What Do Workers Want? To Leave the Past Behind

Employer flexibility is crucial. But workers want full-time jobs, not gigs. They expect their pay to rise. And their mental health is also a priority. Most importantly, career development is top of mind.

Those are just some of the findings of a study released Wednesday by ADP Research Institute, which tracks worker sentiment worldwide. Even with the COVID-19 pandemic lingering, workers all over the world seem less concerned about contending with present challenges and are most focused on what’s next.

“While flexibility and mental health are still recurrent — and I think permanent fixtures in the workplace — what is dominating this year’s report is career progression,” says Nela Richardson, ADP Research Institute’s chief economist.

The study, “People at Work 2023: A Global Workforce View,” found that workers still care most about salary and job security, but they care a little less about both of those than they did last year. Career progression was the standout, with 40% of workers saying it matters most in a job, compared to 23% in the previous year. Training and development also saw an uptick as an important factor in a job, increasing from 18% in the 2022 report to 23% this year. Enjoyment at work was another factor that saw an increase from 32% in 2022 to 37% in 2023.

“Workers now have their eye on the ball, on the ball of the next phase of their career,” says Richardson. “We’ve gotten through that shock of the pandemic when people were just trying to grapple with this new world of work. Things have stabilized quite a bit, and now it looks like the global workforce has turned the corner … and is looking at ‘how do I progress my career?’”

ADP surveyed more than 32,000 workers in 17 countries to find out employees’ attitudes toward work. Here are some of other key trends.

Most workers expect salary increases

Worldwide, the majority of all workers expect their salaries to increase in the next 12 months.

A majority of U.S. workers (75%) say they expect their salary to increase over the next 12 months. The average expected increase over the next year is slightly higher at 6.7% than the average of actual increases in 2022, which was 6.5%.

It’s not surprising for workers to expect a pay increase forthcoming since the majority of workers worldwide (62%) received an increase in pay over the previous year. The rises in 2022 averaged 6.4% — under the International Monetary Fund’s global inflation forecast of 8.8%, which means, in real terms, workers received a slight pay cut.

But Richardson says the wage increase staying below inflation is evidence that a wage-price spiral is not at hand. A wage-price spiral happens when wages and inflation feed each other to the point where inflation rises out of control.

“People reported getting and expecting about the same amount of growth in their paychecks this year, and that is pretty much in line with the inflation amounts that we’re seeing,” says Richardson. “We’re not looking at people thinking 3% or 2% [increases], as was the norm before the pandemic — it’s now 6%.”

Getting paid on time isn’t a given

More than 4 in 10 survey respondents say they’re “always, often or sometimes” underpaid, the survey data shows. And about one-third say they regularly experience other inaccuracies in payment such as a failed payment. Most workers (71%) are able to track the pay information online so they can keep tabs of whether they are being paid correctly.

Receiving incorrect or late payments is a global issue that hits lower-paid workers the most, says Richardson, and it can have damaging effects on their finances.

“It’s really important to get paid on time,” she says. “They may not have the liquidity, the funds to even go a few days without a paycheck.”

Gig work holds little attraction

Workers are less likely to trade their full-time jobs for the flexibility of gig work. That’s because the alternative arrangements born out of the pandemic, such as remote and hybrid office-remote work, have stuck around. Workers who want flexibility can find it.

A third of workers in the U.S. say they have complete flexibility, while 27% say they have some flexibility between the workplace and home, according to the report. About 37% still say they are in the workplace every day.

“One thing that the gig economy doesn’t match as well as is job security, which we know is important,” says Richardson, adding that, as a result of more flexible work arrangements, they are no longer boxed into their immediate area.

“That changes the game,” she says, adding that flexibility has broadened the definition of what traditional employment is.

Looking ahead, nearly one-third of workers say they believe remote work will become the norm in their industry. And 28% say their job will likely transition from a five-day workweek to four-day.

Workers are still stressed, especially in the U.S.

Stress in North America is the highest among any region, and yet workers are least likely to say stress adversely affects their work, the ADP report shows. There was a similar finding in Australia.

Richardson chalks it up to a return to cultural norms. “I think the type of stress that U.S. workers are confronted with might be part of it,” she says. “It’s frequent. North America seems to lead the world in terms of the amount of stress that they’re experiencing.”

A majority of U.S. workers (58%) say they feel comfortable talking about mental health at work. But workplaces in other countries are even more open about mental health such as Brazil (63%); China (65%); and India (71%).

“There has been this shift in openness, in talking about mental health and, really, in employers being more sensitive to mental health, and offering employees over the course of the pandemic more resources,” says Richardson. Now that things are normalizing, we still want to keep the accessibility.”

Overall, workers are optimistic

Despite years of living through a pandemic and a looming global recession, labor markets have remained tight and workers are reporting high optimism about the future. A whopping 90% of workers, globally, say they’re satisfied with their jobs, the ADP report found.

Looking into the next year, workers around the world expect pay raises (62%); promotions (44%); bonuses (41%); increased skills training (40%); and increased responsibility (31%).

With the ravages of the pandemic largely over, it’s time for workers to reposition, says Richardson. “You can see in this survey a lot of ‘look toward the future’ [sentiment] and not just being stuck in the drama and the issues that people were dealing with in the present.”

Anna Helhoski writes for NerdWallet.

