Last week I talked about unemployment rates. If you go back and read that blog entry, you’ll see a significant disparity in the rates for various categories. These gaps are there in good times and bad. I have no idea how to balance the scales. I’m not even sure that we should try. The government and the unions have tried to do so for well over half a century. How’s that working out for us? On the other hand, I am concerned about the ever increasing gap between the haves and have-nots. But let’s talk about what we can do today to go from Big U to Little U.
First of all, let’s convert percentages to numbers of people. If we use U3, the government's official unemployment calculation, we have just over 14 million unemployed people in this country. In 2009 the average for the year was 14.2 million and while the number is coming down ever so slightly, we’ll probably average about that same level in 2010. Before the recession we had 7 million unemployed. So, I say let’s focus on the 7.2 million who have been added to the unemployment roster.
If I could wave a magic wand and create over 3 million jobs would that help? Well, consider it done. According to the Bureau of Labor Statistics (the same folks who keep track of unemployment), we have 3.2 million job openings in the U.S. There’s good news and bad news here. The good news is that there are 3.2 million jobs. The bad news is that they do not necessarily line up with the skills, locations or compensation expectations of the unemployed. For example, 1.2 million of the newly unemployed came out of the construction industry. Only 68,000 of the 3.2 million job openings are in construction. Another 1.2 million of the newly unemployed came from manufacturing. Only 200,000 of the 3.2 million job openings are in manufacturing and by the time you factor in skill requirements, location and compensation; a significant number of those 200,000 jobs will go unfilled; or be filled by currently employed workers who are in the right place with the right skills and whose job change will create yet another open position that doesn’t match up well with the unemployed population.
It’s worth noting that the number of unemployed “professionals” jumped by almost a million when the recession hit. But now there are over 600,000 job openings for people in this category. Again, there are issues of skills, location and compensation, but the recovery in this group is likely to happen much faster than it will for construction and manufacturing.
So what should our government be doing to put at least 7 million of our fellow Americans back to work. That’s next week's subject…but I’ll give you a hint…It ain’t more food stamps.
Saturday, October 9, 2010
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