Article 43
Thursday, July 31, 2014
Engineers - Education Isn’t Their Answer
Next time somebody tries to tell you the problem with jobs in America is people are too stupid, or education is the answer - maybe you can steer them to this collection of articles.
---
Many engineers remain unemployed despite reported tech skills shortages
Tech Journal
February 3rd, 2012
During a recent video chat session, President Obama told a woman that he could not understand why her engineer husband was unemployed because industry tells me that they don’t have enough highly skilled engineers.
However, in an analysis by the Center for Immigration Studies of the data from the American Community Survey collected by the Census Bureau show that there are a total of 1.8 million U.S.-born individuals with engineering degrees who are either unemployed, out of the labor market, or not working as engineers.
This is true for those with many different types of engineering degrees.
For a complete review of the American Community Survey, including a table containing detailed employment figures for specific engineering degrees, visit the Center for Immigration Studies website HERE.
The 2010 American Community Survey shows:
There are 101,000 U.S.-born individuals with engineering degrees who are unemployed.
There are an additional 244,000 U.S.-born individuals under age 65 who have a degree in engineering but who are not in the labor market. This means they are not working nor are they looking for work, and are therefore not counted as unemployed.
In addition to those unemployed and out of the labor force, there are an additional 1.47 million U.S.-born individuals who report they have an engineering degree and have a job, but do not work as engineers.
President Obama specifically used the words ԓhighly skilled. In 2010, there were 25,000 unemployed U.S.-born individuals with engineering degrees who have a MasterԒs or Ph.D. and another 68,000 with advanced degree not in the labor force. There were also 489,000 U.S.-born individuals with graduate degrees who were working, but not as engineers.
Relatively low pay and perhaps a strong bias on the part of some employers to hire foreign workers seems to have pushed many American engineers out their profession.
There are many different types of engineering degrees. But unemployment, non-work, or working outside of your field is common for Americans with many different types of engineering degrees.
The key policy question for the United States is how many foreign engineers should be admitted in the future. Contrary to President Obamas statement, the latest data from the Census Bureau indicate there is a very large supply of American-born engineers in the country. It would be better for the president to seek more diverse sources of information than simply relying on ғindustry to determine what is going on in the U.S. labor market.
Data Source: Figures for the above analysis come from a Center for Immigration Studies analysis of the public-use file of the 2010 American Community Survey (ACS) collected by the U.S. Census Bureau.
Figures on degrees and employment are based on self-reporting in the survey and have been rounded to their nearest thousand.
The survey asks about undergraduate degrees, so some of the individuals who have a Masters or Ph.D. may not have their graduate degree in engineering. Also, those who indicated that they have a professional degree are not included in the discussion of those with Masters and Ph.D.s because a large share have law degrees. The 2010 data is the most recent ACS available.
---
Unemployment and the ‘Skills Mismatch’ Story: Overblown and Unpersuasive
By Gary Burtless
Brookings Institute
July 29, 2014
The jobless rate has dipped to 6.1 percent, and businesses are already complaining about a skills shortage. Earlier this month the Wall Street Journal reported rising complaints by small business owners about their inability to fill critical job openings. Their complaints are not new. Two years ago, when unemployment topped 8%, personnel managers in manufacturing companies grumbled that it was impossible to fill positions requiring specialized skills. The Manufacturing Institute claimed that 600,000 job openings were going unfilled.
We shouldn’t be surprised when shrinking unemployment makes it harder for employers to fill job vacancies. If fewer people are trying to find work, fewer job seekers will show up for interviews and a smaller percentage will come with the skills employers need. In some cases, failure to fill job vacancies will limit how much or how fast a business can expand. Even if customers are eager to buy more of a firm’s products, the companys willingness to accept new orders may be weakened by its failure to fill key vacancies.
Throughout the recovery following the Great Recession we saw an abnormally high rate of job vacancies given the level of the unemployment rate. If past experience was a guide, the job vacancy rate we saw was consistent with an unemployment rate that was 1.5 to 2.0 percentage points lower than the one we actually experienced. The high rate of vacancies relative to unemployment suggests either that employers have become less efficient in filling vacancies or are facing more difficulties uncovering applicants with the skills they need. Their hiring methods may need an overhaul. Alternatively, today’s job seekers do not have the mix of skills needed by the nations expanding employers.
So far as I know, few researchers have looked carefully into the efficiency of company personnel departments. There is little information about whether employers nowadays process job applications more slowly or less effectively than they did in the past.
The second theory - the skills mismatch hypothesis - has received greater scrutiny. Economists have examined the skill mix of workers laid off from shrinking industries and compared it with the mix of occupational skills needed in industries that are growing. The available research on this topic is a long way from definitive. For what it is worth, most credible studies do not find a bigger mismatch than what we saw in past recoveries. However, our information about the skills of job seekers is not detailed enough to know whether their qualifications equip them to fill new positions in expanding industries. In the past 10 years, manufacturing companies have cut their payrolls by 2.2 million workers. The manufacturing workers who lost their jobs and are seeking new ones may lack the specific skills needed by expanding companies, even if their former jobs were in occupations closely related to the occupations that are now growing.
Employers who receive few applications from qualified job seekers might consider making an INVESTMENT IN TRAINING. Companies can pay for re-training current employees or training new ones. If the skill needed by the employer is highly specialized, there may be no other practical way to obtain a worker who possesses the needed skill. It makes no sense for unemployed workers to invest in specialized expertise that has no practical value except at one firm. Unfortunately, there is little reliable evidence about employers’ investment in skills or its trend in the current and past recoveries.
To an economist, the most accessible and persuasive evidence demonstrating a skills shortage should be found in wage data. If employers urgently need workers with skills in short supply, we expect them to offer higher pay to prospective new employees who possess the skills. When workers with crucial skills are offered better wages by expanding employers, they are in a strong position to demand better pay from their current employers, even if their own employer is not expanding. Current employers must match the wage offers of growing employers or risk losing their key employees.