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Collapse of SVB, Signature Bank: What You Need to Know

Two banks have collapsed since Friday, the federal government swooped in to save the day, and there’s still a lot of uncertainty about what comes next.

Depositors at Silicon Valley Bank — which failed Friday after a bank run — and New York-based Signature Bank — which collapsed Sunday — will see their money guaranteed by the federal government. In a joint statement Sunday, the U.S. Treasury Department, the Federal Reserve and the Federal Deposit Insurance Corp. said all deposits at both banks would be guaranteed — but not at the expense of taxpayers. Depositors were told they would have access to their money Monday. The move was an attempt to alleviate systemic risk to the banking system and shore up public confidence, according to the statement. In other words, the federal government hoped to ward off the potential for a contagion of collapses that could destabilize the banking system and cause an economic crisis akin to the Great Recession, in late 2007 to mid-2009. Since 2001, there have been 563 bank failures, according to the FDIC, but these are the first since Kansas-based Almena State Bank in October 2020. SVB and Signature Bank’s collapses were the second and third largest in history, with Washington Mutual — which fell during the 2008 financial crisis — still No. 1. The markets responded to SVB’s collapse with a swift decline Friday. On Monday morning, after the Fed’s joint announcement, markets were jittery, indicating high volatility in an uncertain financial climate. Bank stocks, especially regional bank stocks, have plunged.

How SVB and Signature Bank Collapsed

In the joint news release, the Fed said: “The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry.” But not all reforms have stuck. In 2018, under then-President Donald Trump, Congress rolled back Dodd-Frank Act regulations for regional banks with under $250 billion in assets. At the time of its failure, SVB had $209 billion, according to the FDIC. Senate Banking Committee Chair Elizabeth Warren, D-Mass., cited the rollbacks as a contributor to SVB’s collapse, saying the decision reduced “both oversight and capital requirements.” So how did it happen? The simplest answer is a bank run, which happens when depositors withdraw their money simultaneously out of fear of insolvency. On Wednesday, CEO Greg Becker sent a letter to shareholders telling them that SVB had lost $1.8 billion on the sale of U.S. Treasurys and mortgage-backed securities. Becker indicated the bank planned to raise $2.25 billion to bolster its finances. This announcement sparked a panic among its customers, who collectively withdrew $42 billion from their accounts Thursday. By Friday morning, SVB had a negative cash balance of $958 million. The FDIC said it had taken over SVB and established the new Deposit Insurance National Bank of Santa Clara. (Disclosure: NerdWallet also banked with SVB before its closure.) Then on Sunday, New York state regulators closed Signature Bank, a lender primarily serving real estate and law firms that recently started focusing on the cryptocurrency industry. A similar bank run happened at Signature. The FDIC took over the same day and established a new Signature Bridge Bank N.A. Without government intervention, the collapse of SVB could have been catastrophic for depositors with large accounts. Deposits are FDIC-insured only up to $250,000 regardless of whether the account was individual or corporate. More than 90% of SVB’s deposits were not insured by the FDIC, according to a Bloomberg analysis of recent regulatory filings. SVB was known as the bank of choice for startups, venture capitalists and tech companies. Its collapse Friday raised questions for some companies about whether they would be able to meet payroll.

Was this a bailout?

Calling this a bailout or not is semantics. Either way, the federal government wants to make sure you know that the burden is not falling on taxpayers. In the joint announcement, the trio of government agencies indicated the Deposit Insurance Fund would cover the money in depositor’s accounts. The Deposit Insurance Fund is funded through fees assessed on financial institutions as well as interest on government bonds. President Joe Biden, in a televised address Monday morning, repeated this sentiment: “No losses will be — and I want — this is an important point — no losses will be borne by the taxpayers. Let me repeat that: No losses will be borne by the taxpayers.” The Federal Reserve Board also announced it will make additional sources of liquidity through the creation of a fund that would safeguard deposits. The new Bank Term Funding Program will offer loans of up to one year to banks, savings, associations, credit unions and other eligible depository institutions that pledge U.S. Treasuries, agency debt and mortgage-backed securities as collateral. The program will have an initial $25 billion available made possible by the Exchange Stabilization Fund.

Will the Fed still raise interest rates?

The bank failures may soften the Fed’s stance on interest rates. The hawkish tenor of Fed Chair Jerome Powell, in his Senate testimony last week and with the February rate hike, indicated a 50-basis-point increase was likely for the March rate decision. But the SVB and Signature failures have clouded that outlook. In a widely reported analysis of the failures, Goldman Sachs said it no longer expects the Fed to deliver any rate hike at the March 22 meeting, adding they had “considerable uncertainty about the path beyond March.” Michael Feroli, chief U.S. economist at JPMorgan Chase & Co., was widely reported saying he expects a 25-basis-point hike at next week’s meeting. As of Monday, the CME FedWatch Tool indicated the probability of an increase next week is between no hike and a 25-basis-point hike.

What happens next?

On Monday, Biden’s message aimed to assure Americans of the safety and strength of the U.S. banking system. He indicated management of these failed banks would be fired and investors in those banks would not be protected, and he called for a full account of how these failures happened. Finally, he called on Congress and banking regulators to strengthen the rules for banks to lessen the chances of additional failures. The FDIC will facilitate buyers for SVB and Signature Bank. It will also sell off SVB’s assets to be used for future disposition.

