Posting in Cities
Unemployment and underemployment remain persistently high, while at the same time, jobs go begging at companies across the world. Why the disconnect? This weird gap keeps growing.
Last fall, we pondered the question of why unemployment remains so persistently high, while at the same time, openings at companies are reaching all-time highs.
This weird gap persists. The official current unemployment figure, calculated by the US Department of Labor, stands at 9%, and the estimate including discouraged and underemployed workers is at about 16%.
However, corporate job listings are going strong, and corporate layoffs are at their lowest levels in a decade. The US Labor Department reported as of November, the latest month data is available, there were 3.2 million job openings across the country. The last peak was 4.8 million in the first half of 2007, BLS says. Monster.com just said that the U.S. Monster Employment Index recorded another month of positive year-over-year growth during January with a growth rate of seven percent. In addition, all 28 metro markets record positive annual growth last month.
In the meantime, Challenger, Gray & Christmas, which has been tracking corporate downsizings since the early 1990s, said January's pace of job cuts was a record low for the month. "The slow pace of downsizing that marked the second half of 2010 appears to be continuing into 2011, as employers announced plans to cut 38,519 jobs in January," the consultancy says.
The Washington Post's Michael Fletcher recently visited the city of Fresno, California, and saw the paradox in action, with high unemployment amidst growing skills shortages:
"This city is grappling with one of the most troubling contradictions of the new economy: Even as it has one of the nation's highest unemployment rates, it has thousands of job openings.... Unemployment hovers at 16.9 percent, but managers at the 7,000-employee Community Medical Centers say they cannot find enough qualified technicians, therapists, or even custodians willing and able to work with medical waste."
The Post article blames the recession, exacerbated by structural changes in the economy, which requires greater technology skills and specialization. Many of the workers who lost their jobs in the recent downturn may lack or have lost their edge with skills needed coming out of the recession:
"Switching fields often isn't as simple as taking a class or two. In the coming years, the nation's workforce is going to need many more workers with college degrees and industry certifications, according to a report last year by Georgetown's workforce center."
In the case of Fresno, there are up to 60 companies that make highly specialized products, from "irrigation components that provide exact water flows, allowing uniform crops with minimum water use. The region is also a center for filtering and other control systems for all types of liquids." Those companies have always struggled to find qualified employees, the Post adds, noting this puts many at a competitive disadvantage.
Fresno is a microcosm, and companies across the world that are unable to recruit the talent they require will suffer in a hyper-competitive marketplace. This has become the number-one concern of CEOs, as cited in the recent PricewaterhouseCoopers survey on competitiveness.
The question is: how to resolve this disconnect -- a large pool of unemployed and underemployed people on one side, and companies starving for skilled talent on the other. The Post article says many schools and community programs intended to update skills are underfunded and lagging.
Employers, educational institutions, and policymakers needs to recognize that the economy has changed dramatically, even just in the three years since the downturn began. As the economy accelerates into growth mode — and it will — companies are going to be hurting for talent to enable them to compete in a hyper-competitive global economy. The skills shortage is growing, even in the midst of a period of high unemployment. Imagine how things will tighten up as unemployment drops. Training, retraining and lifelong learning are more urgent priorities than ever before.
Feb 4, 2011
Many employers are advertising jobs that don't actually exist. They get 1000s of resumes, interview dozens of candidates, then keep a few winners "in their pockets," just in case somebody quits or is fired. You might get hired this way, but there will likely be a LONG delay between applying and getting hired. But from the employer's point of view, it's a great system. An opening develops, BAM! you've got a replacement. And it sends a powerful message to all the other employees: you're easily replaceable.
Please note that at no time in my post did I bash Denmark. In point of fact my family is only 3 generations removed from Demark. My point in the post was that Denmark has studied this matter in depth. Based on those studies they shortened the amount of time people could stay on government funded unemployment insurance. And the effect of shortening the time was a shortened average time on unemployment. The cause and effect relationship they saw during their studies and proved after making the changes is that many people will stay unemployed as long as they get benefits. US states with generous unemployment benefits have seen higher unemployment rates during this downturn. Facts that on the surface, back up Demarks studys. New Hampshire has an interesting program. If a person on unemployment gets a job they continue to receive unemployment benefits during the first 6 weeks. If the person quits the job or gets fired during those 6 weeks their time on benefits does not restart. Correcting a common abuse in many other states. If they are fired they risk losing their unemployment benefits because they are now unemployed by their own hand. It is all about appropriate personal responsibility being placed on the unemployed person.
