WEBVTT - ManpowerGroup Chief Strategy Officer Becky Frankiewicz Talks Labor Market

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Let's turn back to the labor market. The government shut

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<v Speaker 2>down holding the release of the payroll data. Becky Frankewitz

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<v Speaker 2>of Manpac Group, one of the world's leading staffing companies,

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<v Speaker 2>writes the following, The official jobs report might be on pause,

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<v Speaker 2>but the labor market keeps moving and our data shows

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<v Speaker 2>a market in transition. Becky joins us now for more. Becky,

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<v Speaker 2>welcome to the show. It's been too long. What are

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<v Speaker 2>we transitioning from and to what?

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<v Speaker 1>Yeah?

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<v Speaker 3>So, first, it's a strange no jobs report jobs Friday.

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<v Speaker 3>So usually we say happy jobs Friday, and it is

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<v Speaker 3>still a happy jobs Friday.

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<v Speaker 1>Because we see.

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<v Speaker 3>Real time, real world data and John, we're watching three trends. First,

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<v Speaker 3>job hugging is the new job switching, so we're not

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<v Speaker 3>seeing workers switch jobs anymore. We're seeing them hold onto

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<v Speaker 3>their jobs. In fact, switching us down fifty percent in

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<v Speaker 3>the last two years, so workers are staying put. The

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<v Speaker 3>second big trend that we're seeing is lateral is a

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<v Speaker 3>new vertical. Employers are holding on to their talent and

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<v Speaker 3>so there's this change called micro mobility where we're seeing

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<v Speaker 3>people change titles but not change companies. And the final

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<v Speaker 3>piece I'd say is growth isn't gone, it's just moved.

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<v Speaker 3>So we're seeing growth in immediate benefit roles, a lot

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<v Speaker 3>of growth in the data scientists, databased architects, things that

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<v Speaker 3>are tech forward, and we're seeing some shifts in and

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<v Speaker 3>even manufacturing where we're seeing blue collar workers like engineers,

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<v Speaker 3>people who are on the front line in terms of

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<v Speaker 3>manufacturing starting to grow.

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<v Speaker 1>Logistics is a little bit soft.

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<v Speaker 3>Of course, education, retail is showing some strength, but there

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<v Speaker 3>is still growth.

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<v Speaker 1>You just have to look harder to find it.

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<v Speaker 4>Bekay, is there growth in entry level jobs?

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<v Speaker 3>And Marie, it's one of the top things we're watching.

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<v Speaker 3>So if you said what are you watching closely, I

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<v Speaker 3>would tell you impact of AI and entry level jobs.

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<v Speaker 3>We are seeing reduced demand for the educated yet inexperienced,

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<v Speaker 3>and that is people coming out of college. So employers

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<v Speaker 3>are prioritizing people who have actual experience because again they

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<v Speaker 3>want immediate impact. Employers aren't hiring to develop people, They're

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<v Speaker 3>hiring to actually get benefit from their hires today, and

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<v Speaker 3>that is impacting our entry level professionals.

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<v Speaker 4>Historically, what kind of time can you reckon this back

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<v Speaker 4>to when did we see such a weak environment for

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<v Speaker 4>entry level jobs.

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<v Speaker 3>Yeah, it's been a long time memory. We're we're not

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<v Speaker 3>in the two thousand and eight stage yet, which was

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<v Speaker 3>a huge crisis. But we are seeing a drop of

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<v Speaker 3>about six percent in terms of the demand for entry

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<v Speaker 3>level jobs. And it's coming at the same time the

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<v Speaker 3>overall job market is continuing to cool.

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<v Speaker 1>It's not just cooled, it's continuing to cool.

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<v Speaker 3>We see total jobs posted again, I don't need BLS

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<v Speaker 3>to tell you this. We look every day. Total jobs

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<v Speaker 3>posted have dropped under seven million. It's always been a

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<v Speaker 3>seven million mark, under seven million in to the lowest

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<v Speaker 3>level in four years. And we're seeing this overall slowing

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<v Speaker 3>in jobs, and we're seeing a change and the kinds

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<v Speaker 3>of jobs people are hiring entry level And in part

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<v Speaker 3>it's a bit of weight and see on AI. I

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<v Speaker 3>heard one of your prior guests talk about that. It's

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<v Speaker 3>a bit of weight and see. But it's also a

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<v Speaker 3>bit of economic uncertainty causing me to prioritize today versus tomorrow.

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<v Speaker 2>Becky, can we just pick up on the AI point.

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<v Speaker 2>Where are you seeing that, how's it showing up and

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<v Speaker 2>how you do your draw a distinction between what is

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<v Speaker 2>driven by AI and what's driven by traditional broader economic concerns.

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<v Speaker 1>Yeah.

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<v Speaker 3>Well, it's hard to break apart, John, if I'm honest,

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<v Speaker 3>but I'll tell you what the data is showing us,

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<v Speaker 3>and the data is showing us that.

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<v Speaker 1>Tech forward roles are surging again.

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<v Speaker 3>Database scientists, data architects, anything on security is surging today.

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<v Speaker 3>Of course, we've seen some softening and software developers, but

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<v Speaker 3>guess what, back to entry level roles, it's still one

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<v Speaker 3>of the top three entry level roles. It's down almost

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<v Speaker 3>fifty percent year over year, but it's still in volume,

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<v Speaker 3>one of the top three.