CPI Report: Inflation Was Slightly Less Terrible in November

Goods and services are getting less expensive in response to the Federal Reserve’s persistent increases in interest rates. But prices are still higher than they were a year ago.

Consumer prices are up 7.1% year-over-year as of November 2022, according to Tuesday’s Consumer Price Index report from the Bureau of Labor Statistics. The Consumer Price Index tracks the impact of inflation through the change in average prices that consumers pay for goods and services, such as groceries and gas. Tuesday’s report showed the smallest year-over-year increase in the index for any previous month since December 2021.

Month-to-month, consumer prices rose 0.1% from October to November, a lower increase compared with the 0.4% change from September to October, BLS data show.

The shelter index, which has risen 0.6% since October, was the most significant contributor to overall price increases. Food prices are up, too. Both groceries and restaurant food increased by 0.5% month-over-month. Food, overall, is up 10.6% compared with the previous year, not seasonally adjusted.

But there’s good news, too: Energy prices are going down (-1.6%) compared with the previous month when energy costs rose (+1.8%). Those decreases in energy include gasoline (-2.0%), electricity (-0.2%) and utility gas services (-3.5%).

Here’s what changed:

Note: All month-to-month changes are seasonally adjusted, but year-over-year changes are unadjusted, per the CPI report.


September to October: +0.6%.

October to November: +0.5%.

November 2021 to November 2022: +10.6%.


September to October: +0.8%.

October to November: +0.6%.

November 2021 to November 2022: +7.1%.

Energy (fuel, utilities):

September to October: +1.8%.

October to November: -1.6%.

November 2021 to November 2022: +13.1%.

Medical care services:

September to October: -0.6%.

October to November: -0.7%.

November 2021 to November 2022: +4.4%.

Transportation services (insurance, airfare, etc.):

September to October: +0.8%.

October to November: -0.1%.

November 2021 to November 2022: +14.2.

New vehicles:

September to October: +0.4%.

October to November: No change.

November 2021 to November 2022: +7.2%.

Used cars and trucks:

September to October: -2.4%.

October to November: -2.9%.

November 2021 to November 2022: -3.3%.


September to October: -0.7%.

October to November: +0.2%.

November 2021 to November 2022: +3.6%.


The Federal Reserve Board, working on taming inflation, is meeting this week and is expected to announce another interest rate hike on Wednesday for seven increases in 2022. However, the upcoming rate increase is largely expected to be lower than the four prior 0.75 percentage point increases.

Anna Helhoski writes for NerdWallet.

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Great, Inflation Is Ruining Thanksgiving Dinner, Too

This Thanksgiving, it’s not just the pandemic or post-election political tensions threatening to ruin your family dinner — it’s also inflation. Oh, and the ongoing avian flu that has killed more than 7 million turkeys nationwide this year.

The American Farm Bureau Federation, which tracks food prices, said in a news release that consumers could face record high prices for Thanksgiving meals this year.

Food prices in general have been increasing: The index for groceries — which represents changes in consumer prices — was up 12.4% over a one-year period as of October 2022, according to the latest Consumer Price Index data from the Bureau of Labor Statistics. While the data show price increases for food and other goods are starting to slow down, consumers can still expect high prices this Thanksgiving.

As with all price jumps, some consumers will have a more difficult time handling the higher costs than others. “These are very high price increases, but they’re really impacting low-income families the most,” says David Ortega, associate professor in the department of agricultural, food and resource economics at Michigan State University.

Meanwhile, higher-income consumers who padded their savings during the early days of the pandemic have been increasing their spending on food. The rising demand from those consumers has elevated prices at the supermarket, Ortega says.

In other words, there are lots of reasons why you’ll pay more to get food on the table this year.

Turkeys are available but pricier

The star of the meal is traditionally the humble turkey. You may see turkeys for sale that are smaller than usual, because commercial farms impacted by the highly virulent HPAI, or avian flu, are bringing younger turkeys to market, according to the Farm Bureau. (It’s worth noting in this era of virus awareness that HPAI does not usually affect humans, according to the Centers for Disease Control and Prevention.)

Despite the avian flu, there’s no shortage of turkeys, according to Beth Breeding, vice president of communications and marketing for the National Turkey Federation.

“If a shopper is looking for a turkey, they’re going to be able to find one this Thanksgiving,” Breeding says. “We have no concerns about that whatsoever.”

But those turkeys will be more expensive than usual, partially due to the effects of the avian flu, but primarily because of higher supply costs for feed, fuel, fertilizer and labor. Overall production costs have increased by nearly 18% from 2021 to 2022, according to U.S. Department of Agriculture data.

In September, the highest retail prices for boneless, skinless turkey breast hit a record of $6.70 per pound, which is 112% higher than at the same time in the previous year, according to the Farm Bureau. The price is well above the previous record high of $5.88 per pound in November 2015, during another avian flu outbreak.

Keep in mind that the average price of whole turkeys is lower than those record highs, and cost varies by region and type. The average cost of a whole young fresh turkey ranges from $1.80 to $2.17 per pound, according to the USDA’s weekly turkey report for Nov. 11. Frozen turkeys are typically cheaper than fresh, and hens are less expensive than toms.

“There’s no doubt that things are going to cost more this holiday — that the whole meal will cost more — but there are still really good deals available on turkey and as far as value,” Breeding says.

