Real Life Examples From Unemployment Report

   Click on graphic to enlarge

 

The February unemployment report released last Friday was more of the same. 

 

The government's official unemployment rate, U-3, was 4.9%.  There were 24,000 more people classified as unemployed, 46,000 more people worked part time for economic reasons, & 76,000 more people were unemployed for 27 week or longer than in January.  Please note that people counted as employed in determining U-3 could be working as little as an hour a week.

 

Over a quarter of the unemployed (2.2 million people) have been out of work for over 27 weeks & many way over 27 weeks.

 

The average workweek declined & the manufacturing workweek was unchanged.  The average hourly earnings declined.

 

Payroll employment increased by 242,000 – 12,000 of which were government jobs.  Although this is a better figure than reported for months on end the country needs to gain 120,000 jobs a month to keep up with population growth thereby halving the seemingly good news.  

 

Worse yet – nonfarm business sector productivity decreased @ a 2.2% annual rate in the fourth quarter of 2015 & unit labor costs increased 3.3% during the same period.  This is another terrible indication of America's inability to compete in the global economy.

 

Many employers continue to have trouble finding qualified people to fill vacancies – there are serious skill gaps.  Most of the jobs created the past several months have been in low-wage retail, leisure, & health services positions.  The U-6 unemployment measure that includes the total unemployed, plus all persons marginally attached to the labor force including discouraged workers who have stopped looking for work, plus the people working part time who want full time employment is still 9.7%.  This U-6 rate is a much more accurate measure of the state of the economy – if the headline unemployment rate would be given as 9.7% it would be regarded as terrible.

 

Source of statistics – U.S. Bureau of Labor Statistics.

 

Now I personally know young people (in their twenties) many with seemingly useful college degrees who can't find jobs after looking for several years meaning their entire career plans may have passed them by.  I don't know one personal manager I ever worked with who would have recommended hiring any one of these people.  A twenty-five year old who never worked in his field is in competition with a twenty-two year old in the same field who just graduated meaning the twenty-two year old would be favored.  This is a loser for the twenty-five year olds, the economy, & America.

 

I also recently met a 51 year old nurse in the ophthalmology field who was fired & is only finding jobs with "McDonalds wages of $10 an hour" – & even @ that she has been out of work for several weeks.  This woman may very well never work again in her field.  She is not the only person with a nursing degree (from Vanderbilt) or master's degree who can only find part time work @ low hourly wages & no benefits.

 

A friend in the grocery business told me that his local Kroger has problems hiring full time workers because working full time @ Kroger's very good hourly wage means that people will lose one government benefit or another so Kroger goes wanting for help.  This is the wrong incentive for achieving prosperity.

 

A man I encountered @ the local Social Security office represents the flip side of the Kroger problem.  The man can only get part time work - usually by no coincidence the ObamaCare top limit of 29 hours.  The man will be 62 in May & needs early retirement benefits to make ends meet.  Here is a man that wants to work & really meets the definition of U-6 unemployment who will soon be another person receiving a government check.  Taking early Social Security benefits under these circumstances does not present a solid future for this man in that the retirement benefit will always be reduced & the man will want to work less & less as he ages – his income will always be strapped.  This is what BO's economy is becoming for far too many.

 

But the most distressing part of this post centers around the unemployment of recent engineering school graduates with particular focus on chemical engineers. 

 

An article in the December issue of Chemical Engineering Progress (CEP) reported the results of the AIChE's Initial Placement Survey for the class of 2015 - the survey was based on data provided by 2,166 students.  I was literally stunned by the unemployed figures: BS - 17.9%, MS – 20.9%, PhD – 13.3%.  Those continuing their education were BS – 22.9%, MS – 26.6%, & PhD – 20.4% meaning that 40.8% (17.9 + 22.9) of students who earned a BSChE degree in 2015 did not receive a job offer.  

 

I contacted the editor of the magazine to get figures for other years & received similarly depressing figures for 2014, 2009 & 2006 – the only other years readily available.

 

I graduated in January 1967 & I recall everyone in the class receiving several job offers except the very few who went on to graduate school in chemical engineering – not the 22.9% shown for BS in 2015.  In fact I remember there were two job openings for every graduating chemical engineer in the country.  I wonder if the category "continuing education" is a form of unemployment where not getting a job is just delayed. 

 

Engineers working in industry are the source of the efficiency improvements & increases in productivity needed to support a business's growth so that value producing jobs can be created.  Look @ the U-6 curve from the above graphic to decide for yourself how long the American economy has been in the doldrums.

 

This post presents real life examples of how dependence on government benefits has stagnated the American society – you probably know of other people suffering as well.  The problems of people working part time who want full time employment or discouraged workers who know there are no jobs for them @ all did not start with BO but he sure has opportunistically designed his own policies to make sure those miseries persist – ready to be handed off to Hillary Clinton for continuation.