Who Are the Millions of Americans Locked Out of the Job Market?

0:00This podcast is brought to you by ReliaQuest. Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.

0:33President Trump says that, actually, ICE should keep using traffic stops to arrest immigrants. Plus, market volatility has put Wall Street's biggest banks on track for their best ever trading year. And by most key metrics, the U.S. labor market is doing great. So who are the millions of Americans struggling for months and even years to find work? I've sent hundreds of job applications since early last year. I don't know how many. Maybe I'm close to 1 ,000. Who knows? It's Wednesday, July 15th. I'm Danny Lewis for The Wall Street Journal, sitting in for Alex Osola. This is the PM edition of What's News, the top headlines and business stories that move the world today.

1:16PayPal has received a takeover bid from payments company Stripe and buyout firm Advent International. People familiar with the matter say the proposed deal would value PayPal at around$53 billion. But there are no guarantees that PayPal will be receptive. The company's in the early stages of a turnaround plan under a new CEO. PayPal shares closed up 17 percent. It's the stock's best day ever since it became an independent, publicly traded company in 2015. That's when it was spun off from eBay. In Washington, President Trump says ICE should continue using traffic stops to arrest immigrants. The agency just this week had told officers that they shouldn't stop cars so they could arrest and question the people inside.

1:58That came after federal immigration officers shot and killed two people while they were driving in separate incidents in Maine and Texas. Traffic stops are one of the most common tools immigration officers use to arrest people, and halting them would make it harder for the administration to meet its internal arrest quotas. In a statement, Homeland Security Secretary Mark Wayne Mullen said the department's number one goal is to keep officers safe and get criminals off the street. But he didn't directly address the president's announcement. The Homeland Security Department and the White House didn't respond to a request for comment.

2:32And on Capitol Hill, Acting Attorney General Todd Blanche was trying to convince lawmakers that President Trump's$1.8 billion anti-weaponization fund is dead and buried. Critics saw the fund as a money pot for the president's allies. And it's become a sticking point for key Republican senators, senators who support Blanche needs to be confirmed as attorney general. During his confirmation hearing today, Blanche told the Senate Judiciary Committee that the Justice Department would accept legislation to prevent the fund from being resurrected. It is a moot issue, meaning there is no weaponization fund.

3:04The weaponization fund is dead. It's not moving forward. However, Blanche says the text of the deal creating the fund has not been changed. And he acknowledged that Trump could theoretically sue the government for breach of contract for failing to create the fund. BlackRock posted bumper quarterly results, and it made history as the first investment firm to manage more than$15 trillion in assets. The company took in$192 billion in new client money during the second quarter. That, plus booming stock markets, increased its assets under management by more than$1 trillion. And on a call with analysts, BlackRock chief executive Larry Fink said he thinks the rally in stocks still has more room to run.

3:45U.S. equity markets continue to climb to new highs, and returns are broadening beyond the U.S. I'm very optimistic on the outlook for global markets. BlackRock shares closed up 6.6 percent. BlackRock's far from the only company benefiting from the stock market rally. Wall Street's biggest banks are on pace to have their best trading year ever. According to a slate of second quarter earnings released this week, their trading desks brought in gargantuan hauls. And a Wall Street Journal analysis found that the five largest investment banks are on track to log nearly$180 billion in trading revenue this year, if they continue at their current pace.

4:21WSJ reporter Ben Glickman joins us now to explain what's going on. Ben, how much is the current market benefiting big banks? Like, who's coming out on top here? It's the big banks on Wall Street facilitating markets trades on behalf of clients. So that's JP Morgan, Goldman Sachs, Citigroup, Bank of America, Morgan Stanley. This year has been so crazy for markets. We're hovering near all-time highs, but we've also had huge dips. We've had a lot of shifting expectations around oil prices and geopolitical conflict. And if you're an investor, like a big hedge fund or a mutual fund, your goal is to position yourself when things change.

5:02And for each little trade that you do to position yourself, let's say you think that you need to sell oil because so-and-so happens in the Strait of Hormuz, the bank earns a small fee facilitating that trade for you. So the more and more trades that clients make for the banks, the more that this revenue goes up for this part of their business. There's also another part of it, which is banks provide financing for clients to make trades. A lot of people might have heard this term margin loans, which is where you borrow money in order to make a bigger bet in the market. These margin loans, it's been also a booming business.

5:38Banks have said that they're dedicating more of their balance sheets toward lending to markets participants. Institutional clients want to make bigger and bigger bets. And all of that is positive for the trading desks at big banks. Generally, though, the margins that banks make on trades is vanishingly small, right? Like, how are they making so much off of these fees? Well, it's really a volume game. And banks have succeeded in getting clients to agree to give them lots of trades. There's a ton of volatility in the markets, stocks, bonds, commodities. they're swinging around in their price a lot.