Methods of job hunting is the US are unrefined. Most job leads come from friends or family, but folks persist in thinking that newspapers or an online site will throw a job in their laps. Geographic location is often ignored. I wonder how many jobs, the very same jobs, are passed by commuters every day. In both directions! Liz Ryan is an employment specialist helping job seekers to find jobs without throwing a thousand resumes into a "black hole." Find ASKLIZRYAN on Yahoo groups. I studied Vocational Guidance and Counselling for a while and its pitiful that such an important activity is so poorly understood and job seekers are abandoned. To the Denmark-bashing writer, correlation does not imply cause/effect, no matter how satisfying it is to imagine so.
The state of MA only puts some of their programs online. Do you know you can get a free used car from the state if you do not own a vehicle and become unemployed? Do you know the state will pay for your first years car insurance under that program? Do you know the state paid unemployment councilors have been caught telling people to sell their cars before they apply for unemployment benefits so they can pocket the money and qualify for the free used car? Do you know that people on unemployment in MA qualify for a free cell phone with unlimited calling and text plans so they can be contacted for job interviews? Do you know people can qualify for more cash benefits if they are a minority? Regardless of work history or previous pay levels. The unbridled race based socialism in MA is pathetic.
@Hates Idiots Great advice on volunteerism, thank you. And getting involved with professional or user groups related to your profession is a great investment of downtime as well.
Interesting claim regarding unemployment benefits in MA. Here are the official numbers and rules, per the Executive Office of Labor and Workforce Development (EOLWD) at mass.gov: 1. Weekly Benefits Claimants receive a weekly benefit of approximately 50 percent of their average weekly wage, up to the maximum set by law. The current maximum benefit rate is $625 a week. The duration of benefits ? the maximum number of weeks you would be able to collect benefits ? is determined by the total amount of your wages paid and the amount of your benefit rate. The maximum number of weeks a claimant can collect full benefits is 30 weeks. Under Massachusetts law, regular benefits are capped at 26 weeks (instead of the maximum of 30 weeks) whenever there is a program of extended benefits. However, many individuals qualify for less than the maximum weeks of coverage. The maximum benefit credit amount is $18,750, which equals $625 a week for 30 weeks. If you are eligible for UI benefits in Massachusetts, you will receive a weekly payment for the prior week?s benefit. If you have children, you may be eligible to receive an additional $25 per child per week up to a maximum of 1/2 of your weekly benefit amount.
The job openings tend to fall into two very broad categories. 1> Highly skilled, highly specialized jobs. These are hard to fill because there are fewer people who qualify that there are jobs. Under normall circumstances, supply and demand would dictate the people would train for these jobs. Training is expensive, and then so many have an instant gratification or something-for-nothing, or the-world-owes me mind set that they won't do it. 2> Lower paying service jobs. Although these jobs pay $10 - $15 an hour in Austin, people don't want to work those jobs, because they feel that the job is beneath them. They would rather be a rock star, sports star, or win the lottery than work for a living. Then, there's the guy here in town who flat out stated "Why should I take a job for $15 an hour when I make more than that in unemployment benefits? When you pay people to not have a job, why are you surprised when they don't have a job? BTW, I have been laid off twice in the past ten years.