Where is the evidence of soaring pay for workers whose skills are in short supply? We frequently read anecdotal reports informing us some employers find it tough to fill job openings. What is harder to find is support for the skills mismatch hypothesis in the wage data. Last week the BLS released its quarterly report on the pay of full-time wage and salary workers. The median full-time worker earned $782 a week in spring 2014 (see Charts 1 and 2). That wage was $6, or 0.8%, more than the median earnings received by workers one year ago. While other wage series show modestly faster gains in pay, there is little evidence wages or compensation are increasing much faster than 2% a year. Even though unemployment has declined, there are still 2.5 times as many active job seekers as there are job vacancies. At the same time, there are between 3 and 3 million potential workers outside the labor force who would become job seekers if they believed it were easier to find a job. The excess of job seekers over job openings continues to limit wage gains, notwithstanding the complaints of businesses that cannot fill vacancies.
It is cheap for employers to claim qualified workers are in short supply. It is a bit more expensive for them to do something to boost supply. Unless managers have forgotten everything they learned in Econ 101, they should recognize that one way to fill a vacancy is to offer qualified job seekers a compelling reason to take the job. Higher pay, better benefits, and more accommodating work hours are usually good reasons for job applicants to prefer one employment offer over another. When employers are unwilling to offer better compensation to fill their skill needs, it is reasonable to ask how urgently those skills are really needed.
---
Bill Gates’ Tech Worker Fantasy
Ron Hira, Paula Stephan et al.
USA Today
July 27, 2014
Business executives and politicians endlessly complain that there is a “shortage” of qualified Americans and that the U.S. must admit more high-skilled guest workers to fill jobs in STEM fields: science, technology, engineering and math. This claim is echoed by everyone from President Obama and RUPERT MURDOCH to MARK ZUCKERBERG and Bill Gates.
Yet within the past month, two odd things occurred: Census reported that only one in four STEM degree holders is in a STEM job, and Microsoft announced plans to downsize its workforce by 18,000 jobs. Even so, the House is considering legislation that, like the Senate immigration bill before it, would increase to unprecedented levels the supply of high-skill guest workers and automatic green cards to foreign STEM students.
As longtime researchers of the STEM workforce and immigration who have separately done in-depth analyses on these issues, and having no self-interest in the outcomes of the legislative debate, we feel compelled to report that none of us has been able to find any credible evidence to support the IT industry’s assertions of labor shortages.
Stagnant wages
If a shortage did exist, wages would be rising as companies tried to attract scarce workers. Instead, legislation that expanded visas for IT personnel during the 1990s has kept average wages flat over the past 16 years. Indeed, guest workers have become the predominant source of new hires in these fields.
Those supporting even greater expansion seem to have forgotten about the hundreds of thousands of American high-tech workers who are being shortchanged - by wages stuck at 1998 levels, by diminished career prospects and by repeated rounds of layoffs.
The facts are that, excluding advocacy studies by those with industry funding, there is a remarkable concurrence among a wide range of researchers that there is an ample supply of American workers (native and immigrant, citizen and permanent resident) who are willing and qualified to fill the high-skill jobs in this country. The only real disagreement is whether supply is two or three times larger than the demand.
Unfortunately, companies are exploiting the large existing flow of guest workers to deny American workers access to STEM careers and the middle-class security that should come with them. Imagine, then, how many more Americans would be frozen out of the middle class if politicians and tech moguls succeeded in doubling or tripling the flow of guest workers into STEM occupations.
Redundant reforms
Another major, yet often overlooked, provision in the pending legislation would grant automatic green cards to any foreign student who earns a graduate degree in a STEM field, based on assertions that foreign graduates of U.S. universities are routinely being forced to leave. Such claims are incompatible with the evidence that such graduates have many paths to stay and work, and indeed the “stay rates” for visiting international students are very high and have shown no sign of decline. The most recent study finds that 92% of Chinese Ph.D. students stay in the U.S. to work after graduation.
The tech industry’s promotion of expanded temporary visas (such as the H-1B) and green cards is driven by its desire for cheap, young and immobile labor. It is well documented that loopholes enable firms to legally pay H-1Bs below their market value and to continue the widespread age discrimination acknowledged by many in the tech industry.
When considering the credibility of the industry’s repetitive claims of “shortages,” it is worth recalling its history of misbehavior in hiring and employment. The most recent example was the proposed $300 million legal settlement of a class action against companies such as Google, Apple, Intel and Adobe for anti-competitive collusion to suppress the pay of highly skilled employees, including unlawful agreements to not recruit each others’ workers.
IT industry leaders have spent lavishly on lobbying to promote their STEM shortage claims among legislators. The only problem is that the evidence contradicts their self-interested claims.
Ron Hira is a professor of public policy at Howard University. Paula Stephan is a professor of economics at Georgia State University.Hal Salzman is a Rutgers University professor of planning & public policy at the J.J. Heldrich Center for Workforce Development. Michael Teitelbaum is senior research associate at the Harvard Law School’s Labor and Worklife Program. Norm Matloff is a professor of computer science at the University of California-Davis.
Section General Reading •
View (0) comment(s) or add a new one •
Printable view • Link to this article •
Home •
Saturday, July 26, 2014
Is Long-Term Unemployment Declining?
Long-term unemployment, which was a much larger problem during the recent recession than during the 1980s downturns, has finally begun to fall rapidly. The problem cuts across virtually all parts of society, with a substantial proportion of the unemployed in all education and age categories being out of work for more than six months.
A Drop in the Long-Term Unemployed
By Floyd Norris
NY Times
July 25, 2014
The LONG-TERM UNEMPLOYMENT rate, which soared in 2009 to heights not seen since the Great Depression, is finally declining rapidly. The proportion of the work force that has been unemployed for at least 27 weeks has fallen to 1.98 percent, less than half the record high of 4.4 percent reached in 2010.