6:20And that's very good if you're in the business of facilitating trades. So generally, banks are loving it. That's WSJ reporter Ben Glickman. Thanks for joining us. Thanks for having me. MegaCap tech companies helped push indexes higher today. Apple, Alphabet, Microsoft, and Amazon all rose more than 2.5%. And the NASDAQ led the gains in the major indexes. It closed up 0.6%. SpaceX shares traded below their$135 IPO price for the first time today. The stock later made up some ground and ended the day just above the IPO price, at$135.27 a share. Coming up, after billions of dollars of donations, Warren Buffett has stopped giving to the Gates Foundation.

7:04That and more after the break.

7:14Decades ago, Warren Buffett and Bill Gates made headlines when the two billionaires pledged to give away the bulk of their fortunes. They're still doing it, but they're no longer doing it together. For the first time in two decades, Buffett did not donate to the Gates Foundation this year, instead giving his money to his own family's foundations. Buffett told CNBC that his decision wasn't based on revelations of Jeffrey Epstein's relationship with Gates. While it's distasteful and while he made mistakes, I made mistakes in hiring all kinds of people or choosing friends and then finding out later that one way or another they weren't what I thought they were.

7:50The Gates Foundation says it's grateful to Buffett for donating more than$47 billion over the years. Epstein's relationships with high-profile people were also the focus of a congressional hearing today. as members of the House Oversight Committee grilled Goldman Sachs lawyer Catherine Rumler about her correspondence with the convicted sex offender. Rumler had a years-long relationship with Epstein beginning in 2014, when she was a white-collar defense attorney. Her name appeared thousands of times in Epstein documents that have been released since last year, including emails with jokes about massages and prostitution.

8:23In her prepared remarks, Rumler said it was a mistake to associate with Epstein and that she wasn't aware of the extent of his activities.

8:33By most key metrics, the U.S. labor market looks like it's in great shape. The economy's added jobs for four months straight, and the unemployment rate is around 4%. But at the same time, nearly 2 million Americans have been locked out of the job market for at least six months. The share of people who are now long-term unemployed is near its highest level since late 2021, when the labor market was still recovering from the pandemic. WSJ economics correspondent Harriet Torrey joins us now to explain why so many people are having such a hard time finding work. Harriet, if things are looking generally pretty good, how come the number of people who have been unemployed for so long is growing?

9:11The labor market is in this static period where it's not adding workers at an aggressive pace, but workers aren't being fired as well. So for people who are out of work, it's just a difficult time to break in. And a lot of people are struggling with that, which is why we're seeing more people in this category of long-term unemployment, which means they've been looking for a job for 27 weeks or more. Who are the people who are struggling the most with this right now? The people who are unemployed for longer tend to be in white collar industries. So for instance, public administration, which is a lot of federal workers.

9:45Also IT workers, finance, business and professional services. Those are industries where you're just seeing these periods of unemployment to be considerably higher than the average. And prime working years tend to be between 25 and 54. And we are seeing that that group is overrepresented. And then within that group, workers from about their mid-20s to their mid-30s are both the highest number of overall jobless people and the highest portion of the long-term unemployed. What are some of the dangers of being out of work for so long that early in your career and having such a long gap in your resume?

10:21If you've been unemployed for six months or longer, economists say that's often a sign that the skills that you have are just maybe not that in demand in the jobs that are available. So you might have to go through an adjustment process. And what people often end up doing is having to take a lower paying job so that their income eventually will be lower. So it is tough. I spoke with Norik Karakashian. He's 38, who's an accountant in Glendale, California, and he's been looking into a job for the last year and a half. I've sent hundreds of job applications since early last year. I don't know how many.

10:54Maybe I'm close to a thousand. Who knows? So Norik is someone with excellent qualifications. He's a CPA. He had to leave his previous job because of personal circumstances, but expected to find a new job quickly. And that just hasn't happened. He's been considering doing a completely different kind of job altogether. I'm this close to sending a job application to FedEx for a warehouse job in a warehouse that's one hour away from Glendale to be a package handler. And I think many people, especially young people, white collar workers, spent all this money on their education and people question whether it was worth it.

11:30and whether they should maybe pivot to do something totally different, like become a firefighter or retrain, and to spend months or even years sending out resumes and hearing nothing back. I think it's very frustrating and demoralizing for people. That's WSJ economics correspondent Harriet Torrey. Thanks for joining us. Thank you. And that's what's news for this Wednesday afternoon. Today's show was produced by Anthony Bansi, with supervising producer Tali Arbel. I'm Danny Lewis for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.

12:09This podcast is brought to you by ReliaQuest. Cyber criminals are constantly attacking. They want your data. They want your identity. They want your innovation. ReliaQuest fortifies your business with agentic defense, AI that detects, contains, and eliminates cyber threats in minutes. It helps your security team move faster at the work that matters most to protect the business now and delivers insights to help them predict what's next. ReliaQuest, agentic defense for the enterprise. Learn more at ReliaQuest.com. That's R-E-L-I-A-Q-U-E-S-T.com.