Ortega recommends that consumers shop around since supermarkets will offer promotions and deals to get customers in the door.

You’ll lay down more green for veggies

As you might expect, you’ll pay more for corn, green beans, potatoes and squashes this year than in the past. The Consumer Price Index shows a 9.2% year-over-year increase in the index for fresh vegetables — representing price changes — as of September 2022.

Many variables are raising prices, including supply-chain snags, high transportation costs and climate events impacting agriculture.

Domestically and abroad, climate changes have affected agriculture, Ortega says. California, for example, is the No. 1 state for agricultural production, according to the USDA. But drought and extreme heat have made it more difficult for crops to survive there, Ortega says.

Weather changes impact production, yields and productivity, he says, and those effects increase the price of food. The industry also has higher energy and transportation costs due to high oil and gas prices.

The wheat supply chain is still strained

Higher costs of wheat will impact the cost of a crucial ingredient for Thanksgiving meal staples like rolls, stuffing and pie crust: flour.

The cost-per-pound of flour has risen 35% year-over-year as of October 2022, according to data from the Federal Reserve Bank of St. Louis.

As with vegetables, compounding factors are increasing price, Ortega says. Wheat costs have also been affected by the war in Ukraine, which is known as the breadbasket of Europe for good reason: It’s a major supplier of grain, wheat and sunflower oil for the world. When combined with Russia, the two countries produce 13% of the world’s grain, according to Our World in Data, a project of the University of Oxford and the Global Change Data Lab.

For most of the year, Russia prevented all exports of grain out of the Black Sea, until the United Nations brokered a grain deal that allowed exports to resume. That deal is set to expire in March 2023.

“Those commodity prices have come down substantially since, but it takes time for these decreased costs to make their way down to the grocery store,” Ortega says.

Don’t forget higher dairy prices, too

Butter, cream, milk and other dairy products that are central to cooking a traditional Thanksgiving meal are also expected to remain more expensive this year, according to BLS data.

Finally, to top off your dessert, the price of canned whipped cream canisters has long been elevated due to a yearslong nitrous oxide shortage. This year it’s been made worse by the conflict in Ukraine. Why? Ammonium nitrate and natural gas are refined to create nitrous oxide, both of which are heavily produced in Russia and Ukraine.

Even with higher-than-usual prices in every aisle, comparison shopping can still help — if you have the fortitude to balance it and make a Thanksgiving dinner. If all else fails, it could be cheaper to call off cooking and eat out instead.

Credit Card Debt Is Making a Comeback

Credit card debt took a nosedive in the early days of the pandemic in 2020 as consumers stayed home, lost work and received cash infusions from the government.

Two years later, it’s back.

Credit card debt increased 15% year over year — the largest one-year increase in more than two decades, according to the Federal Reserve Bank of New York’s quarterly report on household debt and credit released today. Its total of $930 billion is near pre-pandemic levels.

The report found one group of consumers has surpassed its debt average since December 2019, before the pandemic: those in the lowest income areas. Meanwhile, consumers who live in high-income areas have average balances that are $300 lower than in December 2019.

Credit card debt has been rising all year, according to the New York Fed, and its researchers chalk up the increases to a few possibilities:

  • Consumers are no longer putting off “services” purchases like vacations and travel.
  • Higher prices of goods and services because of inflation.
  • People aren’t slowing consumption of goods and services despite inflation.

New York Fed researchers say they expect to see credit card debt increase as it usually does heading into the holidays.

Debt is up, but delinquencies are down

Debt is higher than pre-pandemic levels, according to the New York Fed’s report. It increased by $351 billion, or 2.2%, in the third quarter of 2022 and now sits $2.36 trillion higher than at the end of 2019.

That’s good news for lenders and less of a celebration for consumers. What consumers can rally around is a lack of a significant uptick in delinquencies, which remain below historical trends, the report found. Researchers at the New York Fed largely chalk that up to excess savings still bolstering some borrowers. The percentage of consumers with debt in collections still remains lower than pre-pandemic levels.

Here’s what’s happening with other types of debt, according to the New York Fed’s findings:

  • Mortgages make up 71% of all outstanding household debt balances compared with 69% in 2019. New York Fed researchers say the refinancing boom in housing is over because of increasing interest rates, and what is left are purchases. New mortgage originations have slowed to pre-pandemic levels. Total mortgage debt is $11.67 trillion.
  • Student loans — the majority of which are federal loans that have been paused since March 2020 — saw slight balance declines likely due to discharges through existing loan forgiveness programs such as Public Service Loan Forgiveness. The pause is expected to lift next year. Total student debt stands at $1.57 trillion.
  • Auto loan balances continued to increase in the third quarter on a consistent 11-year upward trend, but the number of originations (i.e., cars being bought) has decreased since the previous quarter. New York Fed researchers say those who may be struggling likely bought a car recently, and the price would have been inflated compared with that of past years. Younger borrowers, ages 18 to 29, are struggling most with auto loan payments. Total auto loan debt is $1.52 trillion.
  • Home equity line of credit, or HELOC, balances increased for the second consecutive quarter after years of decline. Total HELOC debt is $322 billion.

Anna Helhoski writes for NerdWallet.

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Job Market Still Strong Despite Slight Rise in Unemployment

A slight uptick in unemployment in October is the one blemish on an otherwise strong employment picture for workers, according to data released by the Bureau of Labor Statistics on Friday.

