JOBS Why the Future Depends on Today’s Discouraged Workers

The economy, the stock market and even the November elections will largely be determined by a group of people who are almost invisible to forecasters.

Economists, investment advisors and political strategists are closely watching the unemployment rate. But few commentators acknowledge just how faulty the employment statistics are. One key problem is that a crucial group of people can’t be tracked and measured. These are the so-called discouraged workers, who have given up looking for employment. They are the economic equivalent of astrophysicists’ dark matter – the particles scattered throughout the universe that can’t be seen but have enough mass to alter the course of everything we can see.Jaime Monfort / Getty Images

There have always been discouraged workers, of course, but the recent recession has multiplied their number. And it has enlarged a related category, as well, those who could be described as disgruntled workers – the underemployed, who have been forced to accept jobs with fewer hours or lower pay than they would like. These two groups aren’t counted in the unemployment rate either because they aren’t listed as looking for work or because they are listed as already working.

The uncounted include people who lost their jobs and spent months unsuccessfully looking for new ones until they finally gave up; women, and some men, who would like to work but have decided it makes more financial sense to stay home and care for kids instead; and teenagers who have not been able to find entry-level jobs. There are also older middle managers who have had to take early retirement even though they would prefer to continue working. To those groups, add anyone who lost a job and ended up having to accept a new one that was worse.

And why do these people matter so much? As I see it, it breaks down into three basic reasons…


By MICHAEL SIVY | @MFSivy | http://business.time.com JAIME MONFORT / GETTY IMAGES
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The economy, the stock market and even the November elections will largely be determined by a group of people who are almost invisible to forecasters.

Economists, investment advisors and political strategists are closely watching the unemployment rate. But few commentators acknowledge just how faulty the employment statistics are. One key problem is that a crucial group of people can’t be tracked and measured. These are the so-called discouraged workers, who have given up looking for employment. They are the economic equivalent of astrophysicists’ dark matter – the particles scattered throughout the universe that can’t be seen but have enough mass to alter the course of everything we can see.Jaime Monfort / Getty Images

There have always been discouraged workers, of course, but the recent recession has multiplied their number. And it has enlarged a related category, as well, those who could be described as disgruntled workers – the underemployed, who have been forced to accept jobs with fewer hours or lower pay than they would like. These two groups aren’t counted in the unemployment rate either because they aren’t listed as looking for work or because they are listed as already working.

The uncounted include people who lost their jobs and spent months unsuccessfully looking for new ones until they finally gave up; women, and some men, who would like to work but have decided it makes more financial sense to stay home and care for kids instead; and teenagers who have not been able to find entry-level jobs.  There are also older middle managers who have had to take early retirement even though they would prefer to continue working. To those groups, add anyone who lost a job and ended up having to accept a new one that was worse.

And why do these people matter so much? As I see it, it breaks down into three basic reasons… Leer más “JOBS Why the Future Depends on Today’s Discouraged Workers”

U.S. Economy: Recession Concerns Ease on Private Jobs


By Shobhana Chandra

Sept. 3 (Bloomberg) — Companies in the U.S. added more jobs than forecast in August, easing concern the world’s largest economy is sliding back into a recession.

Private payrolls climbed 67,000 after a revised 107,000 increase in July that was more than initially estimated, Labor Department figures in Washington showed today. The unemployment rate rose to 9.6 percent as more people looked for work. A separate report showed service industries expanded more slowly than estimated.

Stocks climbed around the world and U.S. Treasuries slumped as the employment report bolstered Federal Reserve Chairman Ben S. Bernanke’s view that the conditions are in place for a pickup in growth in 2011. While companies such as Caterpillar Inc. are boosting staff as the global economy recovers, payrolls are expanding too slowly to bring down an unemployment rate hovering near a 26-year high. Leer más “U.S. Economy: Recession Concerns Ease on Private Jobs”

Job Hunting Resources

The job search process is never easy, but there are ways to improve your chances of landing a job. Here are tips on finding job opportunities, resume writing, interviewing, and other ways to help you stand out from other candidates. Use the links below to jump to any section.

* Job Search Tips
* Writing Your Resume
* Mastering the Interview
* Other Ways to Stand Out

Job Search Tips

6 Ways to Use Technology to Upgrade Your Career
Technology helps us stay connected, learn something new, and make new connections quickly and efficiently. Here are 6 ways to use technology to upgrade your career. By Greg Go

How Online Job Boards Can Actually Help A Job Search
For someone launching a job search, online job boards can provide a wealth of information. By Julie Rains

5 Fatal Assumptions of Job Seekers
Many people are job hunting these days. Wise Bread blogger Julie Rains has worked with job seekers for many years and have found that these five common assumptions frequently derail a job search. By Julie Rains


Photo: hohojirozame

The job search process is never easy, but there are ways to improve your chances of landing a job. Here are tips on finding job opportunities, resume writing, interviewing, and other ways to help you stand out from other candidates. Use the links below to jump to any section.