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<v Speaker 1>So we're seeing a pretty balanced view on AI right now.

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<v Speaker 3>Employers are still telling us that if they're more tech

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<v Speaker 3>forward as an employer digitizing faster, they're intending to hire more.

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<v Speaker 3>We're waiting to see that play out, but right now,

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<v Speaker 3>I would say we're seeing a balanced view on AI.

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<v Speaker 3>But there is a lot of weight and see on

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<v Speaker 3>the promise of the impact of what AI can give

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<v Speaker 3>our economy.

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<v Speaker 2>So, Becky, are you seeing any supply side issues, because

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<v Speaker 2>the big debate on Wall Street is yes, we've seen

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<v Speaker 2>a step down in payrolls growth, but we've also seen

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<v Speaker 2>a step down and supply and the economics will come

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<v Speaker 2>on the program and some of them disagree with each other.

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<v Speaker 2>Some might say this is bad, we need to respond

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<v Speaker 2>to it. Others might say, well, this is a supply

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<v Speaker 2>side story. Yes, you've had a step down in payrolls,

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<v Speaker 2>but you've not had an increase in labor market slack.

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<v Speaker 2>From your standpoint, is there a supply side issue? Do

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<v Speaker 2>you see that showing up in the business.

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<v Speaker 3>Yeah, we're not seeing significant supply side issues, John. What

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<v Speaker 3>I would say we're seeing is a bit of it.

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<v Speaker 3>I'm not using it economically, a bit of stagnation in

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<v Speaker 3>terms of mobility. People are staying put, and when people

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<v Speaker 3>stay put, it is harder to free up some of

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<v Speaker 3>the supply to actually generate this transition that normally underpins

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<v Speaker 3>our economy. When I tell you that job switching is

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<v Speaker 3>down fifty percent five zero in the last two years,

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<v Speaker 3>that is significant and that's not having an impact on

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<v Speaker 3>overall supply, but it is having an impact on mobility,

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<v Speaker 3>and mobility generally leads to growth in our economy.

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<v Speaker 4>Does this mean workers are not asking for higher wages?

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<v Speaker 2>Yeah?

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<v Speaker 3>Great, great question, Amory. What we're seeing now again, during

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<v Speaker 3>the heights of the pandemic, we saw huge bonuses for

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<v Speaker 3>switching jobs. We're seeing that level has dropped below seven percent.

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<v Speaker 3>So the premium on switching a job in terms of

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<v Speaker 3>your pay increase, traditionally runs around seven percent. We've seen

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<v Speaker 3>that now dropped about six and three quarters. So we're

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<v Speaker 3>not in sending people to move, and we're seeing an

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<v Speaker 3>increase in people who stay put. So I'm telling you

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<v Speaker 3>this whole idea of job hugging is real from the

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<v Speaker 3>employee view. And this idea of lateral not vertical, giving

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<v Speaker 3>titles and a little bit of pay is real from

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<v Speaker 3>an employee point of view. So they're coming together in

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<v Speaker 3>a way that people aren't moving.

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<v Speaker 4>Workers that are able though, to move structurally higher in

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<v Speaker 4>an organization because they moved an organization. What sectors is

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<v Speaker 4>that happening in.

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<v Speaker 3>So Amory, we're seeing only two sectors we're seeing this

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<v Speaker 3>increase in switching, if you will.

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<v Speaker 1>That is construction and that is in the financial markets.

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<v Speaker 3>And you've seen the headlines on the financial analysts that

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<v Speaker 3>are switching all over New York City. So those two

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<v Speaker 3>roles still have quite a bit of agency and we

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<v Speaker 3>are seeing switching there. But for the others, we're really

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<v Speaker 3>seeing people stay put.

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<v Speaker 2>So, Becky, we've been in this low chain dynamic in

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<v Speaker 2>the labor market for a while now. Economists have been

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<v Speaker 2>talking about it on this program. You have too. When

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<v Speaker 2>things break one way or the other, we're always looking

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<v Speaker 2>for that early indication. Now, correct me if I'm wrong.

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<v Speaker 2>I think you used to lead Quaker Foods when you

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<v Speaker 2>over saw that business. Becky, what kind of behavioral changes

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<v Speaker 2>were always looking out for for a leaning indicator of

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<v Speaker 2>which way this economy was about to break?

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<v Speaker 1>Yeah, so John, you're taking me in the wayback machine.

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<v Speaker 3>Now, we would look at number of items in the basket,

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<v Speaker 3>and so how many goods are people buying? Trips to

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<v Speaker 3>store average purchase price that you're actually putting in your basket.

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<v Speaker 3>And I know now from the jobs market report or

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<v Speaker 3>what we see in terms of people actually hiring who's

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<v Speaker 3>hiring today, it is the cost conscious consumer companies that

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<v Speaker 3>are hiring. Domino's is hiring, Low's is hiring. So we're

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<v Speaker 3>not seeing the high end retailers hiring. We're seeing the

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<v Speaker 3>more accessible retailers hiring, which tells me in terms of

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<v Speaker 3>early indicator, people are still very cost conscious, uncertain about

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<v Speaker 3>what's coming, and holding.

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<v Speaker 1>Onto their dollars like they're holding onto their jobs.

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<v Speaker 2>Becky, this was great. Let's do it again soon. Let's

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<v Speaker 2>go to see who needs the jobs report when you've

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<v Speaker 2>got Becky Frankowitz of Manpack Group