The Steep Structural Slope against Job Growth


I have been thinking about doing a post concerning the uphill climb towards job growth.  Instead, I have decided to cross post something from Adam Rust over at BankTalk.  He has a great blog that I would encourage everyone to read.  Below is his post:

– – – –

Part of the headwind thwarting efforts to curb unemploymentstems from systematic shortcomings in worker training.

There were two important sets of job numbers this week. On Tuesday, the Bureau of Labor Statistics reported that there the number of new job openings is increasing. Compared to the same period last year, new openings jumped 13.3 percent in July. Moreover, private businesses posts the strongest gains. Government openings actually dropped. This followed a report that almost one in two employers plant to make new hires in the next six months. In all, companies want to hire 3.2 million workers. That is about the same number as in 2003, when our economy was booming.

On Thursday, the same Bureau of Labor Statistics said that the number of working people had remained flat. In other words, some businesses do want to hire people but the jobs are not being filled.

The way that the BLS counts jobs is far from perfect. Everyone pays attention to u-3: the percentage of the workforce made up by people looking for work that remain unemployed. U-6 counts those workers as well as people that are underemployed and that have given up looking for work. Last month, that number was 16.1 percent.  But even if the set of metrics for counting jobs leaves something to be desired, the dynamic is probably accurate. Companies want to hire, but they aren’t compelled to do so.

Part of the problem is that we have structural unemployment. It is a hard truth that some workers no longer have the skills that it takes to do a job in our economy. A lot of the jobs held by North Carolina’s textile workers disappeared in the last twenty years. Now, North Carolina has a strong economy. But many of the new jobs don’t match the abilities of workers. North Carolina suddenly has more jobs in biotechnology, in data analysis, and in finance. Textile workers are not about to get that work. There is also growth in lower-skill work, but those jobs don’t come with the same protections or with the same wages. A textile worker made more ten years ago than a certified nursing assistant or a Molly Maid maid makes today.

Multitudes of Americans are left on the sidelines. They are not working at all.  Some are getting by on 20 hours of work a week. But some jobs just are not coming back. Those industrial workers in Ohio and Michigan are probably facing a labor market that is suffocating.

The time it takes workers, on average, is going up. It takes 33 weeks to get rehired these days, on average, and six million people have been out of work for more than 27 weeks.

The unfortunate thing about this problem is that there is no quick way to fix it. Ultimately, structural unemployment is a comment on our schools. Our winner-take-all school system provides lavish public schools in places like Northern Virginia or suburban Connecticut. It provides an education that some judges have determined be unconstitutionally inadequate in northeastern North Carolina.

Our core of knowledge workers differentiates our country from the places that have taken so many of our textile jobs. I do not understand why so much political rhetoric focuses on getting those jobs back in our country. The textile jobs from the late 90s belong with the jobs picking cotton by hand in the 19th century.

We have great universities and we manage to draw the top brains from all over the world. There is real competition to get a job at the lower rungs of our economy. The answer might be to put more money into schools, but another idea might be to recalibrate how we train people. Today, people with college degrees are struggling to get work making coffee. It doesn’t make much sense to get a degree in television broadcasting from a fourth-tier public university when there are only a few thousand positions in the whole country. It doesn’t make much sense to sell a $40,000 per year tuition to potential printmakers and actors. Have you ever noticed how hard it is to find a good plumber?

Thanks to NC’s budget, unemployment back on the rise


After the 2010 election cycle, the republicans took over the majority in the house and senate.  During their campaigns they made lots of promises about creating jobs.  In practice they did the opposite.  The big item during the session was the state budget and dealing with the shortfall.  It seemed like from the beginning, they were more focused on cutting out state into the past than they were about creating jobs and moving our state forward.

In fact, it seemed like at every opportunity during the budget debate, they did more to hurt jobs.  They attacked tax credits like the state eitc and the child care credit, that encourage low-income families to work.  They seemed to want to cut every environmental program and had their hearts set on defunding Planned Parenthood.  They wanted to increase rates on small finance loans, and roll back the financial protections the state has become known for.  With all this, it seemed they were more concerned with turning back time and less concerned with creating jobs for the future.

What they did do was ignore calls to take a balance approach to the budget, and chose to make severe cuts rather than some cuts and increased revenues.  The latest unemployment numbers begin to show that.  All the cuts in state government meant cutting lots of jobs or eliminating positions that had yet to be filled.  As a result, there were over 10 thousand fewer jobs available in June.  This may be only the beginning as more agencies make cuts going forward, more jobs will have to be cut.

I fail to see how they delivered on promises of job creation, but see plenty of evidence of eliminating jobs.  They seemed more focused on undoing the work of the past and this holds an eerie resemblance to how republicans in D.C. handled their new-found power.  Less about solving problems and more about a undoing the past.