Work ethic pays off. Out of the dozens of people I know who lost their jobs over the past 3 years, the 7 who started doing volunteer work were each unemployed less than 6 months. 8 Reasons to Volunteer During Unemployment Work experience and training: All jobs translate into job options and career potentials. They're useful as basic training in all related areas of employment. Work discipline: People get out of the work habit when unemployed for long periods. A job restores the organizational factors to life. Filling gaps on the resume: A lot of unemployed people sabotage themselves with avoidable gaps in their resumes. This is a real practical problem, and the resume looks much better with recent work on it. Upgrading and learning skills: Some volunteer jobs include comprehensive training in portable skills. For some people, getting volunteer work in their old areas of employment is effectively free retraining. Gaining current experience helps in getting jobs where the lack of it is a factor in job selection. Avoiding the "unemployment syndrome": The static, stagnant state of unemployment isn't good for people. The lack of meaningful occupation is considered by employment industry professionals to be a health risk. Volunteer work breaks the cycle, and creates new perspectives, as well as new options. Making a shift in priorities: When unemployed, the priorities are often too limiting. The cycle of looking for work and doing job applications becomes an ordeal, almost a brick wall of possibilities, with no options. Volunteer work can take you out of the treadmill and give quite different sets of priorities. The change to a job and its set of priorities is a positive catalyst, restarting the thinking processes outside the limitations of unemployment-based logic and creating reevaluation scenarios. The social environment: Instead of the ever-shrinking circle of contacts during unemployment, volunteering creates the opposite effect. Volunteering brings people in similar situations together, and forms good relationships. A built in advisory and support service: One element almost ignored in volunteer work is that you're working with professionals in the field. These volunteer employers really know the whole story about unemployment. They can advise and help you look for jobs. They can outline job options. They can also help get jobs. Skill level, age or job experience did not matter. All of them found work through a referral from someone they met while volunteering. All of them still volunteer part time because they feel they owe it to the people who helped them get a job.
But unemployment benefits in Massachusetts, plus all of the other state social programs you qualify for, can equal 75 percent of your pre tax income and all the benefits without paying for them. With almost all of it tax-free, why should they work? Encouraging people to milk benefits is a billion dollar industry here with the state employing hacks who can educate the unemployed on how to get every dime out of the system. These vultures, from groups like Acorn, get paid commissions for every person they get signed up to a state program. In a state where state taxes push the income tax burden close to 40 percent, being unemployed with 75 percent of your income and benefits, including the best free medical coverage in the country, is almost a break even situation compared to working for a living. Many people milk it for as long as they can. California is in the same situation. Why do you think unemployment is not dropping in democrat dominated states like MA and CA? Unemployment is an industry by its self.
Why do I challenge their assertions? 1. I know for a fact that many so-called "job openings" one can find advertised in our local newspaper and on job-search sites don't really exist. Without naming any names, I know at least 2 big corporations located where I live who regularly list a page or two of "openings", when they are actually jobs within the company that are already filled, or alternately, are positions someone in middle management is THINKING about offering, if/when he or she gets approval for the project. Why do that? If your H.R. dept. and manager can hang the fact over an employee's head that "I've got resumes of at least 5 good, qualified candidates right here who would be happy to take your job!" - it's a powerful motivator, or counter-argument against someone asking for a raise. And it's convenient keeping all those potential candidates on file in their computer database, in case a project IS approved. 2. With the economy as bad as it is, I KNOW there are plenty of good, capable people out there who want to work. As someone mentioned above though, today's businesses figure it's a "buyer's market" right now, so rather than spend any money to TRAIN someone - they'd rather hold out for the candidate who already happens to have whatever special skill-set(s) they're seeking. 3. Especially for technical jobs, it's long been a tactic for companies to claim they "can't find any qualified people", because that's generally a requirement for them to justify hiring foreign workers via H1B visas. They'd often rather do that because they don't have to pay them nearly as well as the "going rate" for the skills needed, AND sometimes they can shave costs on their benefits package too. Oh, and that guy arguing about unemployment benefits in Denmark just causing laziness? That is SO far from applicable here in the USA. I've had to draw unemployment a couple times before, and I can assure you, it doesn't pay anywhere NEAR what I was used to taking home in a regular paycheck. Basically, it wasn't even enough to cover much of anything past making my house payment and a minimum payment on my vehicle. I hardly know anyone who worked in a "professional "type of career job who could get by on unemployment pay unless they "cheated" and did some work on the side that they didn't report. (If you report it like you're supposed to, they reduce your unemployment pay by however much you made!)
There are many reasons why unemployment stinks. In the US, the unemployment benefit rate is very low compared to the wages before unemployment. Employers may complain that they can't find good people but they will not interview people who are unemployed because of a perception that those people are defective. I do not think most unemployed people are lazy; there may be some but not the majority. The problem is that it is harder to find a cross over job to make a career change because of offshoring and also because of specific skills required. Being out of work is a nasty roller coaster ride that doesn't end soon enough. Those who have been unemployed for long periods can probably agree how frustrating and stressful it is to be looking but not finding work. Those who have not had to endure unemployment, be thankful that you have been fortunate and do not look at the jobless as lazy because you may not do so well if you find yourself out of work.
