Yesterday, Fox News reported that Starbucks will create 700,000 jobs. The company will spend $581 million on these jobs, which range from restaurant workers to senior managers.
This will have a material impact on the unemployment number. You'll see it go down. It really doesn't mean that the situation will have changed much. There are still 14 million Americans who are not working.
Showing posts with label "Jobless Recovery". Show all posts
Showing posts with label "Jobless Recovery". Show all posts
Tuesday, April 5, 2011
Monday, March 21, 2011
Where have all the jobs gone?
We're all wondering...
Where have all the jobs gone?
In the last 10 years, the United States has lost 1/3 of its manufacturing jobs. We know that many of them have been outsourced and moved off-shore. They've gone to India, China, Malaysia, and Mexico. And, they're not coming back.
Some have been lost to automation, computers, technology. Recently I had a client who was working on a manufacturing line whose job was replaced by...a robot.
It's not just manufacturing jobs that are disappearing.
14 million people are unemployed in this country, giving us an official unemployment rate of 8.9%, according to the Bureau of Labor Statistics March report.
We also know that this statistic, as horrible as it seems, represents an under-reporting of the real situation. That's why the Department of Labor has engineered a new statistic -- the Underemployment Rate -- which includes the "discouraged" workers, those who have given up looking for a job and have fallen off the unemployment rolls because of chronic long-term employment and the "underemployed," those people who have taken part-time jobs or projects because they are unable to find a full-time position.
The underemployment rate is 20%, or 1 in 5 workers.
That's pretty bad. One in five American workers can't find an appropriate full-time position. Is that because we are still in the Great Recession, or is there another explanation? Is there a silver lining amidst all this dire economic news? I believe so.
Stay tuned for tomorrow's post...
Where have all the jobs gone?
In the last 10 years, the United States has lost 1/3 of its manufacturing jobs. We know that many of them have been outsourced and moved off-shore. They've gone to India, China, Malaysia, and Mexico. And, they're not coming back.
Some have been lost to automation, computers, technology. Recently I had a client who was working on a manufacturing line whose job was replaced by...a robot.
It's not just manufacturing jobs that are disappearing.
14 million people are unemployed in this country, giving us an official unemployment rate of 8.9%, according to the Bureau of Labor Statistics March report.
We also know that this statistic, as horrible as it seems, represents an under-reporting of the real situation. That's why the Department of Labor has engineered a new statistic -- the Underemployment Rate -- which includes the "discouraged" workers, those who have given up looking for a job and have fallen off the unemployment rolls because of chronic long-term employment and the "underemployed," those people who have taken part-time jobs or projects because they are unable to find a full-time position.
The underemployment rate is 20%, or 1 in 5 workers.
That's pretty bad. One in five American workers can't find an appropriate full-time position. Is that because we are still in the Great Recession, or is there another explanation? Is there a silver lining amidst all this dire economic news? I believe so.
Stay tuned for tomorrow's post...
Friday, January 8, 2010
First Friday -- Unemployment Numbers
Hot off the press...
According to MSNBC: Economy Sheds More Jobs Than Expected
Nation lost 85,000 jobs in December; unemployment rate flat at 10 percent
Let's talk about what this means, find our own interpretation, and challenge the explanations of the "experts." Certainly, it doesn't look good when we "lost" 85,000 jobs in December. Traditionally, the holiday season has been a great time for seasonal hiring in retail, which usually creates a kind of spike in "job creation." But, we lost jobs. So, what does it all mean?
"The economy lost more jobs than expected in December while the unemployment rate held steady at 10 percent, as a sluggish economic recovery has yet to revive hiring among the nation's employers. "
The question is: why did the economy "lose" more jobs than expected in December when the economic indicators point to improving conditions? No one seems to know. That's why experts have coined the term "jobless recovery." As you know from what I've written before, I believe that we "lost" more jobs because not only are jobs disappearing, but because the whole concept of a job, as a way to package up work, a form of work, is disappearing. Jobs are devolving, unraveling, into project-based work.
Next, we read that "the unemployment rate held steady at 10 percent...followed by the explanation that "a sluggish economic recovery has yet to revive hiring among nation's employers." The assumption is that along with an economic recovery comes an increase in job creation. That makes sense. Economic conditions improve, businesses get more orders, need to hire more people to fulfill the orders to make the products, and so begin to start hiring again.
