous push to raise interest rates. The most recent predictions from the December meeting of the central bank indicate that authorities anticipate the unemployment rate to grow to 4.6% by the end of the year, up from the present figure of 3.5%.
Cain stated emphatically that unemployment “must occur” in order to effectively combat inflation, prompting him to ask the former president of Walmart if he believes that layoffs delay the nation’s economic recovery.
“Theoretically speaking, I concur with Will. The problem, though, is that wage inflation is occurring concurrently. For example, Walmart stated this week that they are increasing their minimum pay to $14 per hour. That’s an increase of 17%,” Simon responded.
“Food prices have increased by 23% during the past two years. Now, earnings have increased by 17 percent at Walmart, 25 percent at Delta for pilots, and 25 percent in the rail business. And pay rises of this nature counteract the layoffs that are beginning to occur. Thus, there is a great deal occurring.”
The former president of Walmart proceeded, highlighting a specific burden that the U.S. immigration issue has put on the workforce.
“We need people, but they must be authorized to work in the United States. Currently, you are admitting individuals who cannot engage in the workforce, but who raise demand. Therefore, growing demand is driving up costs in the absence of sufficient labor. Therefore, it is a complex factor. Certain inputs are attempting to combat inflation, but there are counteracting forces that sabotage these efforts,” he explained.
Simon further cautioned that consumers could be in a “world of hurt” if the Biden administration did not act quickly to address the nation’s inflation problem.
“I believe the most important thing that will occur in 2023 is that we must bring inflation under control. Simon stated, “Another year of high single-digit to low double-digit inflation will leave us in a world of hurt, as inflation affects the entire population.”