"Since the end of 2013, the long-term unemployment rate dropped 0.5 percentage point, thereby accounting for almost the entire decline in the overall unemployment rate,” pointed out two Federal Reserve Board economists, Tomaz Cajner and David Ratner, in a NOTE published by the Fed this week.
As a result, for the first time in five years, less than a third of all unemployed workers have been out of work for at least six months. In the first six months of 2014, that figure dropped at the fastest rate in more than half a century.
“The improvement in the labor market is reaching the long-term unemployed,” said Heidi Shierholz, an economist at the Economic Policy Institute. “They are benefiting from the modest but measurable improvement in the labor market.”
And yet the level of long-term unemployment remains high by historical standards. During the double-dip recessions of the early 1980s, the overall unemployment rate peaked at 10.8 percent, well above the 10 percent peak in the recent recession. And now, more than six years after the recession began, the overall unemployment rate of 6.1 percent is significantly lower than at a comparable point after the 1980s downturns began. But the long-term unemployment rate remains much higher than it was at this point in the earlier cycle.
“The problem of long-term unemployment has not been limited to only certain kinds of workers. It is not just the problem of people who don’t have any skills and cant find work,” said Katharine G. Abraham, a former commissioner of the Bureau of Labor Statistics who now is a professor at the University of Maryland.
The bureau, which collects the statistics through its monthly survey of households, produces detailed figures for various groups each month but does not estimate what they would be when adjusted for seasonal factors. The lower two sets of charts show 12-month averages, ending in the month shown, for each group. The higher set of charts shows seasonally adjusted figures for the entire work force and therefore reflects changes in conditions more rapidly.
As might be expected, the long-term unemployment rate is lower for those with the most education. But over the most recent 12 months, about 37 percent of unemployed workers with advanced degrees had been out of work for more than six months a figure that was almost identical with every other level of education except one. Only 32 percent of unemployed high school dropouts had been unemployed for that long.
Similarly, there seems to be little difference among age groups, with the exception of the youngest workers, aged 16 to 24. They have a higher long-term unemployment rate, but a smaller percentage of young unemployed workers have been jobless for an extended period.
But race does appear to make a difference. Whites are far less likely to face long-term unemployment (this white guy and his friends would beg to differ. ed) than blacks, with Hispanics somewhere in between. Even after falling recently, the black long-term unemployment rate of 5.1 percent over the last 12 months is considerably higher than the 3.4 percent peak rate for whites, reached in 2010.
---
Five Years into Recovery, State Jobs Picture Improves Across the Country, Though Many States still Have a Long Way to Go
By David Cooper
Economic Policy Institute
July 18, 2014
The REGIONAL AND STATE AND EMPLOYMENT SUMMARY, released this morning by the Bureau of Labor Statistics, showed the same general improvement in state labor market conditions that we’ve seen in most states over the past year. While this is good news and echoes this month’s strong national jobs report, there are still reasons for concern, as the labor force shrank in many states, and the majority of states have still not reached their pre-recession employment levels.
In the three month period from March 2014 to June 2014, 41 states (plus the District of Columbia) saw job growth, with the largest percentage gains occurring in Delaware (+1.3 percent), Texas (+1.2 percent), and the District of Columbia (+1.2 percent). Nine states lost jobs, with the largest percentage declines occurring in Vermont (-0.9 percent), Wyoming (-0.9 percent), and Alaska (-0.8 percent). Importantly, all of the four major regions and nine Census divisions of the country experienced strong job growth over this period, with the oil and gas boom fueling the largest growth (+1.0 percent) in the West South Central division that contains Texas, Oklahoma, Arkansas, and Louisiana.
Over the same timeframe, the unemployment rate fell in 34 states (plus the District of Columbia). The largest decreases occurred in Illinois (-1.3 percent), Massachusetts (-0.8 percent), Nevada (-0.8 percent), and Rhode Island (-0.8 percent). While these declines are generally good news, the labor force shrank in three of these top four states (Illinois, Massachusetts, and Nevada), and in 21 states overall, suggesting that not all of the improvement in state unemployment rates was due to job seekers finding jobs. The unemployment rate increased in 12 states, led by Louisiana (+0.5 percent), Georgia (+0.4 percent), and Virginia (+0.4 percent). Four states saw no change.
Even with this improving picture across the country, many states still have a long way to go. As of June, 31 states have yet to recoup the jobs they lost in the Great Recession. Moreover, there are still too many workers who have been sidelined from the workforce for an exceptionally long period of time. As EPI’s new long-term unemployment data tool shows, in most states the share of the labor force that is long-term unemployed (unemployed for six month or more) is still as high, or higher, than it has ever been.
---
Across US job market, layoffs are becoming rare
By The Associated Press
July 25, 2014
The risk of losing your job is getting smaller and smaller.
As the U.S. economy has improved and employers have regained confidence, companies have been steadily shedding fewer workers. Which is why applications for unemployment benefits have dwindled to their lowest level since February 2006 nearly two years before the Great Recession began - the government said Thursday.
The trend means greater job security and suggests a critical turning point in the economic recovery. It raises the hope that workers’ pay will finally accelerate after grinding through a sluggish recovery for the past half-decade.
When the economy sank into recession at the end of 2007, employers cut deeply into their staffs. And then during the recovery, they hired only hesitantly. Instead, they sought to maximize the productivity of their existing employees.
But in recent months, the picture has brightened. Employers have added 200,000-plus jobs for five straight months, and the unemployment rate has reached 6.1 percent, the lowest since 2008.
“Now, the steadily declining level of layoffs suggests that employers may have to hire even more aggressively and raise pay if they want to expand their businesses,” said Joel Naroff, president of Naroff Economic Advisers.
