More Jobs, More Poverty

Two items snatched from today's news:

The number of people who filed unemployment claims last week dropped to the lowest level since May 2008, according to the Bureau of Labor Statistics.

At the same time, the U.S. Census said 48 percent of all Americans either live below the poverty line or fall into the low income category. That is 148 million people living in the wealthiest nation on earth.

Seems like we have a ways to go before we can accurately use the words economy and recovery in the same context. 

Good News/Bad News on Jobs

U.S. unemployment declined to 8.6 percent last month, the lowest level in more than two years, according to the Labor Department. That's worth a glass of champagne for those of us (everyone) exhausted by negative economic news.

However, some economists warn we shouldn't get carried away with ourselves.

For instance, Mark Zandi, chief economist for Moody's Analytics, told Bloomberg that a major factor in the decline was a drop in workforce participation to 64 percent. Calculating in that factor, unemployment is really at about 11 percent, he said. In addition, underemployment is about 15.6 percent.

But, while the improvement seems soft, the trend is up and the experts say that reduces the chance of another plunge into recession.

That alone might be worth a second glass of champagne.

What Job Growth?

Before everyone gets too giddy over the positive (and welcome) job growth figures, let's put them in perspective.

If jobs continue to increase at the current pace, sometime in 2014 employment will return to 2008 levels.

That would be good only if the population had stopped growing in 2008 and the number of people in the labor pool remained the same.

Therefore, moderate job growth is a positive, but it's going to take an economic tsunami to create enough jobs for real, rather than nominal, growth.

Nobody Loves Ya When You're Unemployed (And Educated)

Dorothea Lange

Breakdowns of unemployment statistics make it clear the more education you have the less likely you are to be jobless. For instance, the overall unemployment rate in November was 9.8 percent. For college grads it was 5.1 percent.

Hooray for education, right? Not if you're part of that 5.1 percent.

For one thing, the numbers show the more education you have the longer you will be unemployed. Over 45, a college grad and unemployed? The only part of that description likely to change in the near term is your age.

I recently read about a woman who demonstrated with numbers how her experience made her more productive than younger workers. Her boss said she didn't care because she could hire two new college grads to cover the same amount of work and still save money. The cash register rang and the older worker was out the door.

I've talked with small business owners who would never hire someone with a college degree for a job they perceived didn't require one. They reasoned that the over-educated employee will head out the door at the first glimpse of a job that is more engaging and pays them what they think they're worth. (They might want to rethink that: 42 percent of the jobless have been out of work for more than six months.)

The last census update reported 27 percent of Americans hold a college degree. Do the math and find 4 million literate, middle-class, unemployed people who find it harder to get a job than someone with a high school degree.

Hooray for education?

Photo: Dorothea Lange

Street Economics 2Q 2009

It's Revenge of the Parents Time for young people who assume they can move back in after graduation. Articles offering mom and dad advice on how to get rid of the kid are popping up all over the place.

Not so long ago I sneered at the extended adolescence of young people who assumed it was socially OK to live with the parents well into their 20s. Now, instead of emailing get-rid-of-the-kids stories to friends, I'm taking a more understanding tack.

After all, unemployment nationwide is at 9.4 percent and there are many states and regions with official jobless rates well into double figures. Also, multiple reports say a scant 20 percent of this year's grads have jobs lined up. Experienced workers are duking it out with them for entry level jobs. Even MBAs are taking hits in salaries and status.

So, at least until Q3, I will forgo eye-rolling when a young person ruefully admits to cohabitating with Mum or Da because it might not be their fault.

Besides, a bit of sympathy might get me a free drink.

A Fantasy Job Ad

We seek a highly professional (insert job) to help take our company to the next level.

The ideal candidate will have at least 10 years of relevant experience coupled with a track record of increasing responsibility that goes beyond mere job titles. Deep management experience is a must because he or she will be responsible for building and leading a diverse team.

This position requires energy, creativity and first-rate organizational skills.

Note: Regardless of other qualifications, applicants must prove they were born on or before Jan. 1, 1968 to be considered. We do not discriminate on the basis of gender, race, ethnicity, country of origin, sexual orientation, religious beliefs or disability.

Take This Job And .....

I recently asked LinkedIn members if they had ever walked into a boss' office and declared, "You can take this job and shove it." The best answer came from Bob Fornal of Columbus, Ohio.

" I have. It was pretty depressing how few people actually cared."

Man On The Street Economics

The gurus say economic growth will slow in 2007 but not so dramatically that a recession will bite. I am more optimistic.

Of couse, my way of measuring economic health is less sophisticated than the methods used by the pros.

First, I navigate to craigslist and check out postings for jobs highly sensitive to economic ups and downs, such as those in PR and advertising. The number of offered positions is growing, so companies are confident.

Then, I walk down the main drag near my home in Palo Alto to see if fast-food restaurants and carwashes sport "now hiring" signs. The banners are flying, so folks with only basic job skills can find jobs paying more than $10 an hour.

About a mile later, I drop into my favorite hangout, La Bodeguita del Medio. Difficulty finding a spot at the bar before 6 p.m. on Friday means people have plenty of discretionary income and are willing to spend it. There was a big crowd last night.

A couple of minutes online, a brisk walk and a comforting cocktail. It usually works.