Whatâs
Wrong Today:
Yesterdayâs Wall Street Journal reported
on how the backbone
of Americaâs labor force are out of work at unprecedented
levels. From the WSJ:
six men ages 25 to 54, prime working years, don’t have jobsâa total of 10.4
million. Some are looking for jobs; many aren’t. Some had jobs that went
overseas or were lost to technology. Some refuse to uproot for work because
they are tied down by family needs or tethered to homes worth less than the mortgage.
Some rely on government benefits. Others depend on working spousesâŚ
Having so
many men out of work is partly a symptom of a US economy that is slow to
recover from the worst recession in 75 years. It also shows how technology and
globalization are transforming jobs faster than many workers can possibly adapt.
More from the WSJ:
building for decades, according to government data. In the early 1970s, just 6%
of American men ages 25 to 54 were without jobs. By late 2007, it was 13%. In
2009, during the worst of the recession, nearly 20% didn’t have jobs
Although
the economy has improved and the official unemployment rate has fallen to 6.7%,
the numbers for working-age men are terrible: 17% of men 25-54 weren’t working in December. More than
two-thirds said they weren’t looking for work, so the government doesn’t label
them unemployed.
The
January report on the job market is due today.
For women,
the story is different. In the 1950s, only about a third of women ages 25 to 54
had jobs. That rose steadily until the 1990s, and then leveled off. At last tally,
about 70% are working; 30% are not.
The bleak
prospects for the long-term unemployedâ40% of men looking for jobs say they
have been out of work six months or moreâis alarming: The longer a person is
unemployed, according to a recent study, the harder it is to find a job. The good news is that there is an increase in resources for people to use when they are in this situation, such as the ability to download templates for free to use as resumes, and a rise in jobseeker facilities.
That
research is by Rand Ghayad, a visiting scholar at the Boston Federal Reserve
Bank, and William Dickens, a professor of economics at Northeastern University.
They analyzed Beveridge
curves to see who the recovery is leaving behind. A Beveridge curve shows
the relationship between job openings and unemployment.
What
Ghayad and Dickens found is that the Beveridge curves are normal across all
ages, industries, and education levels, as long as you haven’t been out
of work for more than six months. In other words, it doesn’t matter
whether you’re young or old, blue-collar or white-collar, or a high school or
college grad: The only thing that matters is how long you’ve been out of
work.
Wage
stagnation is an issue as well. Since the early 1970s, the average
inflation-adjusted wage for high-school dropouts has fallen about 25%; for
high-school graduates with no college degree, it is down about 15%.
Simply
put, many of the available jobs don’t pay enough to get men to take them,
particularly if securing a job requires moving, long commutes or surrendering
government benefits. Economists say part of the problem is that men with few
marketable skills and little education can’t find work that pays enough to get
them off the couch.
Here are
some data compiled by the WSJ:
We
reported last
week that a new Wal-Mart opened in DC and advertised that 400 people would
be hired. Over 20,000 people applied for those 400 jobs, making it harder
to get a job at Wal-Mart than to get into Harvard. It doesnât end
there. ERE
reports:
job, on average 250 resumes are received for each corporate job openingâŚIn
addition, out of every 1000 people who view an online job posting, 100 people
will apply, 4 â 6 will be selected for an interview, 1 â 3 will be invited for
a final interview, 1 will be offered the job, and 80% of those who get a job
offer accept it
Sure the
Internet makes it vastly easier to apply for jobs than the old-fashioned
written submission, but, according to ERE, if you are late to finding an open
position on the web, your chances are slim because the first resume is received
within 200 seconds after a position is posted.
If you
post your resume online on a major job site like Monster so that a recruiter
can find it, you are facing stiff competition because 427,000 other
resumes are posted just on Monster each week.
It is clear that at least some unemployed men are on
trajectories that canât be sustained. They are borrowing money and selling
assets and many are falling behind on payments.
The WSJ article makes it clear that the duration and severity of
unemployment among men in their peak earning years is causing both more
suffering than is readily apparent, and that this group is also likely to wind
up impoverished in their old age.
These men, who have self-identified as producers and
breadwinners, face a grim future in psychological as well as financial terms.
This is not an Obama problem, this is a societal problem, and the Senate’s failure to pass an extension of extended unemployment benefits yesterday doesn’t help. Our society needs to wake up to the
reality that once you’ve been out of work for six months, there’s little you
can do to find work, regardless of how strong the rest of your resume is.
After all, employers
hardly look at it: ERE indicates recruiters spend 6 seconds reviewing each resume that passes through the keyword screens.
The worst possible
outcome for all of us is if many men between 25 and 54 become unemployable. That has
major socio-cultural implications and it permanently reduces our productive
capacity.
This
problem is larger than any administration. Free trade policies pursued by
administrations of both parties have resulted in the loss of decent paying middle
class jobs, while automation and technological advances are also major factors.
It would be inaccurate to try to solely blame our elected officials for continued technological advancement, and the changes to the
structure of the economy that result.
But it is
horrible is that both political parties recognize the problem, but that only
one side seems energized to do anything about it.