A significant number of jobs were gained in October and wages remain up overall. And hiring was stronger in industries that previously lacked growth, including health care and manufacturing.

Investors reacted positively to the report, with the S&P 500 rising more than 1% immediately after its release.

Here’s what workers need to know about the latest jobs numbers:

  • The economy added 261,000 new jobs in October, a slight decline in gains compared with September (263,000 new jobs).
  • The unemployment rate rose to 3.7% — a 0.2 percentage point increase from September. The total number of unemployed rose by 306,000 from the previous month. The unemployment rate has remained relatively stable, fluctuating between 3.5% and 3.7% since April.
  • The labor force participation rate barely budged since last month: 62.2% in October compared with 62.3% in September. The labor force participation rate shows the percentage of the population that’s working or actively looking for work.

Here are the other key takeaways from the report.

Earnings growth is slowing, but wages remain high. Average hourly earnings increased nearly 0.4% from September to October — a slight increase from the previous month (0.3%). Wages remain about 4% higher than they were a year ago.

Health care gained 53,000 jobs. Throughout 2022, employment in health care increased by 47,000 on average per month, a stark contrast to the 9,000 on average added per month in 2019.

Manufacturing added 32,000 jobs. Manufacturing has seen an increase of 37,000 on average per month in 2022, a notable increase compared with 30,000 per month in 2021.

Leisure and hospitality shows growth but still lags. An additional 35,000 jobs were added to the leisure and hospitality sector.

Is the job market still thriving?

Two key indicators, job openings and quit rate, show that job seekers still have opportunities across fields. Also, there were few changes in layoffs reported among all employment sectors, with the rate changing little from previous months.

Another report released earlier this week from the Bureau of Labor Statistics — the Job Openings and Labor Turnover Summary, or JOLTS — showed job openings remained strong, rising to 10.7 million in September after a one-month blip in August when openings dropped by more than 1 million. The most significant increases in job openings were found in accommodation; food services; health care and social assistance; and transportation, warehousing and utilities. On the other hand, job openings are starting to decrease in wholesale trade as well as finance and insurance.

The JOLTS report also showed the quit rate remained steady at 2.7% for the third straight month, which economists say is a critical factor in the health of employment prospects since quitting shows that workers feel safe making a job switch.

Quit rates increased in state and local government jobs, which shows there may be more movement among workers in this sector. However, the inverse is likely true in three industries where quit rates decreased: construction; transportation, warehousing and utilities; and durable goods manufacturing.

Wages are also firmly in workers’ favor: In another report released on Oct. 28, the Bureau of Labor Statistics found that wages and salaries increased 5.1% over a one-year period ending in September 2022. In the year before that, ending September 2021, wages and salaries increased by 4.2%.

While the overall employment picture looks rosy, multiple forecasts predict job losses in 2023. In September, the Federal Reserve projected unemployment would reach 4.4% next year. Bank of America, meanwhile, projects an even higher unemployment rate of 5.5%.

The Federal Open Market Committee raised its federal funds rate again this week to bring down inflation, which is expected to eventually lead to a higher unemployment rate.

Employment prospects in your field

Workers wondering if it’s time to make a move might want to consider what’s happening with employment in their industry. Here’s what you need to know, based on Bureau of Labor Statistics data over time:


Employed in October: 7.7 million.

% change since September: +0.01%.

% change since February 2020: +0.98%.

Education services

Employed in October: 3.9 million.

% change since September: +0.22%.

% change since February 2020: +0.55%.

Financial activities

Employed in October: 9 million.

% change since September: +0.03%.

% change since February 2020: +1.37%.


Employed in October: 22.4 million.

% change since September: +0.13%.

% change since February 2020: -1.87%.

Health care and social assistance

Employed in October: 20.9 million.

% change since September: +0.34%.

% change since February 2020: +0.58%.


Employed in October: 3 million.

% change since September: +0.13%.

% change since February 2020: +5%.

Leisure and hospitality

Employed in October: 15.9 million.

% change since September: +0.22%.

% change since February 2020: -5.85%.


Employed in October: 12.9 million.

% change since September: +0.25%.

% change since February 2020: +0.47%.

Mining and logging

Employed in October: 634,000.

% change since September: No change.

% change since February 2020: -11.58%.

Professional and business services

Employed in October: 22.5 million.

% change since September: +0.17%.

% change since February 2020: +4.28%.

Retail trade

Employed in October: 15.8 million.

% change since September: +0.05%.

% change since February 2020: +1.08%.

Transportation and warehousing

Employed in October: 6.5 million.

% change since September: +0.13%.

% change since February 2020: +14.87%.

Wholesale trade

Employed in October: 5.9 million.

% change since September: +0.25%.

% change since February 2020: -0.22%.

Anna Helhoski writes for NerdWallet.

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Lawsuit Stalls Student Debt Relief: What Now?

The 8th U.S. Circuit Court of Appeals has granted an emergency stay pending the appeal of a lawsuit seeking to delay the scheduled rollout of the Biden administration’s promised student debt relief.

In other words, borrowers hoping to see $10,000 or $20,000 wiped from their debts will have to wait while this lawsuit proceeds; hearings are already scheduled for next week. There are also four other lawsuits pending appeal or awaiting hearing.

