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A new normal for the job market?
Job seekers wait in line at the Choice Career Fair held at the Doubletree Hotel in Dallas, Texas.
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TEXT OF STORY
Kai Ryssdal: President Obama was on NBC this morning. Matt Lauer had him on the "Today" show for half an hour -- talking, for the most part, about education. It's no surprise at all, though, that the conversation turned to the economy and the job market as well.
President Barack Obama: As long as unemployment is as high as it is, as long as we haven't recovered as quickly as we should have, people are going to be hurting.
It's what he said after that, though, that caught our attention. That bad as things still are in the labor market, this country's not in a "jobless recovery."
We asked Marketplace's Mitchell Hartman to track that down for us.
Mitchell Hartman: As the president says, the private sector has been adding jobs since January -- about 100,000 a month on average. We had to wait years for significant job growth after the recessions in 1990 and 2001. But those were mild recessions. We didn't lose eight million jobs, and unemployment didn't get anywhere close to double-digits.
And economist Gary Burtless at the Brookings Institution says even though this isn't technically a "jobless recovery," it sure feels like one.
Gary Burtless: The growth in the number of jobs every month is smaller than the growth in the working-age population.
What that means is when you add in new high school and university grads, and parents returning to work, and people who got laid off and still can't find jobs -- the labor market just isn't keeping up.
Burtless: People like myself worry we're going to have very high unemployment for a very long time to come.
In fact, economists are divided about whether unemployment will ever get back down to where it was before the recession -- about 5 percent. That's what used to be considered "normal."
John Challenger at the outplacement firm Challenger Grey & Christmas is convinced it will go back down -- eventually. But he says it may not look much like the old "full employment."
John Challenger: Many more employers today are utilizing people on a part-time basis, as consultants.
Challenger thinks the trend is here to stay. He calls it "just-in-time hiring."
Challenger: They hire people on to handle their surges, but they don't turn them into permanent full-time employees.
Many economists believe the financial rescue and stimulus spending of the past two years have helped. They say without them, the economy might still be losing jobs today.
I'm Mitchell Hartman for Marketplace.
Two Myths for the Unemployed
Myth 1:
Knowledge industries are the future.
Problem :
Nothing is easier to move than information. There are smart,
educated, hard working people
all over the world - many living
in countries with a much lower cost
of living. Over time, this makes
most knowledge industry jobs
prime targets for offshoring.
If you are an engineer, computer
programmer,financial/business
analyst, architect, or
consultant - watch out!
More routine knowledge industry
jobs are also prime candidates
for automation or "deskilling"
(where computer decision support
reduces the required skill and knowledge required to perform the
task). This will be a particularly strong ongoing challenge given
current and future "ubiquitous computing".
There will be a small number of very lucrative jobs at the very top of knowledge and information industries.
Unfortunately, you are unlikely to
get one of these. These are
"rock star"/celebrity jobs. This
is not to say that the people
who have them aren't (usually)
excellent at what they do,
rather it's that merely being
excellent at what you do is
unlikely to land you one of
these jobs - any more than being
a good singer would make you
the next "Lady Gaga". These
knowledge and information industry
jobs are more determined by contact networks and social focality.
In all likelihood, for people in
the U.S. - with the absence of
any significant barriers to entry
for offshoring/imports - the jobs
that remain will be those that
require PHYSICAL PRESENCE - for example :
a dentist, nurse, janitor, emergency physician, police officer, plumber,
hairdresser, dog walker, etc.
Myth 2 :
Retraining is the key.
Retraining is a great way to remove yourself from the job market
for a long time, eat into any savings that you might have, and - most
likely - incur thousands, tens
of thousands or even hundreds of thousands of dollars in debt that
you will have a hard time paying
off. On the plus side, retraining
does stimulate the economy - like
other consumer spending - and it
does make the unemployment numbers
look better.
Pundits often emphasize that higher earnings have been correlated in
the past with higher degrees. This
is true, but not necessarily
causal. Pre-existing socio-economic
factors, pre-existing differences
in skill, talent and motivation,
and social networking considerations may provide significant alternative
explanations. Even if higher degrees have resulted in higher earnings in
the past, it may not still be true
now - particularly in areas
experiencing significant
offshoring. Education in the
United States is many times more
expensive than a similar education
in many other countries (where university education and other
training are often heavily
subsidized,free or simply much
less costly). Past performance
is no guarrantee of future returns.
Just think of how many unemployed
recent graduates there are on the
job market.
Employers frequently complain
that they can't find enough
highly skilled employees. Sometimes
this is an excuse to justify further
offshoring of jobs or importing of skilled employees. Much of the time,
it's simply that these employers
haven't bothered to look. Often,
they will only consider employees
in their personal and professional
network, employees with extremely specific experience - even when
related experience would be
sufficient, employees with a
specific background and demographic
-even when an older or otherwise atypical employee would do quite
well, and employees with no
stigmatizing holes in their
careers - something which can
cause them to overlook highly
skilled and trained unemployed candidates.
Retraining - with the exception
of on-the-job retraining - will
cause you to leave your
professional (and often personal)
network for a long time.
It will rarely give you highly
job-specific skills since most retraining focuses on more
generally applicable longer-term
knowledge and skills. While you retrain - your old skills - in
areas where you have work
experience - will decay and/or
become perceived as being
out-of-date. Your work experience
will become stale. Sometimes,
you may pass as being part of a desireable demographic
as a new graduate if you aren't
too old, too experienced, or
too highly/frequently trained. Retraining can help give you a
new professional and personal
network, although often this will
initially be a large network of
job-seekers or junior employees.
On the plus side, retraining can
also cover a hole in a career
caused by protracted unemployment
and a bad economy - but this is
a steep price to pay in terms of
time and money.
Don't get me wrong - knowledge is
a wonderful thing. But - other
than on-the-job training -
retraining may not be worth the
price - and it is certainly not
a panecea for unemployment.
It's time that economists and other policy analysts take a closer
look at myths for the unemployed,
and try to find practical policy approaches that will actually
generate jobs.
