Remember the advertising slogan – “Where’s the beef?” Now it is “Where’s the jobs?”
People who are in their mid to late 50s who would otherwise be working for another 10 years or more now may simply decide to stay out of the labor market. That is a lot of lost manpower and lost productivity. By the broadest measure, some 41% of the total U.S. population over 16 is not working – a rate that has barely budged since the recession ended in June 2009. The share of men in the labor force is down to about 70%, the lowest level in the more than six decades that the Labor Department has been tracking the data.
Economists and politicians don’t seem to agree on why the economy’s hiring machinery is sputtering. There is a widespread consensus, however, that millions of jobs go unfilled in the U.S. because employers can’t find skilled workers. And there is less agreement on where the money will come from to train these jobless workers. There also appears to be a mismatch between the skills being taught in schools and those actually needed in the workplace. For the 1.6 million bachelor’s degrees awarded in 2009, fewer than 90,000 were in engineering.
Younger workers are having a hard time getting careers started and older workers are at a greater risk of leaving the workforce, whether by choice or not. Among unemployed workers 45 and older, nearly 11% have been out of work for 99 weeks or more. The cost of so many people out of work for so long is impossible to calculate. The joblessness also has wide impact on our economy with fewer workers contributing to the growth of overall economic output and consumer spending which accounts for roughly 70% of GDP. The result is something of a vicious circle – fewer workers means less spending which holds back growth that would otherwise prompt employers to boost hiring.
It is not just the scarcity of jobs that’s hurting Americans, it is also the wages workers are paid for the jobs that do exist. For the average worker, earnings adjusted for inflation have decreased over the last few decades. The average hourly earnings for all employees in private non-farm payrolls increased by only $0.10 cents to $23.13, bringing the increase in average hourly earnings over the last year to 2.3% – a figure that is not adjusted for inflation. Another recent study by the National Employment Law Project, found that low paying jobs have dominated employment growth during the recovery. Many of the jobs filled in the last 36 months have been in the hourly range of only $13.83 or less.
The U.S. economy needs to add around 150,000 to 200,000 jobs each month to bring the jobless rate down. But it appears that the reverse is happening. More job cuts are making the news: Amex – 5,400 layoffs, Morgan Stanley – 1,600 layoffs, UBS – 2,000 layoffs, and the U.S. Postal Service has cut 28,000 of its jobs over the past year while still losing billions of dollars. This short list is a just a small sample of the bad economic news facing our nation.
For 2013, the outlook is not all that positive: 17% of U.S. employers surveyed by Manpower expected to add to their workforce in 2013; 8% expected a decline in their staffing levels; and 72% of employers anticipated no change to staff levels. It seems as if Washington moves from crisis to crisis with no definitive action. President Obama introduced a Jobs Bill in the Fall of 2011 that never gathered enough votes to make it out of the Senate. We do need to go back and readdress this employment issue and see if there is a way through a combination of tax incentives and work programs, work that is being performed outside the United States might be brought back to this country. We cannot afford to wait for the normal course of events to correct our jobs crisis. We need to do something positive now.