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Economists project that we need approximately 165,000 jobs created every month to keep the unemployment rate stable. In May there were more than 165K jobs created, but the rate went up. Some months there are less and the rate goes down.
But as one friend put it, “If I’m out of a job,
the unemployment rate is 100%.”
And that’s the real unemployment rate.
There’s a saying that if you’re out of a job it’s a recession, but if I’m out of a job it’s a depression. The bottom line is that unemployment is personal.
The May unemployment numbers came out on Friday. 175,000 jobs were created, slightly better than projected. The unemployment rate crept up from 7.5% to 7.6%.
We need a steady 225K jobs a month for six months to a year to start to make a dent. But even if hiring was steadily 50,000+ over what we need to maintain the rate, that would reduce the number of unemployed people by less than a million. It’s almost like the rate doesn’t mean anything anymore.
There are still almost 12 million people out there who are under or unemployed. Not 12 million unemployed — 12 million individuals who don’t have a job and want one. It doesn’t help to brand people with a label because lately it seems that “unemployed” quickly translates to “unemployable.”
Companies from Apple to Zappos have come up with creative strategies to find people and get them back to work. Einstein allegedly said, “We cannot solve our problems with the same level of thinking that created them.” We need to identify not just best practices, but next practices. The next big idea to get hiring going. Companies must realize that they can no longer improve their bottom line by simply cutting headcount. The key to sustainable success is getting the right people in the right jobs. Then we’ll be on our way.
Only the best
Ron
A Financial Professional from the Greater New York City area submitted this comment via another social media: “Your article highlights a major issue: the inability of the economy to create jobs! I wish to point out that the shortage of jobs is particularly acute for those over 50. This issue permeates all sectors of the economy and yet receives very little attention from the media for some reason.
The media is obsessed with the fact that the recovery phase in prior recessions was marked by much higher job creation. This may be informative but does little, if anything, to draw attention to the current problem.
One potential solution would be for the Federal Government to deploy funds to hire skilled people over 50 as well as provide funds for those who want to go back to school. Another option would be to provide tax breaks for firms who hire NEW employees over the age of 50. The unfortunate reality is that this Recession and subsequent recovery will be quite different from prior ones. It will take a major stimulus program and time for the economy to recover and grow and this will translate into job growth. Until then, many of us will be forced to take “temp” jobs.”
Friend, you speak the truth. This recession has clearly affected workers over 50 more than the rest of the workforce. The problems I see with your ideas, and they are all good ones, is the extreme stagnation and polarization of Congress. These ideas have all been tried or recommended before so people in opposition to them, from both parties, can shoot them down. I agree that federal government intervention in the ways you describe would help. I just don’t see it happening, and certainly not before the mid-term elections, and that’s over a year away. We can’t wait that long. We need to find a way to convince businesses that hiring is a solution, not a problem.
Only the best, Ron