Except that we don’t really make a lot of things any more. We have moved away from predominantly a manufacturing-based economy to service-oriented economy. We continue to offshore our manufacturing jobs, and, in fact, have lost one-third of this country’s manufacturing jobs since the year 2000. That’s incredible. These jobs are not coming back, no matter how great the economy gets.
We need to watch the tendency to interpret data through a traditional lens, trying to make sense of data points as though they were static, without taking into account the shifting social and economic landscape swirling around us. We need to look at economic indicators within the context of change. Statisticians have a propensity and preference for benchmarking data points against markers from the past, called past predictors, but this method doesn’t work in a dynamic marketplace where the past is no predictor of the future.
Why aren't jobs being created? Let’s suppose that even within a service economy, there is plenty of work that needs to be done...but it's not getting packaged up in terms of jobs. There are large disincentives for employers to create new jobs, the largest of which is cost. It's expensive to create jobs. Typically, it costs an employer 38% above a new hire’s salary just to provide benefits, most of which is health care cost. And, that number doesn’t take into account the rising costs of unemployment and other types of insurance.
Bottom-line: employers are not in the position to create jobs. It's too dang expensive. It’s easier to hire temp workers. And, that’s not necessarily a bad thing.
"The Labor Department said Friday that employers cut 85,000 jobs last month, worse than the 8,000 drop analysts expected."
Why are employers continuing to cut jobs? One reason is that business credit continues to be tight, despite what you hear from Washington.
Banks aren't lending, and even if they want to lend, they are being prevented from doing so by overzealous regulators who have been given orders rigidly to enforce existing rules and procedures, a kind of over-reaction to lax regulation of the past, and without taking into consideration the exigencies of the present. While this may sound good because we need strong enforcement of existing regulation, it's not. What this means is that banks cannot be flexible with their customers and are foreclosing on customers who have just hit a "tight corner" on liquidity and need some flexibility. More on this tomorrow...
Against this credit backdrop, to prevent bankruptcy and cash flow problems, companies are being forced to cut expenses, drastically, just to stay alive. One strategy is to cut back on employees' hours. The average American work week has been reduced to something like 33 hours. If more severe measures are needed, employers are being forced to cut jobs, which usually include benefit packages costing 38% over salary costs. Wouldn't you eliminate a job and hire a part-time person, at a lower cost and with no benefits, in order to keep your company afloat?
"A sharp drop in the labor force, a sign more of the jobless are giving up on their search for work, kept the unemployment rate at the same rate as in November. Once people stop looking for jobs, they are no longer counted among the unemployed. "
Gee, this is interesting. Most people I know don't just "give up" in their search for work. They are unable to find work, usually because they can't find jobs that were similar to the ones they left. This is true for two categories of workers: 1) skilled manufacturing jobs, people who worked on a manufacturing line that moved offshore. These jobs aren't coming back and until we start getting the "green" jobs funded -- solar energy, natural gas exploration and "green" construction, there won't be much employment, and even then, these jobs will be limited. 2) Middle level management, white collar workers whose jobs either have been eliminated permanently as companies go leaner in their management structure, or whose jobs have been replaced by skilled workers overseas in Dublin, Mumbai and Singapore. These people are in a bind as they are overqualified for the jobs that are being created -- at Taco Bell, Wal-mart and Chucky Cheese. It's no wonder that they appear to "drop out" of the job market.
Despite the dire picture…it’s not all bad news. It’s just gonna look a whole lot different from before. Keep reading to find out how to uncover opportunities today...
According to MSNBC: Economy Sheds More Jobs Than Expected
Nation lost 85,000 jobs in December; unemployment rate flat at 10 percent
Let's talk about what this means, find our own interpretation, and challenge the explanations of the "experts." Certainly, it doesn't look good when we "lost" 85,000 jobs in December. Traditionally, the holiday season has been a great time for seasonal hiring in retail, which usually creates a kind of spike in "job creation." But, we lost jobs. So, what does it all mean?
"The economy lost more jobs than expected in December while the unemployment rate held steady at 10 percent, as a sluggish economic recovery has yet to revive hiring among the nation's employers. "
The question is: why did the economy "lose" more jobs than expected in December when the economic indicators point to improving conditions? No one seems to know. That's why experts have coined the term "jobless recovery." As you know from what I've written before, I believe that we "lost" more jobs because not only are jobs disappearing, but because the whole concept of a job, as a way to package up work, a form of work, is disappearing. Jobs are devolving, unraveling, into project-based work.