“They’ve been continually working their workers harder and longer,” Naroff said. “As a result of that, we have consistent growth and you can’t lay off people anymore.”
The shortage of laid-off workers searching for jobs means that more companies may need to pay more to attract talent. Thus far, wage growth has essentially only kept pace with inflation, and household incomes remain below their 2007 levels.
Most businesses have so far been hesitant to raise wages, so there may be a lag before workers see higher paychecks.
“But when the dam breaks, it’s really going to break,” Naroff predicted.
Some firms say they’re already dealing with wage pressures.
Cleveland-based Applied Medical Technology has raised hourly pay for warehouse employees from $8.25 to $10. It did so both to attract new hires and because it heard that some of its employees had quit for raises elsewhere, said Jeff Elliott, the company’s chief financial officer.
The company also started holding pizza parties and summer cookouts. Elliott said it’s cheaper and easier to keep existing employees than to find and train new ones.
Throughout the economy, layoffs have fallen so much that the number of people seeking unemployment benefits plunged last week to a seasonally adjusted 284,000, a low last achieved in February 2006. And after accounting for U.S. population growth, the number of people applying for unemployment aid has reached its lowest point since 1999.
The four-week average of applications, which smooths out week-to-week fluctuations, has dropped to 302,000 from 348,500 when the year began.
“In the weeks that follow,” said Michelle Girard, chief economist at the Royal Bank of Scotland, “claims look likely to hold at or below the 300,000 mark.”
The sharp decline has paralleled healthy monthly employment reports. Employers added a net 288,000 jobs in June, capping the first five-month stretch of gains above 200,000 since 1999 at the height of the dot-com boom.
The consensus forecast of economists is that the government will announce next week that employers added 225,000 jobs in July, according to a survey by the data firm FactSet.
Not every company is avoiding layoffs. Earlier this month, Microsoft announced that it would cut 18,000 workers the biggest layoffs in its 39-year history. But layoff announcements now mainly reflect strategic changes within individual companies, rather than broader economic conditions, Naroff said.
Other data confirm that across the economy, job cuts have reached unusually low levels. Total layoffs in May dropped below pre-recession levels, the government said in a separate report that reveals how many people were hired, fired or quit jobs.
Just 1.58 million people were laid off in May, according to the Labor Department. That was the third-lowest monthly figure since the government began tracking the data in 2001.
Still, while layoffs have fallen 7.5 percent this year, actual hiring has increased just 3 percent. That’s a big reason the job market might not seem as healthy as the series of strong monthly net job gains might suggest.
Even so, more people with jobs means more people with paychecks, which tends to boost consumer spending and growth. After a sharp contraction in the economy in the first three months of the year, most economists expect growth to exceed a 3 percent annual pace in the second half of 2014.
---
Long-Term Unemployment Shrinking For Good Reasons: Fed Economists
By Arthur Delaney
Huffington Post
July 22, 2014
An improving job market is shrinking the ranks of the long-term jobless, economists for the Federal Reserve said in a Monday blog post.
Slightly more than 3 million Americans had been out of work six months or longer as of June, according to the Labor Department, down from 4.3 million this time last year. But it hasn’t been clear whether the picture is truly improving or the long-term jobless are just disappearing from the data because they’ve despaired of ever finding work, since only those who continue looking count as unemployed.
The Fed economists, Tomaz Cajner and David Ratner, say that with the labor force participation rate holding steady at 62.8 percent, the decline in the rate of long-term unemployment accounts for most of the drop in the overall unemployment rate, which has fallen from 6.7 percent last December to 6.1 percent in June.
“These encouraging developments appear consistent with rising employment of those previously reported as long-term unemployed,” Cajner and Ratner write.
Without delving much into the underlying data, Republican lawmakers have said the declining jobless rate proves the wisdom of discontinuing long-term unemployment benefits, which Congress dropped in December and Democrats have been unable to revive. If the long-term jobless are getting their mojo back, both Congress and the Fed may be even less likely to try to help them.
Some analysts have said the jobs picture is gloomier, citing the Bureau of Labor Statistics’ monthly data on labor market flows—people coming and going from jobs to unemployment, and from unemployment to nonparticipation. The monthly flows data suggest the long-term jobless aren’t finding much work.
Cajner and Ratner take a longer view, checking annual transitions instead of monthly ones, and like what they see. “Importantly, at the yearly frequency, the long-term unemployed are currently more likely to transition to employment than to nonparticipation, in stark contrast with the monthly flows data,” they write.
Section General Reading •
View (0) comment(s) or add a new one •
Printable view • Link to this article •
Home •
Friday, July 25, 2014
Rise Of The Temp Workers Part 6 - Obamacare And Jobs
The New American Dilemma
Obamacare is one reason for the rise of part-time labor.
By Mortimer Zuckerman
USA Today
July 24, 2014
There was a distinctive odor of hype about the newest jobs report from the federal government. Most people will have the impression we created 288,000 jobs in June meaning full-time jobs. Not so. Full-time jobs plunged by over half a million, or 523,000. What֒s increased is part-time jobs. They soared by about 800,000 to over 28 million. Just think of all those Americans working part time, no doubt glad to have the work, but they also have lower pay, diminished benefits, and a lack of job security. And then theres the effect on self-esteem and the stress of managing a household.
Yet all the attention earlier this month wasn’t focused on part-time America, but only because the government and headline writers treated part-time jobs as if they were full-time jobs. There is a crying need for good, well-paying, full-time jobs, yet only 47.7 percent of adults in the U.S. are working full time. Yes, the percentage of unemployed has fallen, but its worth barely a Bronx cheer. It reflects the unsavory fact that 2.4 million Americans have become discouraged and have dropped out of the workforce. You might as well say that the unemployment rate would be zero if everyone just quit looking for work.
