does low unemployment mean things are good?

[nostatic]

Tabs wanted it...a separate thread.

A few years back ('96 I think) I was on the board of directors of a group trying to change the economic trajectory of the Inland Empire. The idea was to pair academic and business institutions, and try and foster tech transfer. The main problem is that despite booming growth in the area (number one in the country I think), the jobs are almost all service sector positions. As we so lovinging referred to it: a KMart economy.

Considering the offshoring that moves on unabated (although some consulting companies are making a killing helping other US companies to move things offshore), does a stable/low unemployment figure really many things are good? I would argue that we are in a steady state of losing high skill/high paying jobs, being replaced by low skill low pay. Sure, the overall number is the same, but the country and its people are MUCH worse off.

discuss...

[dd74]

No. One reason is you can't finance a house (in CA) or pay for a child to go to a good university on K-Mart wages. It's even more depressing when at one point the person who once had a rather technical and/or skilled job, now has to say "Double bag that, sir?"

[techweenie]

Here's how I see it:

This is a continuation of a 25-year trend that has gutted the number of 'middle' wage earners.

In the 80s, a lot of corporations started to go lean and spew out mid-management. A wave of entrepreneurialism was born. Franchise businesses, yogurt stands and tanning parlors... etc. because middle management had no more utility in big corporations.

Manufacturing was sen tout of the country and the higher-paid skilled labor jobs (machinists, etc.) disappeared.

Tech helped spawn specialy businesses in the 90s, expecially. But all throughout this period, the people with more general skills were drifting into the service sector.

In the three recessions of the past 25 years, while successful new business startups were down, once-established wage earners had little choice but to find jobe at Home Depot and McDonalds. The multi-level-marketing craze boomed, too. And every get-rich-quick plan imaginable sucked up the savings of folks trying to replace their comfy salaries.

The result is that the US worker has the highest productivity of any worker in the world -- partly due to the smallest number of days of vaction and the tendency to work far more than the world average of 30+ hours a week. What's suffered is Customer Support -- and corporations have been sending that to India for over 10 years now.

As skilled jobs like programming and web design go to India, it's a new wave of lost opportunity.

It's really creating a big gap between people at the top, who just can't ever seem to find enough places to spend their money ( $4-7 million homes around here are selling for cash), and people at the bottom ( I see more and more caucasian and black Ameircans on the street corners where 'day labor' gets picked up).

I think it'll all sort itself out eventually, but the transition is ugly and painful. Combined with excalating home prices in some areas, it means there's an underclass that can no longer expect a fraction of the stability, success and comfort their parents had.

[fintstone]

I don't know. I hear about all the High-tech guys that can't find a job while I have had to work 60-100 hrs per week for the last 30 years because my employers cannot find qualified employees. I was out in california last week at Edwards AFB (testing a B-52 modification). They have been advertising engineering jobs like crazy there for years. After all I have heard so much on this board about there being "no high-tech jobs left"...I was shocked to see a huge billboard on the freeway (14-Antelope Valley) that goes past the base begging for engineering applicants. I have been tempted to go there myself because the pay is better...but the housing costs more than absorb the difference. There are even many non-degreed technical employees working there that make as money much as I do. Work testing high-performance aircraft is a far cry from bagging groceries.

[speeder]

Fintstone, your example is definitely a valid data point then for good jobs existing, at least in your sector which sounds pretty specialised, but the problem in general is that employment statisics do not factor in the quality of jobs being gained or lost, only the quantity. And the U.S. has lost one hell of a lot of good paying jobs in manufacturing, etc....

[turbo6bar]

I agree with techweenie's analysis. The job market has been morphing for some time. It's nothing new. It's not a "Bush" thing. Is it necessarily bad? Depends. Nowadays, you pay a lawncare pro $50 a cut to groom, trim, and blow the grass off the sidewalks. 30 years ago, pop would drag out the reel mower. The shop where I get my hair cut charges $27 a cut. Don't tell me that isn't good money. No, despite the nice haircut, I'm still pretty darn ugly.

[928ram]

I notice that these types of discussions bring alot of comments from employers/employees in CA; it seems to me that the cost of living has outpaced reasonable wages in that area of the country. There does come a limit to what each man-hour is worth regardless of local C-O-L, and sooner or later companies will move to another state (or offshore) if they need to to be competitive in the market.

