Management / Strategy
TrendTracker Report on Employment
By Art Raymond
Jobs Are Available
Per late September’s New Jobless Claims report, layoffs are at or near their lowest point since the recovery began in 2Q2009. At that time initial claims hit 675,000 versus the recent four-week average of 305,000. Continuing claims also hit a new recovery low of 2.837 million.
While this favorite TrendTracker metric is moving in the right direction, the problem is not layoffs but rather lack of job creation. Yes, the unemployment rate has fallen nicely from 10 percent in October 2009 to the mid-sevens today. But that measure does not include those who have stopped searching for work. A better indicator, the employment rate, has dropped to 58.5 percent from a pre-recession high of 63 percent. Look too at the labor force participation rate, the measure of those working and looking for work. It’s dropped to 63.2 percent in August. Not since 1978 has the proportion of employed Americans to total working age population been so low. These measures of our economic health are moving in the wrong direction.
What’s the problem? In a recent interview in The Wall Street Journal, Bob Funk, president of Express Employment Services, offered his opinions:
- Government regulations are creating a strong disincentive to hiring, especially of full-time workers.
- Too many potential workers are functionally unemployable due to attitude, behavior, lack of basic skills. Only one in four applicants to his company can even pass a drug test.
- Welfare programs often pay more than entry-level jobs. Over 47 million Americans receive food stamps. Fourteen million are on disability insurance. Unemployment insurance benefits cover the jobless for up to 90 weeks.
- Too many unemployed see entry-level jobs as dead ends rather than an opportunity to show their abilities and move up to higher-paying positions.
- Schools have failed to provide needed vocational and practical skills training.
Mr. Funk’s company will place almost half a million workers in temporary jobs this year. He knows full well that if someone has integrity, a strong work ethic, and is able to pass a drug test, that person can find an entry-level job. A job, he believes, is the best social program that our government could provide.
Bottom Line: Our economy won’t prosper again until working age Americans are prepared to work. Our real challenge is to rebuild the quality of our work force so that the American dream can continue. Don’t wait for someone else to lead that effort.