CNBC WORK

A ‘catastrophe’ is coming for the economy, but it’s not recession or inflation, says Secretary of Labor Marty Walsh

PUBLISHED TUE, OCT 25 2022 1:31 PM EDT | UPDATED WED, OCT 26 2022 5:17 AM EDT

Eric Rosenbaum
@ERPROSE

KEY POINTS
• U.S. Secretary of Labor Marty Walsh said in an interview at the CNBC Work Summit that he does not expect mass layoffs and job growth should continue into next year.
• But Walsh said that immigration reform, supported by every business owner he talks to, will be critical to the national workforce and without it, a ‘bigger catastrophe’ than a recession or inflation is coming.
• Walsh also offered views on a federal minimum wage increase, federal childcare support and gig worker rules reform seen as targeting Uber and Lyft.

There has been a lot of talk about looming layoffs, and by some recent surveying, as many as half of large employers are thinking about labor cost cuts as the economy slows. But U.S. Department of Labor Secretary Marty Walsh doesn’t see the recent job gains reversing, according to an interview at CNBC’s Work Summit on Tuesday.

“I still think that we’re going to have job gains as we move into the end of this year, early next year. A lot of people are still looking at different jobs,” he told CNBC’s Kayla Tausche at the virtual event. “We saw a lot of moving around over this last course of the year. People leaving jobs, getting better jobs, and I’m not convinced yet that we’re headed towards that.”

For the Federal Reserve, some level of higher unemployment is necessary to cool an economy that has been bedeviled by persistent inflation. Unemployment, at 3.5% now, went down in the last monthly nonfarm payrolls report. The Fed is targeting unemployment of 4.4% as a result of its policy and higher interest rates.

“We definitely have to bring down inflationary pressures,” Walsh said at the CNBC Work Summit, but he added that the way to do it isn’t layoffs. ... A House inquiry released on Tuesday found that the 12 largest employers in the nation including Walmart and Disney laid off more than 100,000 workers in the most recent recession during the pandemic.

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