Next, we read that "the unemployment rate held steady at 10 percent...followed by the explanation that "a sluggish economic recovery has yet to revive hiring among nation's employers." The assumption is that along with an economic recovery comes an increase in job creation. That makes sense. Economic conditions improve, businesses get more orders, need to hire more people to fulfill the orders to make the products, and so begin to start hiring again.
Except that we don’t really make a lot of things any more. We have moved away from predominantly a manufacturing-based economy to service-oriented economy. We continue to offshore our manufacturing jobs, and, in fact, have lost one-third of this country’s manufacturing jobs since the year 2000. That’s incredible. These jobs are not coming back, no matter how great the economy gets.
We need to watch the tendency to interpret data through a traditional lens, trying to make sense of data points as though they were static, without taking into account the shifting social and economic landscape swirling around us. We need to look at economic indicators within the context of change. Statisticians have a propensity and preference for benchmarking data points against markers from the past, called past predictors, but this method doesn’t work in a dynamic marketplace where the past is no predictor of the future.
Why aren't jobs being created? Let’s suppose that even within a service economy, there is plenty of work that needs to be done...but it's not getting packaged up in terms of jobs. There are large disincentives for employers to create new jobs, the largest of which is cost. It's expensive to create jobs. Typically, it costs an employer 38% above a new hire’s salary just to provide benefits, most of which is health care cost. And, that number doesn’t take into account the rising costs of unemployment and other types of insurance.
Bottom-line: employers are not in the position to create jobs. It's too dang expensive. It’s easier to hire temp workers. And, that’s not necessarily a bad thing.
"The Labor Department said Friday that employers cut 85,000 jobs last month, worse than the 8,000 drop analysts expected."
Why are employers continuing to cut jobs? One reason is that business credit continues to be tight, despite what you hear from Washington.
Banks aren't lending, and even if they want to lend, they are being prevented from doing so by overzealous regulators who have been given orders rigidly to enforce existing rules and procedures, a kind of over-reaction to lax regulation of the past, and without taking into consideration the exigencies of the present. While this may sound good because we need strong enforcement of existing regulation, it's not. What this means is that banks cannot be flexible with their customers and are foreclosing on customers who have just hit a "tight corner" on liquidity and need some flexibility. More on this tomorrow...
Against this credit backdrop, to prevent bankruptcy and cash flow problems, companies are being forced to cut expenses, drastically, just to stay alive. One strategy is to cut back on employees' hours. The average American work week has been reduced to something like 33 hours. If more severe measures are needed, employers are being forced to cut jobs, which usually include benefit packages costing 38% over salary costs. Wouldn't you eliminate a job and hire a part-time person, at a lower cost and with no benefits, in order to keep your company afloat?
"A sharp drop in the labor force, a sign more of the jobless are giving up on their search for work, kept the unemployment rate at the same rate as in November. Once people stop looking for jobs, they are no longer counted among the unemployed. "
Gee, this is interesting. Most people I know don't just "give up" in their search for work. They are unable to find work, usually because they can't find jobs that were similar to the ones they left. This is true for two categories of workers: 1) skilled manufacturing jobs, people who worked on a manufacturing line that moved offshore. These jobs aren't coming back and until we start getting the "green" jobs funded -- solar energy, natural gas exploration and "green" construction, there won't be much employment, and even then, these jobs will be limited. 2) Middle level management, white collar workers whose jobs either have been eliminated permanently as companies go leaner in their management structure, or whose jobs have been replaced by skilled workers overseas in Dublin, Mumbai and Singapore. These people are in a bind as they are overqualified for the jobs that are being created -- at Taco Bell, Wal-mart and Chucky Cheese. It's no wonder that they appear to "drop out" of the job market.
Despite the dire picture…it’s not all bad news. It’s just gonna look a whole lot different from before. Keep reading to find out how to uncover opportunities today...
Thursday, December 31, 2009
"Jobless Recovery": Your Interpretation...and Mine
Yesterday I told you about an NPR radio show, where comments were made about the "jobless recovery." Three observations were shared, along with the traditional, conventional interpretations, which I shared with you. I asked you to examine the statements and asked you to come up with some of your own.
Here are the statements and follow up questions:
1. Economists are reporting positive indications of an improving economy, while unemployment statistics are still grim, leading to the term "jobless recovery". If the economy is improving, why are few or no jobs being created?