I never, never see the "A" word in any of these discussions on employment. AUTOMATION. More and more activities are automated, so who needs new workers? When's the last time you saw a Ad for "receptionist", or "typist", assembly lines are getting more automated every year. Even in the "tech" industry, massive server farms are run by a few employees using automated tools to watch over their charges.
I think the .COM bust killed employer interest in training employees that would just quit and take the new knowledge with them for a higher-paying job -- probably for a competitor. Now that things have returned to normal, and people feel lucky to have a job if they have one, maybe employer should start investing in skills again? Besides getting an employee at a reduced rate due to the training requirement, that person can be indoctrinated into the organization with that organization's values and ethics and will probably make a better employee in terms of performance, compatibility, and longevity. I've seen too many people bring incompatible business practices with them from a previous employer and it really causes problems. - Hire people with inadequate knowledge or experience for posted positions. - Train them - Tack the estimated cost of training to their employee records with a loan agreement, and call it due (in-full) if they quit. This would stop people from receiving an educational reimbursement only to quit soon after. Periodic balance reductions could be made for exceptional performance, yielding more money per pay check and motivation to stay with the company.
Over the last several decades businesses have moved from training their own or at least paying for advanced training of their own to demanding job-ready applicants who have bought their own training in desperate hope that their educations will be simultaneously fully applicable, current, and in demand. Of course this doesn't work. How am I, for example, supposed to know what YOUR company will specifically want five years from now? This is the same corporate greed that sucked up pension funds, moved much entry-level employment overseas and shifted domestic production to abusable temporary labor. Every time these CEOs cry, I feel like kicking their stupid, greedy short-sighted selves. They need to shut up, hire, train and pay.
All 160000 companies want the same 200 existing professionals, and they are not willing to accept anybody else, or train anyone themself. The companies want everything without doing anything. @HatesIdiots: In our country we have unemployment benefits for one year. Then You are either sent to a worthless re-education course or a sub-minimumwage job for 8 months. During this time You are "employed", and the statistics are reset. After this time You are kicked out of the course or "job" and Your unemployment period starts from the beginning again. Thus it "appears" as if it's the benefits that keeps people unemployed. But that's completely wrong. Also, if You refuse to attend these courses or jobs (like if You already have the required skills, are harrassed or overworked on the job, or quit for any other reason than serious health problems) You are automatically kicked out of the benefit scheme, and are thus not an "unemployed" person anymore. It's all just an esthetic solution created by governement officials who are overpaid and underworked. Our governement can (and do) give themselves payrises every year, regardless what happens in the workmarket or global economy. At this moment in time a minister or representative gets about 8000? plus taxfree benefits, while the average worker gets about 1800? per month. An unemployed gets about 450?, and still have to pay income tax for that. After paying rent and food there is nothing left. Not even for a newspaper.
Studies in Denmark showed that people stayed unemployed for almost 5 years when unemployment benefits lasted 5 years. Well then, I guess it's a good thing that in the US they currently run out in just under 2 years (99 weeks). Seriously, unemployment benefits in Denmark are much more generous than in the US. There are lots of people in the US whose benefits have run out and they still haven't been able to find work. If you're destitute it makes it that much harder to find work.
My wife was just "down sized", not because of her lack of skills or experience, but because they went off shore to save money. So I'm not buying this garbage the CEO's are handing out.
Traditionally, on the job training was standard for specialized skills. Why are companies suddenly thinking that they can hire people who already have the specialized skills they need? Not only that, but I am seeing lower salaries with higher skill level requirements. That combination is not managing to attract the folks who already have the skills away from their current jobs. If companies want to hire in at a lower salary rate, they are going to have provide the training.
Studies in Demark showed that people stayed unemployed for almost 5 years when unemployment benefits lasted 5 years. They shortened benefits to 4 years and the average time unemployed went to just under 4 years. They shortened benefits to 3 years with the same results. Demark recently started discussing cutting unemployment benefits to 2 years because of conclusive evidence that people are willing to adapt to living on less money if it means they do not have to work. Lazy wins over greed.
Many growing companies will have to be the ones that take the responsibility to train the people that they need for their particular specific needs. Government must supply the insentives for this training, and bean counters just have to reconsile that people cost money and skills cost even more. A thinner bottom line is better than no bottom line. Steve D firstname.lastname@example.org