The loss of full-time jobs is the new American dilemma. What matters more than the quantity of work is the quality. Even worse, the June employment rate was itself deceptive. Previous harsh weather forced numerous schools to extend classes into June, which created jobs for the month that would not normally have figured in the totals.
In the immediate excitement of announcing 288,000 “jobs,” most commentary, taking its tone from President Obama’s we’re making progress statement, ignored or glossed over the real story: The disturbing trend to lower-quality, part-time jobs. Last month the ranks of involuntary part-timers swelled to 7.5 million, compared to 4.4 million in 2007. Way too many adults are dependent on the low-wage, part-time jobs that teenagers would normally fill. On top of that unwelcome record, the number of people who’ve been out of work for more than six months is around 3 million, well above the historical average. And the proportion of Americans working or looking for work is near its lowest level since the late 1970s.
Rather than face this accelerating deterioration of the American workforce, the government seemed to take refuge behind the positive headlines. We have to worry that were creating a two-nation state, a workforce permanently polarized with full-time workers on one side and the part-time workers stuck in a bin labeled “part-time” for economic reasons. Federal Reserve chair Janet Yellen had it right when she said, “The existence of such a large pool of partly unemployed workers is a sign that labor conditions are worse than indicated by the unemployment rate.”
There are a number of reasons for our predicament. But there is one political contribution to the dismal trend. Many employers cut workers below the Affordable Care Act 30-hour threshold and took on new part-time workers to fill the void. Sometimes two people worked the same number of hours as one had previously worked.
Is that progress? It sure isn’t when the country has 10.4 million people looking for work, another 3.3 million who have given up the search as futile, 14 million on disability, and 37 million who have retired,Ӕ according to Thomas G. Donlan in a Barrons editorial earlier this year. For the unemployment rate to decline substantively, the U.S. needs to generate above-trend growth. But it’s gone the other way. We are averaging roughly 2 percent growth in GDP over the last half-dozen years.
No wonder the number of people leaving the labor force entirely is running at about double the pace of new job creation. But the longer people stay out of work, the greater the erosion in their skill set, and that can make finding a new job even tougher. The ranks of the unemployed who have been looking for work fruitlessly for at least six months is now at 33 percent, compared to around 22 percent in past recessions. And of those who are unemployed for the long-term, only 10 percent actually end up getting a job.
These are the grave issues we ought to be discussing, instead of heralding a false dawn. We must focus on breadwinner jobs having shrunk at a stunning rate for the entire duration of the 21st century. We had 61.5 million full-time breadwinner jobs in January 2000, but now that number is down to 56.5 million.
It is particularly upsetting that our current high unemployment is concentrated in the oldest and youngest workers. Older workers have been phased out as new technologies improve productivity, and young adults who lack skills are struggling to find entry-level jobs with advancement opportunities. And in the process they are losing critical time to develop workplace habits, contacts, and new skills. Since 2007, the U.S. population has grown by 14 million, but we have 2 million fewer jobs, and are 10 million jobs shy of where we should be. Plus we have between 8 and 10 million part-time workers who want full-time positions.
The quality of jobs and their compensation is lamentable. According to Bloomberg Businessweek, American men who work full-time year-round earn less in real terms in 2012 than they did in 1973. So much for a rising tide lifting all boats. The disproportionate number of the added jobs are part-time or low-paying or both. Part-time work accounted for more than 65 percent of positions added in the last year. Low-paying retailers, restaurants and bars have provided 61 percent of the nations job growth.
The fact is we really havenҒt had an economic recovery. The young, the less educated, and in particular the unemployed, are experiencing hardly any recovery at all. High-wage industries have lost a million positions. Low-paying jobs are gaining and now account for 44 percent of all employment growth since the recovery started, with 3.8 million in food service showing the most growth by far. Higher-wage industries, which accounted for 41 percent of the jobs lost during the recession, have only recovered 30 percent of their jobs.
Median household income tells the story. Its still below what it was in 2008. So Americans are falling behind year after year, and as one person put it, size matters in America and no place more than in our paycheck. The growth in annual labor compensation has dropped from an annual rate of about 3 percent in the years before the recession to about 2 percent at best these days.
Men have suffered more than women in the recent downturn, as their job losses are roughly twice the decline in jobs held by women. And the long-term unemployment rate, which means being out of work for more than six months, has been higher than the short-term rate, which encompasses people who have been out of work for less than a month, something that has never happened before. More than 4.5 years after the end of the recession, employment has risen more slowly than it grew on average during the four previous recoveries.
The average weekly pay of temp jobs at $554 is one-third less than the pay for all jobs on average, according to the Bureau of Labor Statistics. And many of the workers are faced with a shortened work week. The number of long-term unemployed remains at historically high levels, standing at more than 3 million in June. The proportion of Americans in the labor force is down to a 36-year low, 62.8 percent, down from 66 percent in 2008.
Part-time jobs are no longer the domain of the young; many of these jobs are being taken by adults in their prime working years Җ 25 to 54 years of age and many of them are single men and women without high-school diplomas. And the longer workers have been out of a job, the more likely they are to take a part-time job.
Faith in the American dream is eroding fast. Anger and alienation prevail. The feeling is that the rules aren֒t fair and the system has been rigged in favor of business and against the average person. The share of financial compensation and outputs going to labor has dropped from about 65 percent before 1980, down to under 60 percent today. Its shocking that for the first time in our countryҒs history, there is more social mobility in Europe than in the U.S.
Why is it that increases in labor productivity did not translate into higher household income in private employment? In the 1960s, only one in 20 American men between the ages of 25 and 54 was not working. According to former Treasury Secretary Larry Summers, in ten years that number will be one in seven. This is a burgeoning disaster. We have to cope with the fact that two-thirds of the jobs lost during this recession were middle-income jobs, while about half of those created have been in low-wage sectors such as tourism, hospitality, and retail sales with a great proportion of them temporary positions. Wage growth is far below what economists would expect at this stage of a recovery. America֒s concern is no longer a jobless recovery, but a high-wageless recovery.