The stay is no reason to panic, says Mike Pierce, director and co-founder of the Student Borrower Protection Center. It’s procedural. The court cannot make a ruling, says Pierce, when it hasn’t been fully briefed. The stay calls for a response from the Justice Department by Tuesday afternoon.

“There’s not really anything to see here,” says Pierce.

The temporary halt came just days before the first borrowers were expected to see their balances reduced. The White House said earlier this month it would not deliver relief prior to Oct. 23.

On Oct. 21, Biden said 22 million borrowers had already submitted their applications since the form first went live in beta form a week prior. The White House has stated an estimated 40 million borrowers would be eligible for cancellation. The debt relief application is still open.

What does the lawsuit claim?

Six states (Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina) jointly claim Biden’s debt relief would harm tax revenue in their states and the finances of state-based loan agencies. All six of the states are Republican-led.

These student loan servicers and companies manage commercially held FFELP loans, an older type of federal student loan originally funded by private companies. They claim that letting FFELP borrowers consolidate their loans to be eligible for cancellation would hurt their bottom lines because it would eliminate or reduce anticipated interest payments.

In response, the Biden administration in late September reversed cancellation eligibility for borrowers with commercially held FFELP loans.

A federal district judge dismissed the case on Oct. 20; the plaintiffs immediately filed an emergency motion with the 8th U.S. Circuit Court of Appeals for an administrative stay. They asked the court to pause the scheduled rollout of debt cancellation by 9 a.m. CST Saturday, Oct. 22.

The court didn’t wait that long; it approved the administrative stay on Friday.

Where does this leave borrowers?

Borrowers who applied or were waiting for automatic relief are now in limbo. And federal student loan payments are expected to restart in January 2023 after a nearly three-year pause due to the pandemic, unless the pause is extended again.

No additional extension has yet been announced. It’s wisest to proceed as if payments will resume as scheduled on Jan. 1.

If you qualify for debt relief and haven’t applied, do so. It can’t hurt, and you’ll secure your spot in line if legal obstacles are cleared.

If you planned to seek a refund of payments made during the pause, reconsider. You are still able to ask for a refund, but as before, the amount refunded will be added to your loan balance.

If you already received a refund on payments made during the pause, don’t spend it. If one of the lawsuits succeeds, you may want to put it back toward your loan balance.

Anna Helhoski writes for NerdWallet.

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Federal Student Loan Payments on Hold Until 2023 — What Comes Next

Nearly 37 million federal student loan borrowers are getting an additional four months of reprieve from payments. The White House cited the current high inflation rate as the primary reason for extending the pause through Dec. 31.

Wednesday’s announcement was coupled with a much bigger deal: The long-awaited $10,000 in student debt cancellation for borrowers and up to $20,000 for borrowers who also received Pell Grants. It’s only for undergraduate debt and will only be granted to those who meet income requirements: $125,000 maximum as individuals or $250,000 for couples filing their taxes jointly.

There have been seven extensions since the federal student loan payment pause went into effect in March 2020. The reprieve was initiated at the onset of the pandemic as mass unemployment loomed.

Despite the previous extensions making borrowers wary about the news of a restart, expect repayment to resume come January 2023. The White House has explicitly said this would be the last extension.

Here’s what another extension of the payment pause will mean:

  • Borrowers will have had 33 months without having to make a payment.
  • The pause has been interest-free, which means loan principals haven’t grown since it started.
  • Borrowers seeking forgiveness through Public Service Loan Forgiveness and income-driven repayment forgiveness will be 33 months closer to seeing the remainder of their debt canceled.

What the pause has done for borrowers

The pause was initially intended to ease financial pressure on borrowers during the early days of the pandemic.

All of this time without payment has helped borrowers manage their finances. Borrowers didn’t have to pay, on average, $210 per month, according to a March 2022 report from the Federal Reserve Bank of New York. Most borrowers improved their credit standing, and 44% reduced their use of credit cards, according to a March 2022 report from California Policy Lab. Those who did make payments — about 18%, according to the New York Federal Reserve —  potentially lowered their debt faster by taking advantage of 0% interest.

Many borrowers will have had their debt canceled before the restart begins. Since the start of the Biden administration, at least 1.6 million borrowers have received more than $32 billion in student debt discharges through improvements to existing student loan forgiveness programs like Public Service Loan Forgiveness and borrower defense to repayment.

But some borrowers won’t be able to make payments even after forbearance ends; it’s good to explore your repayment options well before then.

Another extension breeds uncertainty

While many federal student loan borrowers have seen their loan balances drop to zero, most borrowers still have debt. After 33 months without payments and logistics to work out around delivering cancellation to borrowers, there’s still a lot of uncertainty.

“We need to wait for guidance,” says Scott Buchanan, executive director of the Student Loan Servicing Alliance, representing government-contracted private student loan servicers. “If you call today asking for details, we have nothing to provide. I encourage borrowers to understand that outreach will occur when it’s time for outreach and until then, there’s nothing they need to do.”

According to several news surveys, borrowers with student debt are already more likely to put off crucial financial choices tied to big life decisions, such as getting married, having a child or buying a home.

This lengthy restart delay could mean some borrowers are continuing to delay making financial decisions until their debt is gone. Others may be making financial choices they can afford — like buying a home — but that might be a stretch to keep up with once payments restart.

In fact, says Buchanan, it’s best not to make any major financial decisions based on a cancellation or an extension.