[jyl]

Coming at this from another angle . . .

Remember that the published "unemployment rate" is a fraction. The numerator is "unemployed persons". The denominator is "unemployed persons" plus "employed persons", which is called "the labor force". To be considered "unemployed" you must meet certain criteria, including having done specific things in the preceding 4 weeks to seek employment. If you don't meet those criteria, you are counted as "not in the labor force".

So the unemployment rate can move up and down due to persons moving from "unemployed" to "not in the labor force". That is what happened in August. The number of "employed" persons increased hardly at all - by 22,000 from 139,660,000 to 139,681,000, an increase of 2/100ths of 1 percent. However, 152,000 persons moved from "unemployed" to "not in the labor force". This caused the headline unemployment rate to decline from 5.5% to 5.4%. To repeat, the number of employed persons barely changed in August.

For details, see the the Department of Labor press release: http://www.bls.gov/news.release/empsit.nr0.htm

This is why you'll notice the financial markets seldom react to changes in the headline unemployment rate. What investors and economists watch is the actual number of employed persons.

Specifically, they pay the most attention to changes in the non-farm payroll number. This increased 144,000 in August, which is weak. Recall that the working-age US population is growing by appx 1.2%/yr. To hold the current ratio of employed persons to total working-age persons, the economy needs to add appx 140,000 jobs/month. So the August number is just "treading water". Although it is better than the appx 85,000/month added in June and July.

If you are quite geeky, it is interesting to pore over the data that the Department of Labor releases every month. First go to the DOL's website http://www.dol.gov and read the cheery statements by the Secretary of Labor, Elaine Chao. Then go to the Bureau of Labor Statistics website http://www.bls.gov/news.release/empsit.toc.htm and examine the data for yourself.

Here is one interesting thing I noticed. The government publishes an "alternative measure of labor underutilzation" number U-6, which is basically the sum of unemployed and underemployed persons to total labor force. The numerator includes people who are working part-time because they can't find full-time work. This rate is currently 9.5%, which is probably closer to how the job market feels to many people.

Or, if like many Americans you prefer to be told what to think, you can ignore all of this and simply listen to President Bush, who described the August numbers thusly: "it shows the economy is strong and getting stronger . . . our growing economy is spreading prosperity and opportunity, and nothing will hold us back".

[turbo6bar]

Interesting info, jyl. I guess the service jobs vs. tech jobs issue is moot when there are no jobs, period.

[jyl]

Yeah, I think overall the job situation is still pretty tough. I live in the SF Bay Area and work in the financial services industry, which have both been hit hard in the past four years, and I wondered if that personal experience was biasing me to the negative. That's why I started looking at the actual government data.

Of course, no matter what the economy is like, there's always some industries and jobs that are doing well.

I think bankruptcy lawyers and forensic accountants are finding work without much problem. And fintstone's area - the military - is a boom industry. Everything having to do with the military - from GIs (no problem enlisting as a soldier . . . ), to arms manufacture (the main factory making small-arms ammunition for the US military can't keep up with demand), and even civilian contractors serving the military - is doing great. Indeed, many parts of the government are doing pretty well, since the federal government has expanded significantly in the last four years (1/2 of the 144,000 jobs added in August were public sector-related - government, education, healthcare). So if you're lucky enough to be in one of those industries, you can feel pretty smug.

But private industry manufacturing job growth is very weak, private industry services job growth is pretty weak, and a worrisomely high percentage of the jobs added in 2004 are classified as "part-time self-employed" . . . otherwise known as "underemployed".

[Schrup]

I think that people who are trying to get somewhere career wise need to start out at the bottom of the right ladder. Taking an entry level position into a municipal or other government agency is a great place to start.

My bother-in-law is trying to get a better career after working as a tavern cook for the last 12 years. My wife is trying to convince him to apply at the hospital she works at, but he is dragging his feet. I don't understand this. There are great opportunities for betterment through training & education once you get into one of these systems.

I have been at the bottom of the barrel a couple of times, no money & unemployed with no car. I went out & found a job on a bicycle, worked my ass off till I could find something better, finally landing the job I always dreamed about.

Good jobs are out there, but if your not diligent in your search & not putting in 110% on your current job (for a good reference), you'll be lucky to land one.