There are 48 million people in the U.S. in low-wage jobs. Those workers wont be able to spend what is necessary in an economy that is mostly based on consumer spending, and this will put further pressure on private sector growth. What we have is a very high unemployment rate, a slow recovery, and across-the-board wage stagnation (except for the top few percent). Almost 91 million people over 16 years of age arenҒt working, a record. When Obama became president, that figure was 10 million less.
The great American job machine is spluttering. We are going through the weakest post-recession recovery the U.S. has ever experienced, with growth just half of what it has been in four previous recessions. And thats despite the most expansive monetary policy in history and the largest fiscal stimulus since the end of World War II.
That is why the June numbers are so distressing. Five years after the Great Recession, nearly 24 million working-age Americans remain jobless, working part-time involuntarily or having left the workforce completely. We are not in the middle of a recovery. We are in the middle of a muddle-through, and thereҒs no point in pretending the sky is blue when so many millions can attest it is overcast. And there is not much light on the horizon.
---
Truths and myths about the rise of part-time jobs
Aggregate demand is the problem, not Obamacare
By David Clay Johnston
Aljazeeri America
July 31, 2014
When the Bureau of Labor Statistics announced that 288,000 jobs had been added in June, critics cried foul. They said the news was misleading: The details showed a deteriorating job market, which many critics blamed on the Affordable Care Act requirement that employers provide workers with health insurance or risk prosecution or penalties
But an examination of the data tells an entirely different story about what has hobbled the recovery from the Great Recession, which started in December 2007 and ended in the summer of 2009.
June marked 52 consecutive months of job growth. However, the number of full-time jobs actually fell in June by more than 530,000 compared with May. Total jobs increased only because part-time jobs grew by about 800,000.
At first blush these numbers are alarming. But the details reveal a more nuanced, and in some ways more disturbing, picture.
Monthly job data are frequently revised. The initial job report for May has been revised upward by 7,000 jobs, the April report by 22,000 jobs. The June report will likely be revised, too.
Why revisions? The BLS rushes the report out just three or so days after the month is over. In addition, monthly data are volatile because of many factors, such as how many Sundays are in a month, when holidays fall and extreme weather events. Trend lines, not monthly snapshots, provide the best data. Monthly job reports should always be regarded as first rough drafts.
So let’s look at what’s happened to the mix of full-time and part-time jobs under President Barack Obama, including under the Affordable Care Act, which took effect only this year.
From his January 2009 inauguration through last month the total number of jobs increased by 6.8 million full-time jobs and just 387,000 part-time. That increase is smaller than the June figure because the number of part-time jobs fell earlier in his presidency.
But go back to 2000 or 2004 or 2007, the last peak year of the economy, and the picture is very different: Since 2007 full-time jobs are actually down by 1.6 million, while part-time jobs have grown by 2.7 million.
Most troubling of all, the number of people who want to work full-time but can find only part-time work shot up from 4.6 million in 2007 to 7.5 million last month. This involuntary part-time employment explains, statistically, the entire increase in part-time jobs in the last six-plus years.
Had we maintained the 2007 ratio of full-time to part-time jobs today, we would have 2.5 million more full-time jobs and 2.5 million fewer part-time jobs, according to my calculations from the official data. We would still need another roughly 7 million jobs to fulfill all the demand people have for work.
The shift to part-time work took place before Obamas policies had any effect and well before Congress passed the Affordable Care Act in March 2010.
Interpreting the numbers
So what do these numbers mean?
ғIt’s really straightforward why we have low employment now, said Heidi Shierholz, an economist at the nonprofit Economic Policy Institute, which looks out for the interests of workers. ԓBusiness executives and owners are smart. They will hire exactly the amount of labor needed to fulfill demand for their goods and services.
The ability to buy goods and services ԗ what economists call aggregate demand is down because average incomes are down. Tax returns show that average real income declined in 10 of the 12 tax years since 2000. In fact, average income is down for every income class, including the very top, compared with either 2000 or 2007.
Increasing incomes would certainly increase demand, which in turn would secure those 9 million more jobs sooner rather than later, alleviating human suffering and ending the waste of needlessly idle hands.
Given the insignificant increase in part-time work under Obama, even including the June data that are likely to be revised, the Affordable Care Act is not the reason we have so many part-time jobs.
But what about workers whose bosses tell them their hours are being cut because of דObamacare? Those employers are either ill informed or lying.
First, the data show clearly that the rise of part-time work, especially forced part-time, precedes any impact from the 2010 Affordable Care Act, which, again, did not take effect until this year.
Wait a minute, critics might say, employers who fail to buy health insurance for full-time workers face penalties and even prosecution. That is a widely told story, well known to those who get their information from demonstrably unreliable sources such as Rupert MurdochԒs Fox News and the opinion pages of his Wall Street Journal.
Yes, the law includes penalties, but it also bars enforcement.
Section 101 of the Affordable Care Act (page 131) says that in any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failureӔ and the government shall notӔ file a notice of lien or levy against the property of any taxpayer who fails to comply with the Affordable Care Acts health insurance mandate.
What can be done
Putting the Obamacare myths aside, the U.S. has a long-term problem of too few full-time and too many part-time jobs.
Solving that problem is actually simple: increase aggregate demand. The fastest, smartest and most economically beneficial way to do that is by investing immediately in fixing up our decaying infrastructure.
If you want more jobs both now and long-term, tell your senator and your representative to invest in AmericaҒs future especially in its roads, bridges and other infrastructure, the commonwealth property on which private wealth creation depends. Also tell them to stop cutting basic research budgets and start pouring money into laboratory work, where trained workers far outnumber available jobs.
As for the Affordable Care Act, on the basis of timing, law and logic it cannot be blamed for the problem of part-time jobs.