“There are a lot of details to work through, including an implementation timeline of when cancellation is going to happen or whether it’s going to happen [for you],” says Buchanan. “It’s critical that people don’t choose to buy a more expensive car or do something else premised on getting $10k in loan forgiveness until that actually happens.”

Anna Helhoski writes for NerdWallet.

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Do You Need a Grad Degree to Compete Right Now? Probably Not

More U.S. workers than ever hold a graduate degree. Years of intensifying job requirements and headlines declaring a master’s “the new bachelor’s degree” nudged a record number of students into grad school.

And yet more well-paying jobs no longer require a college degree at all. In this tight labor market, do college grads need a master’s degree to compete? Maybe not.

“We have all reduced our almost obsession with the master’s degree,” says Johnny C. Taylor Jr., CEO and president of the Society for Human Resource Management.

Anecdotal and statistical evidence shows employers were already pulling back degree requirements even before the pandemic: Data from a job market analysis done by the Burning Glass Institute show a reduction in middle-skills and high-skills requirements — jobs that require more education than a high school diploma — from 2017 to 2019.

If fewer employers are requiring grad degrees to gain entrance to good jobs, prospective students should assess whether advanced degrees are worth taking on debt.

Some fields still require advanced degrees

Advanced degrees are still the key to entering certain professions: Medicine, law and teaching come to mind. In other fields, as long as you can convey you have the skills an employer is looking for, you can get a job without an advanced degree, says Brad Hershbein, senior economist and deputy director of research for the W.E. Upjohn Institute for Employment Research in Kalamazoo, Michigan.

Advanced degrees could hedge against a recession

Employers are likely reducing education requirements to fill slots, which can be difficult in a tight labor market like this one, experts say. But that doesn’t mean it will last.

“Nobody can quite explain what we’re going through now; I think everyone thinks it’s temporary,” says Gordon Lafer, a professor in the Labor Education & Research Center at the University of Oregon.

Holding an advanced degree could provide a safeguard for the future. If the economic tide turns, Taylor says, the degree becomes a differentiator.

Advanced degrees tend to correlate with lower unemployment rates compared with bachelor’s or associate degrees. But generally, any degree acts as a buffer against unemployment.

During the Great Recession, those with bachelor’s degrees and higher were more likely to keep their jobs, according to 2014 research by the Georgetown University Center on Education and the Workforce. The same goes for job retention during the early days of the pandemic, according to June 2020 data from The Federal Reserve Bank of San Francisco.

Graduate programs don’t always pay off

What consumers need is data that show program-specific outcomes like graduates’ employment rates and average salaries. These are woefully difficult to find. For example, the College Scorecard, a data tool from the U.S. Department of Education, which provides information on outcomes like graduation rates and post-graduate salaries, doesn’t include graduate-level data by major.

The lack of transparency makes it harder for prospective students to make an informed decision. And that could lead some to end up with debt they’re unable to repay.

“Not everyone realizes there’s a risk that it’s a bad financial investment,” says Hershbein.

Graduate loan debt has reached an all-time high, according to data from the federal government and think tanks like the Center for American Progress and Brookings. Unlike undergraduate loans, which have stricter limits on the amount of debt students can take on annually, federal Grad PLUS and private graduate loans allow students to borrow up to the cost of attendance, so it’s easier to rack up debt.

Your earnings after attaining a grad degree will largely depend on your field and employer. Outcomes in some fields are easier to predict than in others, says Hershbein.

“Teachers’ master’s degrees are carefully calibrated; based on union contracts they know what the pay is going to be,” says Hershbein. But outcomes for master’s in areas like public policy or fine arts are more of an unknown, he adds.

Master’s programs are not all equal

Where you get your degree also matters. “If you’re getting an online master’s degree from the University of Phoenix it will pay off less than a master’s degree from the University of Pennsylvania,” Hershbein says.

Taylor says the nature of remote learning during the pandemic erased some of the bias around online programs, but employer preference is still skewed toward degrees from elite colleges.

“I think we have to be honest with ourselves: There’s always an elitism that plays itself into the hiring process,” says Taylor.

For graduate students, attending a highly selective university might help them make professional connections to more easily get a job. And grad programs are “cash cows” for universities, says Hershbein. Universities count on the prestige of their undergraduate degrees to attract graduate students into expensive programs.

Students then rack up exorbitant debt for degrees that might not pay off.

An estimated 40% of master’s degree programs do not pay off at all, according to February 2022 data from the Foundation for Research on Equal Opportunity, a nonprofit think tank.

The uncertainty means prospective students will need to do some legwork to prevent graduate school from harming their finances more than it helps their employment prospects. That means graduate applicants should:

  • Start with the graduate program costs on a school’s website.
  • Search earnings and entry-level degree requirements for occupations using the Bureau of Labor Statistics Occupational Outlook Handbook.
  • Scour other tools that list program types and outcomes by degree level including the Wall Street Journal and the Georgetown Center on Education and the Workforce.

This article was written by NerdWallet and was originally published by The Associated Press. 

Anna Helhoski writes for NerdWallet. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.

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Student Loan Pause Extended Again — Is There an End Game?

Federal student loan borrowers just got an extra four months before their payments resume.

If that feels like déjà vu, it’s because this is the sixth extension of the interest-free payment pause that went into effect in March 2020 under the Trump administration, at the onset of the COVID-19 pandemic. Payments had been scheduled to restart beginning May 2.