[techweenie]

There is one web/marketing related group I belong to in L.A. and they frequently post "job offers" that are out floating around: offers requiring high levels of skill in web design and coding and maintenance and offering 'exposure' instead of pay, or offering essentially minimum wage for people who only 3-4 years ago were getting $50 -75 an hour for skilled web work -- and I'm talking about people with major portfolios; people in the top 25% of their profession. As somebody pointed out in a recent business networking event, most everyone there had two, three or more business activities they were pursuing just to keep paying the rent.

Now, the Web end of technology might not be typical, but a friend who is a CAD designer working in 3D; who was making $50+ an hour at Hughes Satellite in 2D 8 years ago, is making just over $50K now, and feels extremely lucky to have the job, since 60% of the people she worked with had to leave aerospace or even CAD altogether to find work.

It may be that So Cal is particularly hard hit, but I think the Bay Area is, too and possibly the Pacific Northwest.

[fintstone]

If a particular industry or area has weak employment and a person chooses to remain in that industry or area....the only person they can blame is themselves. Opportunities are out there if one is willing to be versatile and mobile.

[nostatic]

Q: What is the biggest challenge in "living digital?"

A: The biggest challenge is overcoming the fundamental disconnect between analog and digital (which we still don't understand very well), and the rapid pace of change. People have to be constantly engaged and learning, otherwise they are left behind.

http://nostatic.fm/blog/more.php?id=176_0_1_0_M

[350HP930]

Originally posted by fintstone
I don't know. I hear about all the High-tech guys that can't find a job while I have had to work 60-100 hrs per week for the last 30 years because my employers cannot find qualified employees. I was out in california last week at Edwards AFB (testing a B-52 modification). They have been advertising engineering jobs like crazy there for years.

I see a lot of jobs like this advertised here in the Tampa area too. Unfortunately they require an existing security clearance rating which people who have spent all their time in the civialian sector don't have. Either that or they require over a decade of experience since they arn't interested in training anyone for the job.

Keep in mind that when looking for specialty techs finding qualified employees is often limited by how many qualifications they require. A billboard for a job that only a handfull of citizens can qualify for does not change the fact that there are millions of americans with average skills that need a job.

I see you have claimed to have worked a hundred hours in a week? I guess if you want to count your time spent locked in a nuke bunker could make such a statement but no private employer should be stupid enough to pay that much over time and no employee should be stupid enough to work that much without making overtime.

[fintstone]

Originally posted by 350HP930
I see you have claimed to have worked a hundred hours in a week? I guess if you want to count your time spent locked in a nuke bunker could make such a statement but no private employer should be stupid enough to pay that much over time and no employee should be stupid enough to work that much without making overtime.

I worked over 100 hrs just last week. I don't work for a private firm, but for the federal government. I guess you didn't notice, but we are at war and sometimes a little sacrifice is necessary. You should be pleased your tax dollars are going so far. I am salaried and do not get overtime and am only paid for a 40 hr week. I guess my stupidity is why I still have a highly-paid, high tech job while others deliver pizzas.

[350HP930]

Thats a nice change concidering that just a few weeks ago you claimed to be unemployed. Contradulations.

[nostatic]

working 100 hours a week is wrong. In the end, no one will care...except for your family that never sees you.

[fintstone]

Originally posted by 350HP930
Thats a nice change concidering that just a few weeks ago you claimed to be unemployed. Contradulations.

Once again you misquote me...that is untrue and you know it. I have posted many time in threads where you have participated that I was no longer unemployed. Please show me a post where I claimed to be unemployed since June when I returned to work. This is September....I know....you're a liberal...it depends on the definition of "a few" or "is"......or whatever.

[fintstone]

Originally posted by nostatic
working 100 hours a week is wrong. In the end, no one will care...except for your family that never sees you.

Yes, it sucks, but it probably saved the taxpayer a couple of million dollars. We all contribute in our own way.

Working a extra hours to accomplish the mission is something we always did in the military...and those of us who support the military do as well. I try to keep my hours to around 60 whenever possible....I was under the impression that all you guys in industry did the same.

It is no different than the many years that I worked multiple jobs and went to college. Life is tough, but tougher when you don't have a job or money...or an education.