David Cay Johnston, an investigative reporter who won a Pulitzer Prize while at The New York Times, teaches business, tax and property law of the ancient world at the Syracuse University College of Law. He is the best-selling author of “Perfectly Legal,” “Free Lunch” and “The Fine Print” and editor of the new anthology “Divided: The Perils of Our Growing Inequality.”
Section Dying America •
View (0) comment(s) or add a new one •
Printable view • Link to this article •
Home •
Tuesday, July 22, 2014
Have The Long-Term Unemployed Become Dispensable?
Gotta love all those plans to get us back to work:
tax rules that allow companies to defer U.S. tax on their foreign income, and reducing the ability of companies to siphon profits they earn in the U.S. to overseas subsidiaries.
- WSJ - Tax breaks for shipping overseas definedcurrent tax law would allow a tax deduction for the costs of shutting down a U.S. operation.
if a plant moves at all, whether its from Ohio to Tennessee or Ohio to Malaysia, it is eligible for deductions.
When an American firm opens a foreign division, it typically sets up a separate company that does not pay U.S. taxes.
- Politifact - Rewards for shipping jobs overseasIt’s outrageous that workers are paying to ship their own jobs overseas through the tax code. We should be rewarding companies that are bringing jobs home. This is about jobs. I hope that all of our colleagues, regardless of party, will join our fight to give every American worker a fair shot to get ahead.
You really think to waste taxpayers money that American workers should pay the cost of the move when their jobs are being shipped overseas? Really?
- AFLCIO - Will Republicans voter to export US jobs?
---
Have The Long-Term Unemployed Become Dispensable?
By Cathy Smith
Bellingham Herald
July 21, 2014
MY DAUGHTER recently reentered the job market after tottering on the divide between the currently unemployed and the long-term unemployed. We both breathed a long sigh of relief following an extended and somewhat frightening wait that seemed to carry my daughter further away from that brass ring of employment with each passing day. Luckily, we would tell each other, she has the support of family, but what about those millions of other long-term unemployed and discouraged unemployed that arent so fortunate. What happens to them? It seems as if ever since emergency benefits were cut off abruptly and without warning in December that the long-term unemployed have been swallowed up by some invisible black hole.
In spite of the recent positive economic headlines, there are still nearly 3.4 million workers that have been out of work for six months or longer, the magic cutoff that places individuals in the category of the long-term unemployed. Who are these people? The only factor that distinguishes them from the short-term unemployed is the amount of time they have been out of work, but unfortunately it is this unidentified time that incites employers to keep their distance and adds more jobless time to the resumes of those remaining unemployed. Companies fear that time has robbed the long-term unemployed of their skills, leaving potential employers skittish. Only about 1 in 10 of the long-term unemployed get hired every year.
Add to the above numbers the discouraged workers, workers who have given up and ceased looking for work. The discouraged workers are not counted as part of the unemployed by the Labor Department as they no longer consider them a legitimate part of the labor force. This category particularly hits hard the high school and college graduates of the last five years. While skimming through headlines on the Internet, I discovered a blog for the Huffington Post written by a recent college graduate entitled “The Story of a Generation: We Are the Unhireables”. The author claims that we are creating a current generation of jobless Americans.
On the other end of the spectrum appears a portion of the 50 plus population who suddenly and unexpectedly find themselves out of work. They continue to draw from their savings, and often are simply forced into an early retirement that they are not prepared for financially or emotionally. According to the Huggington Post, a third of our total unemployment falls into the discouraged worker category.
Bad luck and poor economic timing caused the current economic epidemic. It’s not about lazy people looking for a hand out. It’s about people who want their dignity returned to them in the form of a job and are unable to find one because there aren’t enough jobs to go around, and too few employers willing to take a chance. During my daughter’s period of unemployment, she cut off her social life entirely because she was unable to face her friends without a job. It broke my heart to watch her daily sit at home stoically waiting for the phone to ring or an encouraging email to appear. Fortunately, she found an employer who appreciated her value and was willing to take a risk. Unemployment and financial incapacity is not a state of being that anyone voluntarily chooses.
So back to my earlier question, what happens to the long-term unemployed? According to a 2013 STUDY by the Urban Institute, a final consequence of long-term unemployment is poverty. 34.1 percent live in households below the poverty line. The rate for the discouraged workers is the highest at 40.9 percent and the newly unemployed are much lower at 23 percent. These statistics arise from the most powerful democracy in the world. We regularly send aid to countries in need, but we ignore our own poverty ridden unemployed. Shame on us.
Current headlines shout out our economic recovery - a new 6.1% national unemployment rate remains steady, but WHAT ABOUT the 3.4 plus million Americans who have been out of work for at least six months or more with little prospects of finding a job. Have the long-term and discouraged workers been totally forgotten? It’s like a horror story. Its as if we have thrown them away, as if 3.4 plus million people are dispensable. Where is the stimulus package, the combination of job stimuli and emergency unemployment benefits that the U.S. Senate and House once aired out? Where is the compromise necessary to save our FORGOTTEN CITIZENS?
Cathy Smith is a retired teacher from Rochester School District, and a member of The OlympianҒs 2014 Board of Contributors. She maybe reached at smith_cathy23 at yahoo.com.
Section Dying America •
View (0) comment(s) or add a new one •
Printable view • Link to this article •
Home •
Monday, July 21, 2014
For Job Seekers Who’ve Tried Everything
7 practical ideas if you think you’ve exhausted your job-search options
By Marty Nemko
AOL Jobs
July 13, 2014
Ben has reason to be depressed. Laid off twice, not sure how strong a reference his ex-boss will give him, he’s 50 years old and overweight, been job-hunting for eight months, having gotten a total of three interviews and batting 0 for 3. He blames it on his having mainly soft skills, a widely held skill-set.