Job Search Tips

6 Ways to Use Technology to Upgrade Your Career
Technology helps us stay connected, learn something new, and make new connections quickly and efficiently. Here are 6 ways to use technology to upgrade your career. By Greg Go

How Online Job Boards Can Actually Help A Job Search
For someone launching a job search, online job boards can provide a wealth of information. By Julie Rains

5 Fatal Assumptions of Job Seekers
Many people are job hunting these days. Wise Bread blogger Julie Rains has worked with job seekers for many years and have found that these five common assumptions frequently derail a job search. By Julie Rains Leer más “Job Hunting Resources”

Help! I Lost My Job!

Unemployment tips and resources for the recently laid off

Here are tips and resources to help if you have just been laid off or you suspect that you will soon be laid off. Check our other guides to job hunting, earning extra income, and ways to cope if you hate your job. Also check out the sidebar for links to job boards and other job hunting resources.


Unemployment tips and resources for the recently laid off

Here are tips and resources to help if you have just been laid off or you suspect that you will soon be laid off. Check our other guides to job hunting, earning extra income, and ways to cope if you hate your job. Also check out the sidebar for links to job boards and other job hunting resources. Leer más “Help! I Lost My Job!”

The Long-Term Jobless: Left Behind

Workers in technology, telecom, and finance are at greatest risk because skills in the fast-changing industries can quickly become obsolete

By Timothy R. Homan and Zachary Tracer

To understand the potential consequences of long-term unemployment, consider the job prospects of Sheldon Fisher and Douglas Lawson. In January, Fisher, 53, was dismissed from a software company in Washington State. Lawson, 34, lost his job in October with a builder in South Carolina. Now the technology industry is bouncing back while construction remains in the dumps, and Washington’s jobless rate is 8.9 percent, vs. South Carolina’s 10.7 percent. Still, Lawson’s prospects may be better than Fisher’s.

That’s because being jobless for a long time hurts workers in some industries far more than in others. The technology sector is known for such rapid change that those out of work for even a few months can find themselves with out-of-date skills. Construction skills are far less likely to grow stale. “I never forget what I know. … I’m not worried about doing the work once I get it,” says Lawson, who has applied for about 30 jobs so far. Fisher, by contrast, is considering leaving information technology altogether, though he says he’s not sure what else he’s qualified to do. After applying for about 100 jobs in his first half-year out of work, Fisher began to worry that employers might think he was getting rusty. “Then everything after six months just makes it worse,” he says.

The average duration of unemployment in the U.S. jumped to a record 35.2 weeks in June, up from 16.5 weeks when the recession began in December 2007, according to the Labor Dept. Today, almost half of unemployed Americans have been out of work for 27 weeks or more (the official definition of long-term unemployment), vs. 30 percent in June 2009.
Perishable Skills

Industries with highly perishable skill sets include health-care technology, telecommunications, and finance, where regulations have changed dramatically in the past year. The toughest, though, may be information technology. Companies in that sector have cut payrolls for 32 of the last 33 months, through June, for a cumulative loss of some 312,000 jobs, or about 10 percent. In technology, “if you’ve been out of work for a year or two, you’re probably somewhat outdated,” says Shami Khorana, president of HCL America, the U.S. arm of New Delhi-based HCL Technologies, which employs about 5,000 workers in the U.S. He plans to hire at least an additional 600 people as the economy improves and anticipates retraining some candidates with obsolete skills.

Unemployed workers in construction, retail, low-level health-care jobs, and teaching are more likely to be attractive to employers once hiring picks up because such jobs don’t change as quickly, experts say. “You don’t get the sense that residential construction has changed that much in the past decade,” says Harry J. Holzer, an economist at Georgetown University and the Urban Institute in Washington. The skills needed to work at a grocery or clothing store—running the cash register, for instance—are “rudimentary,” he says.


Workers in technology, telecom, and finance are at greatest risk because skills in the fast-changing industries can quickly become obsolete

By Timothy R. Homan and Zachary Tracer

To understand the potential consequences of long-term unemployment, consider the job prospects of Sheldon Fisher and Douglas Lawson. In January, Fisher, 53, was dismissed from a software company in Washington State. Lawson, 34, lost his job in October with a builder in South Carolina. Now the technology industry is bouncing back while construction remains in the dumps, and Washington’s jobless rate is 8.9 percent, vs. South Carolina’s 10.7 percent. Still, Lawson’s prospects may be better than Fisher’s.

That’s because being jobless for a long time hurts workers in some industries far more than in others. The technology sector is known for such rapid change that those out of work for even a few months can find themselves with out-of-date skills. Construction skills are far less likely to grow stale. “I never forget what I know. … I’m not worried about doing the work once I get it,” says Lawson, who has applied for about 30 jobs so far. Fisher, by contrast, is considering leaving information technology altogether, though he says he’s not sure what else he’s qualified to do. After applying for about 100 jobs in his first half-year out of work, Fisher began to worry that employers might think he was getting rusty. “Then everything after six months just makes it worse,” he says.

