In a private memo obtained by The Intercept, a Bank of America executive stated that “we hope” working Americans will lose leverage in the labor market.
The memo also noted that changes in the percentage of Americans seeking jobs “should help push up the unemployment rate.”
Ethan Harris, the head of global economics research for the corporation’s investment banking arm, Bank of America Securities, wrote the “Mid-year review.”
It stated: “By the end of next year, we hope the ratio of job openings to unemployed is down to the more normal highs of the last business cycle.”
USA – Bank of America leaked memo “We hope” conditions will get worse for US workers and “should help drive the unemployment rate up.”
— Elander & the News (@ElanderNews) July 30, 2022
The Federal Reserve works for banks, not the people. Change my mind…
Bank of America memo: “We hope” conditions will get worse for US workers https://t.co/GNnC4Blohj
— Patty Smith (@Solutions2Work) August 1, 2022
The Intercept wrote:
The memo comes amid a push by the Federal Reserve to “cool down” the economy, informed by much of the same rationale — that high wages are driving inflation. This year, the Fed has increased interest rates for the first time since 2018. Historically, this has often caused recessions, and that is exactly what appears to be happening now: The Commerce Department reported Thursday that the gross domestic product has fallen for the second quarter in a row, indicating that a recession may have already begun.
Parts of the mid-year review, in particular its emphasis on a looming recession, received press coverage at the time of the memo’s release to clients. This is the first publication of the document in full.
What the memo calls “the ratio of job openings to unemployed” is generally calculated the other way around — i.e., the ratio of unemployed people to job openings. The more widely used ratio offers one measurement of the balance of power between workers and employers. The lower this number, the more options unemployed people have when searching for work and the greater opportunities employed people have to switch to jobs with better pay and conditions. According to the Bureau of Labor Statistics, this ratio stood at 0.5 as of May, meaning that there were then two job openings per unemployed person.
Although it’s clear the U.S. economy has entered recession, Democrats have scrambled to redefine ‘recession’ in recent weeks.
Read the full Bank of America memo HERE.