Unemployment Rate Raises Big Questions

The Bureau of Labor Statistics (BLS) publishes each month’s report of employment/unemployment the first few days of each succeeding month. Following are comments about the data in the February report.

From January to February 2013, 165,000 people were added to the civilian (noninstitutional) population while the civilian labor force contracted by 130,000. This means that the participation rate of the available population continues shrinking; for every 1% of reduced participation approximately 1.5 million workers vanish from the workforce. Reasons for this negative change in available workers may be loss of jobs, part-time employment completed, discouraged workers and/or career welfare recipients. The English poet Philip Larkin once made this testy remark, “The only way to eliminate unemployment is to eliminate unemployment benefits.”

A disappointing aspect of this jobs report is that minorities continue to lag in employment. Although the national unemployment rate tweaked down to 7.7%, unemployment among Blacks remains high at 13.8% while unemployment among Hispanics is 9.6%. Asians, on the other hand are unemployed at a rate of 6.1%, somewhat better than the national average.

Surveys regarding job training for low-wage workers, accounting for 65% of the new jobs added over the past four years were reported recently. According to these reports, low-wage workers are not taking advantage of employer training programs. Two thirds of employers surveyed said they offered coaching/mentoring programs and 61% said that on-the-job training was available. Only 36% of the employees knew these programs existed. About 80% of the employers in the surveys rated education as important while just 41% of the low-wage workers felt training was critical. A study developed in 2010 indicated that less than 60% of the jobs advertised were filled, partly because of the lack of skills related to available positions.

President Obama is pressing Congress to raise the minimum wage from $7.25 to $9.00, assuming the increase will help those who hold low-paying jobs.  Employers who hire hamburger flippers and other low-paying positions may adopt an opposing notion of the proposed higher wages by postponing hiring or even cutting back on employment.  Consider that teenagers 16 to 19 years of age are currently enduring an unemployment rate of 25.1%.

As we should expect, achievement of higher levels of education influences employment. For example, workers without a high school diploma currently have an unemployment rate of 11.2%, high school grads are at 7.9%, associate degrees/some college have a 6.7% rate of unemployment and just 3.8% are unemployed when they are holders of bachelor’s degrees or higher.

There are job classifications that offer greater opportunities for employment than others; jobs in construction, manufacturing and education are lagging while jobs in trade, transport, utilities, leisure/hospitality and healthcare are increasing. People with college degrees are more likely to find jobs in computer science, accounting, market research/analysis and engineering. Geography is an important component in the search for employment.  Jobs are more available in some states than others. An Internet blog posted in September of 2012 indicated that North Dakota, Arizona, Florida, Texas and Nevada were forecast to have the highest job growth in 2013.

In spite of the high unemployment rate, there are 143 million U.S. citizens working yet more than 12 million in the workforce without jobs. For the unemployed, the jobless rate is 100% and for the employed, the rate is 0%. Remember these important principles: Welfare is not a career; Education, training and self-improvement will help in a job search; There are 12 times as many people employed (92.3%) as there are unemployed (7.7%). The following quote is attributed to William W. Ward: “Accepting government aid is like taking drugs – pleasant at first, habit-forming later, damning at last.”

– Dick Baynton

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