The average duration of unemployment in the U.S. jumped to a record 35.2 weeks in June, up from 16.5 weeks when the recession began in December 2007, according to the Labor Dept. Today, almost half of unemployed Americans have been out of work for 27 weeks or more (the official definition of long-term unemployment), vs. 30 percent in June 2009.

Perishable Skills

Industries with highly perishable skill sets include health-care technology, telecommunications, and finance, where regulations have changed dramatically in the past year. The toughest, though, may be information technology. Companies in that sector have cut payrolls for 32 of the last 33 months, through June, for a cumulative loss of some 312,000 jobs, or about 10 percent. In technology, “if you’ve been out of work for a year or two, you’re probably somewhat outdated,” says Shami Khorana, president of HCL America, the U.S. arm of New Delhi-based HCL Technologies, which employs about 5,000 workers in the U.S. He plans to hire at least an additional 600 people as the economy improves and anticipates retraining some candidates with obsolete skills.

Unemployed workers in construction, retail, low-level health-care jobs, and teaching are more likely to be attractive to employers once hiring picks up because such jobs don’t change as quickly, experts say. “You don’t get the sense that residential construction has changed that much in the past decade,” says Harry J. Holzer, an economist at Georgetown University and the Urban Institute in Washington. The skills needed to work at a grocery or clothing store—running the cash register, for instance—are “rudimentary,” he says. Leer más “The Long-Term Jobless: Left Behind”

A Double Dip Recession? Who Cares?

What should be most striking about these concerns, however, is how little they matter. A double dip is a period of economic contraction that follows a brief recovery after a recession. It’s a useful prop for framing economic and political debates but doesn’t describe what’s actually happening across the country. The reality is that if you are doing well in this economy, either as a company or an individual, you will continue to do well regardless of a statistical double dip. If you are doing badly, you will continue to struggle whether or not the economic data are improving. (See 10 big recession surprises.)

GDP has been expanding since the third quarter of last year, graced by government spending and a steady though diminished level of domestic consumption. But as we all know, that growth — 5.6% in the fourth quarter of last year and 2.7% in the first quarter of this year — has been accompanied by high unemployment and little job creation. In short, this has been an economic recovery that has felt like a continued recession.

That’s because for a significant portion of the population, it is a continued recession. Not only is the real unemployment rate (combining workers who have dropped out of the workforce and the headline numbers, together with workers classified as marginally attached to the workforce) in the midteens, but the amount of hours worked has declined, as have many incomes. If you combine that with the scarcity of consumer credit and the uncertainty about the social safety net, tens of millions of Americans are facing a grave economic future. Particularly for men who lack a college education and were or are in an industry that depends on manual labor (construction and manufacturing above all), this is a perilous time.


Though global equities have rallied modestly after a sharp plunge in May and June and companies have announced strong earnings, sentiment about the future remains gloomy. In response to intense concerns about a looming double-dip recession, business leaders have complained to White House officials that government policy is inhibiting job creation and that uncertainty about new regulations is discouraging them from investing their $1.8 trillion in accumulated corporate cash. On the flip side, Democrats in Congress effectively cornered the Republicans to extend unemployment benefits yet again, a direct response to the undeniable fact that the unemployed are facing a severe challenge to find work. Leer más “A Double Dip Recession? Who Cares?”

The Perilous Problem of the Persistently Jobless

Posted by Stephen Gandel

For a time now my editor Rick Stengel has been asking the question: Why won’t unemployment stay at around 10%. That is to say, even after the economy pulls out of the recession how do we know that unemployment won’t remain where it is today. Perhaps 10% is the new 5%, when it comes to unemployment. We have afterall outsourced many of our manufacturing jobs and some of our service jobs to China, India and elsewhere. So if we make a lot less than we used to and do a lot less than we used to, whose to say that unemployment won’t remain stubbornly high, no matter which way the economy is headed.

My response a year ago or so ago when Stengel started to ask the question was because it can’t. I majored in Economics and know from my classes that the long-run frictionless rate of unemployment in the economy is about 5%. Once the economy got a kick-start, that’s where the jobs numbers would be headed again rather quickly.


Posted by Stephen Gandel

For a time now my editor Rick Stengel has been asking the question: Why won’t unemployment stay at around 10%. That is to say, even after the economy pulls out of the recession how do we know that unemployment won’t remain where it is today. Perhaps 10% is the new 5%, when it comes to unemployment. We have afterall outsourced many of our manufacturing jobs and some of our service jobs to China, India and elsewhere. So if we make a lot less than we used to and do a lot less than we used to, whose to say that unemployment won’t remain stubbornly high, no matter which way the economy is headed.

My response a year ago or so ago when Stengel started to ask the question was because it can’t. I majored in Economics and know from my classes that the long-run frictionless rate of unemployment in the economy is about 5%. Once the economy got a kick-start, that’s where the jobs numbers would be headed again rather quickly. Leer más “The Perilous Problem of the Persistently Jobless”