It's expensive to hire someone new. Did you know that it costs an employer 38% over and above an employee's salary to provide benefits? That's expensive. Companies don't want to commit that kind of money when they don't have to. Unemployment insurance is becoming more expensive. That's another cost. And for many employers, there are additional headaches that come with bringing on new employees. Once an employer has hired someone new, it becomes difficult to let that person go -- legally and financially. These are just some of the disincentives for additional hiring. But there is another reason.
According to an article in the Chicago Tribune, this country has lost 1/3 of its manufacturing jobs since the year 2000. Those jobs have moved offshore -- and they are not coming back.
The good news is that there is plenty of work that needs to be done: it's just getting packaged up differently. Fewer jobs, plenty of work. Why? Because jobs are devolving into projects. There has been an astronomical rise in the amount of project-based work that's available in the marketplace, upwards of 50% of work available.
The good news is that jobs, which we measure, aren't being created, but projects are. Let's start taking stock of project-based work. In America, work has always meant having a job. Maybe we need to start thinking differently about work in this country.
2. While some people are getting jobs, the long-term unemployed (defined as being unemployed over 6 months) are having the toughest time finding jobs.
My take? Because the jobs -- and specifically, the types of jobs -- we are losing are not coming back. Those factory line jobs, from Detroit to Dubuque, are not coming back and those who lost their jobs 2 years ago are still not able to find part-time or project-based manufacturing work. When the green jobs movement gets traction, this statistic will change as folks get retrained.
3. Statistics point to a surge in temporary hiring, and that this surge is used as an early indicator for rising employment.
Conventional wisdom says that a surge in temporary hiring is a predictor for the creation of new jobs as employers take on new workers on a trial basis, with the intention of moving them to full-time if they "prove out." I disagree. I just don't see the incentive for companies, big or small, Fortune 500 to mom-and-pop, to hire full-time workers in packages called jobs. Why should they create jobs when it is so easy to to hire "just-in-time-workers" on a temporary basis?
This surge in temporary employment is consonant with the rise in project-based work.
Your thoughts?
Here are the statements and follow up questions:
1. Economists are reporting positive indications of an improving economy, while unemployment statistics are still grim, leading to the term "jobless recovery". If the economy is improving, why are few or no jobs being created?
It's expensive to hire someone new. Did you know that it costs an employer 38% over and above an employee's salary to provide benefits? That's expensive. Companies don't want to commit that kind of money when they don't have to. Unemployment insurance is becoming more expensive. That's another cost. And for many employers, there are additional headaches that come with bringing on new employees. Once an employer has hired someone new, it becomes difficult to let that person go -- legally and financially. These are just some of the disincentives for additional hiring. But there is another reason.
According to an article in the Chicago Tribune, this country has lost 1/3 of its manufacturing jobs since the year 2000. Those jobs have moved offshore -- and they are not coming back.
The good news is that there is plenty of work that needs to be done: it's just getting packaged up differently. Fewer jobs, plenty of work. Why? Because jobs are devolving into projects. There has been an astronomical rise in the amount of project-based work that's available in the marketplace, upwards of 50% of work available.
The good news is that jobs, which we measure, aren't being created, but projects are. Let's start taking stock of project-based work. In America, work has always meant having a job. Maybe we need to start thinking differently about work in this country.
2. While some people are getting jobs, the long-term unemployed (defined as being unemployed over 6 months) are having the toughest time finding jobs.
My take? Because the jobs -- and specifically, the types of jobs -- we are losing are not coming back. Those factory line jobs, from Detroit to Dubuque, are not coming back and those who lost their jobs 2 years ago are still not able to find part-time or project-based manufacturing work. When the green jobs movement gets traction, this statistic will change as folks get retrained.
3. Statistics point to a surge in temporary hiring, and that this surge is used as an early indicator for rising employment.
Conventional wisdom says that a surge in temporary hiring is a predictor for the creation of new jobs as employers take on new workers on a trial basis, with the intention of moving them to full-time if they "prove out." I disagree. I just don't see the incentive for companies, big or small, Fortune 500 to mom-and-pop, to hire full-time workers in packages called jobs. Why should they create jobs when it is so easy to to hire "just-in-time-workers" on a temporary basis?
This surge in temporary employment is consonant with the rise in project-based work.
Your thoughts?
Wednesday, December 30, 2009
"Jobless Recovery": Traditional Interpretations
It’s almost 2010…what’s ahead?