This latest extension, through Aug. 31, will put the total number of months without payments at 30. Nearly 37 million of the nation’s federal student loan borrowers haven’t had to make payments during the pause, saving them a collective $195 billion in waived payments, according to a March report from the New York Federal Reserve.

They’ve used the wiggle room in their budgets to handle essentials like food, rent and child care. Some have managed to tackle larger financial goals, like paying down credit card debt or saving up for emergencies. Some even kept paying each month.

For months, Department of Education officials have expressed concern about whether the majority of borrowers could handle payments after more than two years without them, according to a recent Government Accountability Office report.

On Wednesday, the White House said borrowers still aren’t ready. And it offered up a huge win for 5 million borrowers with loans in default: an automatic return to good standing. Borrowers in default have long faced wage garnishment, damage to their credit and substantial collections fees. Debtors have had the option to pursue rehabilitation during the pause; now it’s automatic.

It’s unclear if borrowers will be more able to cope with payments come September. At the very least, the additional reprieve provides borrowers with more time to plan.

But plan for what, exactly?

Is there an end game?

Forgive student debtors for being doubtful: The government labeled last August’s extension as “final,” but that has been followed by several more.

Employment is back to near pre-pandemic levels, COVID-19 cases are dropping and other pandemic-related relief has expired. But the Biden administration, in a White House news release, said Federal Reserve data predicted a rise in late payments and defaults if payments resumed.

Some experts are skeptical.

“This feels much more driven by politics than by public health,” says Robert Kelchen, professor and head of the department of educational leadership and policy studies at the University of Tennessee at Knoxville.

Kelchen says he thinks an additional extension this year could be likely. He also raised the question of whether the Biden administration will ever resume payments. “They’re not going to resume at the end of August to make voters repay right before the midterms,” Kelchen says. “And then, at that point, the re-election campaign starts.”

Kelchen isn’t the only one who sees the move as largely political. Betsy Mayotte, president and founder of The Institute of Student Loan Advisors, says any extension will benefit borrowers, but four months might be more palatable to voters during the midterm election, whether they support or oppose extending the payment pause.

“If they had [extended] it through the end of the year, some people might take that as, ‘he only did it to get through midterms,’” Mayotte says.

Too much? Not enough?

Extending the payment restart raises the stakes for the Biden administration to make a decision on debt cancellation, says Mike Pierce, executive director of the Student Borrower Protection Center advocacy group. “I think this is the clearest sign yet that big things are coming,” he adds.

The extension “does not make sense if you decouple it from the broader conversation around student debt cancellation and student loan reform,” says Pierce, adding that the timing of the extension’s expiration does tee up the possibility of debt cancellation weeks before voters head for the polls.

The Biden administration has repeatedly said the president would support cancellation via congressional action despite calls from Democrats in Congress, along with student borrower advocates, state attorneys general and one former Secretary of Education, to do so via executive action. Biden has questioned his unilateral ability to do so.

The amount of cancellation, if any, has also been a tug-of-war. While on the campaign trail, Biden pledged to sign off on canceling $10,000 in debt per borrower, a promise he has distanced himself from since becoming president. Some Democratic lawmakers like Sens. Chuck Schumer of New York and Elizabeth Warren of Massachusetts have called for Biden to cancel $50,000 in debt.

While broad student debt cancellation has not come to pass, more than 700,000 borrowers have seen $17 billion in loan debt forgiven via a revamped Public Service Loan Forgiveness program and other existing forgiveness programs.

Is it time to get back to normal?

Republican lawmakers, meanwhile, have criticized both the extension and their Democratic colleagues’ calls to cancel student debt. Rep. Virginia Foxx of North Carolina, who sits on the House Education Committee, called the pause extension “outrageous,” while two others, Reps. Jim Banks of Indiana and Bob Good of Virginia, had previously introduced a bill to block another extension.

Leaders in the private student lending industry are also against extending the pause since their business has taken a two-year hit from federal borrowers who chose to stick with the pause rather than refinance privately. SoFi CEO Anthony Noto wrote in a March 17 blog post that extending the pause was “at best fiscally irresponsible” and “takes from struggling families and gives to the affluent, and at worst it’s political theater.”

Student loan servicers are unlikely to be more ready to resume processing payments or offering guidance to borrowers in September than May, says Scott Buchanan, executive director of the Student Loan Servicing Alliance, which represents servicers. These private companies are contracted by the government to manage federal student loans.

Buchanan adds, “In fact, we may be less ready just because you’ve burned through a bunch of resources to get ready and now all of those are wasted.”

Who needs a plan? Borrowers

Buchanan says he’s concerned that a further delay means borrowers won’t take the restart seriously. “They’ll ignore it until they get a delinquency notice,” he says. “The more we push this out and do it at the last minute, the worse our problems become.”

What leaders from both sides of the aisle, the private lending industry and student borrower advocacy groups all seem to agree on is that the pause doesn’t fix the core issue: The student lending system is broken. And, as Pierce says, a four-month extension isn’t much time to implement meaningful reform.

Four months does give borrowers more time to, at a minimum, make a plan for payment to restart. Whenever that is.

Anna Helhoski writes for NerdWallet. Email: anna@nerdwallet.com. Twitter: @AnnaHelhoski.

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