His wife, too, is struggling despite great credentials. She’s tried to snag a full-time college teaching job but the best she’s ever landed has been a part-time community college instructor position, with no benefits. She said, “It’s ironic that I teach a class in which I champion worker rights yet my own employer pays me what ends up being little more than minimum wage and hires me for 49 percent of the time to avoid paying benefits.”
At 50, they feel the need to pay for health insurance. They’re behind on their rent and their landlord is making eviction noises. Ben has networked, answered countless ads, even cold-called employers that are not advertising a job, all to no avail. He feels he’s run out of options. He’s beyond depressed; he’s thought of suicide.
Indeed, the SUICIDE RATE among middle-aged people is up 30 percent between 1999 and 2010, more than the number that die in car accidents, with men being more than three times as likely to kill themselves. While there are many causes, the researchers specifically cite the economic downturn and resulting financial stress.
But long-term unemployed job seekers have more options than they may think, and Ben and his wife could try some of these approaches:
1. Circle back. The odds of your network having a job lead for you at any given moment is tiny. If it’s been more than a month, circle back to everyone. Here’s sample wording you can use to check in with a contact:
“Susie, I appreciate your having offered to keep your ears open for me. By any chance, is there someone you think I should talk with? If you’ll recall, I’m looking for a people, or project, management job, especially in the health care or environmental space but I’m flexible. I’m even open to a launchpad job, one that’s lower-level but when I prove myself, I could move up.”
If your contact doesn’t have a lead for you, ask, “Would you mind continuing to keep you ears open, and if I’m still looking in a month, may I circle back to you?”
2. Change job targets. Perhaps you’ve been overreaching. If so, maybe you should you drop down your search, say from management to individual contributor positions. Have you been pursuing a job in a field with too few openings or with great competition? For example, sexy fields like the environment, entertainment, biotech, fashion, and journalism tend to be tougher than, for example, the transportation, food, or housing industries.
3. Consider interim jobs. Sitting at home may make you more depressed. So you might want to apply for jobs where the employer would be lucky to have you. Even some low-level jobs can be quite enjoyable. Here are a few ways job seekers can match their interests to a position while they look for something more challenging or better paying:
Sports fans might enjoy selling beer and hot dogs at the
Book lovers might enjoy working at a bookstore or in a library, even if just shelving books
Fashionistas might enjoy working at a favorite boutique or department storePlant lovers might try landscaping or garden maintenance
Cafe lovers might seek a job as a waitperson or even busser
The most fun job I ever had was as a New York City cab driver. I got to meet all sorts of people, I enjoyed driving and I got to double-park when I wanted to grab a great slice of pizza.
4. Walk in. If someone phoned you asking if you wouldn’t mind taking care of a newborn temporarily, you might well say no. But if the doorbell rang and there was a cradle with a newborn, wouldn’t you be more likely to take it in?
The same is true of job seekers. It’s easy to say “no” to a voice on the phone and or ignore an email. It’s harder to brush away a flesh-and-blood human being, especially one who politely asks for help. That probably won’t work at a large organization where there’s a phalanx of security to keep you out but, for example, in an office building in which many businesses have an office, it might be worth going door-to-door.
Imagine how you’d feel if you were the receptionist and someone walked in and said, for example:
“I’m an accountant or I should say I was. Although I got good evaluations, I got laid off. So I’m looking for a job. I know the standard way is to answer ads but I live near here and so I thought I’d drop in and see if I could get some advice and maybe even an interview. I’m wondering if you might allow me to speak with someone?”
Is it not possible you’d say “yes?” Certainly, if you’re a job seeker, you have nothing to lose. You can survive no. You can survive 20 nos. And all you need is one decent job offer.
5. Start a low-cost business. At least as an interim, you could start a service business with near-zero startup costs. Examples:
Relationship ad consultant. Help people craft their matchmaking ad - how they describe themselves and the sort of partner they’re looking for, then take photos likely to attract their desired type of partner.
Grief coach. People who lose a loved one, even a pet, may want support in getting past their sadness. They may not need a psychotherapist. They may just need a good listener who’s gently encouraging.
Sports tutor. Many high school athletes want to up their game, to compete better or perhaps to win a college sports scholarship. And parents will spend to boost their child’s chances.
6. Find support. For some people, support is the only thing that keeps them from giving up. Here are some options:
Ask a friend to check in daily or weekly with you on your job search.
Join a job-search support group. Here’s a link to a directory of them.
Seek faith-based support. It helps some people to surrender some control to a higher power. They feel, “If I’m doing my part and still am not finding a job, maybe it’s God’s will. When God decides it’s time, I’ll land a job, perhaps a better one than I would have gotten earlier.”
7. Practice persistence. It’s cliche but true that even the most successful people fail and usually have failed a lot. The key is HOW THEY RESPOND to FAILURE: curl up in bed or be resilient. Here are a few quotes that may drive that home:
“Ambition is the path to success. Persistence is the vehicle you arrive in.”
- Bill Bradley“When you feel tired, it means you’ve tried. It doesn’t mean you quit trying.”
- Constance Chuks Friday“I tried and failed. I tried again and again and succeeded.”
- Epitaph on Gail Borden’s gravestone.“To make our way, we must have firm resolve, persistence, tenacity. We must gear ourselves to work hard all the way. We can never let up.”
- Ralph Bunche“Nothing in this world can take the place of persistence. Talent will not: nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent.”
- Calvin Coolidge
I can leave you with no better advice.
Marty Nemko blogs for AOL JOBS and PSYCHOLOGY TODAY. He is in his 25th year as host of Work with Marty Nemko on KALW-FM (NPR-San Francisco.) His most recent books are: How to Do Life: What They Didn’t Teach You in School and What’s the Big Idea? 39 Disruptive Proposals for a Better America. Read more from Marty Nemko HERE.
Section Dealing with Layoff • Section Job Hunt •
View (0) comment(s) or add a new one •
Printable view • Link to this article •
Home •