Last night, as I was driving along a country road, I listened to a program on NPR. They were talking about the “jobless recovery.”
What is a “jobless recovery”? It seems to be a situation where the economic indicators are improving, while unemployment numbers remain unchanged, or worse, on the rise.
There were 3 statements that I would like for you to consider:
According to the guest, there seems to be a dichotomy between the economists, who measure the state of the economy by looking at certain metrics, and politicians, who tend to evaluate it based on what they hear from their constituents, many of whom are still unemployed. Economists look at traditional statistical data such as: the GDP (gross domestic product, the dollar value of all goods and services produced in the US in a year), CPI (consumer price index, tracking the prices of certain products, housing starts, the stock market, and tell us that things are improving. Politicians tell us that many of their constituents are still unemployed. (In fact, we've lost 11 million jobs during this recessionary time.) That's why we have the term "jobless recovery."
Seems like a contradictory term to me. Why is that? Why are there no jobs or few jobs being created while the economy is showing signs of recovery? Why are economists seeing one thing and politicians another? Why the difference?
The second fact reported was that while some people are getting jobs, the long-term unemployed (defined as being unemployed over 6 months) are having the toughest time finding jobs. This may seem obvious as the longer one is unemployed, conventional wisdom has it, the more difficult it becomes, and there are some people in the job market who are simply "unemployable." But, this time around, this group is having an even more difficult time, than the long time unemployed during other recessions.
Again, my question to you: why are those people in the longest unemployed group having the most difficult time ever finding jobs, and more difficult than ever before?
Finally, the third point: statistics point to a surge in temporary hiring, and that this surge is used as an early indicator for rising employment.
My question is: what is the meaning of a surge in temporary hiring? Is it predictive? Is it good news, or not?
I wanted to pose these questions to you in an effort to get you to think about the employment situation and unemployment statistics. I have given you three sets of facts to consider. What is the "correct" interpretation of these facts?
The current interpretations are mostly based on conventional wisdom, and looking at the data through a traditional lens. I will share these with you tomorrow. In the meantime, I would like to encourage you to think it through for yourself. Developed critical thinking is one of the two most important skills for the next decade. Practice this ability and create your own interpretation.
And, I'll be back tomorrow... :o)
Last night, as I was driving along a country road, I listened to a program on NPR. They were talking about the “jobless recovery.”
What is a “jobless recovery”? It seems to be a situation where the economic indicators are improving, while unemployment numbers remain unchanged, or worse, on the rise.
There were 3 statements that I would like for you to consider:
According to the guest, there seems to be a dichotomy between the economists, who measure the state of the economy by looking at certain metrics, and politicians, who tend to evaluate it based on what they hear from their constituents, many of whom are still unemployed. Economists look at traditional statistical data such as: the GDP (gross domestic product, the dollar value of all goods and services produced in the US in a year), CPI (consumer price index, tracking the prices of certain products, housing starts, the stock market, and tell us that things are improving. Politicians tell us that many of their constituents are still unemployed. (In fact, we've lost 11 million jobs during this recessionary time.) That's why we have the term "jobless recovery."
Seems like a contradictory term to me. Why is that? Why are there no jobs or few jobs being created while the economy is showing signs of recovery? Why are economists seeing one thing and politicians another? Why the difference?
The second fact reported was that while some people are getting jobs, the long-term unemployed (defined as being unemployed over 6 months) are having the toughest time finding jobs. This may seem obvious as the longer one is unemployed, conventional wisdom has it, the more difficult it becomes, and there are some people in the job market who are simply "unemployable." But, this time around, this group is having an even more difficult time, than the long time unemployed during other recessions.
Again, my question to you: why are those people in the longest unemployed group having the most difficult time ever finding jobs, and more difficult than ever before?
Finally, the third point: statistics point to a surge in temporary hiring, and that this surge is used as an early indicator for rising employment.
My question is: what is the meaning of a surge in temporary hiring? Is it predictive? Is it good news, or not?
I wanted to pose these questions to you in an effort to get you to think about the employment situation and unemployment statistics. I have given you three sets of facts to consider. What is the "correct" interpretation of these facts?
The current interpretations are mostly based on conventional wisdom, and looking at the data through a traditional lens. I will share these with you tomorrow. In the meantime, I would like to encourage you to think it through for yourself. Developed critical thinking is one of the two most important skills for the next decade. Practice this ability and create your own interpretation.
And, I'll be back tomorrow... :o)
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