Why the Unemployment Rate Still Stinks
How are you enjoying our economic recovery? Profit among the S&P 500 companies are at record levels. Our GDP growth is anemic at around 2%, certainly not the 3-5% we would normally expect, but it is the longest string of years of economic growth since the Depression. What gives? Do you not feel the love? That is cuz unemployment remains stubbornly high.
7.4% is the “official” unemployment rate, but, unbeknowingst to many, there are many ways to measure it. A more relevant measure includes those of us who are only part-time employed (which includes yours truly), or those of who have totally given up. This measure, known as the U6, is around 14%. As much as 1/3 of the “young” are unemployed. The total % of adults who “participate” in the workforce are at lows not seen since the Great Depression. So you see, things are actually much worse than the “headline” unemployment rate.
HIB VISA FIB
It is making the rounds that tech companies do not have enough qualified candidates to fill their vacancies, and therefore need more HIBs to import techies to hire. Not true. If we say “there are not enough qualified candidates willing to fill our vacancies at the wages we wish to pay”, then they are correct. Truth be told, there are legions of qualified, experienced tech employees whom employers could hire to fill vacancies. In my case, I am a qualified journeyman-level COBOL programmer whose career history commands a salary of not less than $100k. Good luck finding an employer willing to pay that: they would rather hire 3 contract programmers from India who command salaries of, at most, $35K, despite the fact I can (and have) coded programming rings around teams of these contract employees.
JOB OPENINGS ARE NOT
There was one article (OK, my search-fu is weak; I could not find it again) that questioned whether an advertised job vacancy was real. I second the doubt. Having several job openings for several months has its PR and political value. If they receive applications? Just chuck it into the circular file, and never even have job interviews. Also, one sign of a company in trouble is that they do not have open positions, are not accepting job applications, and do not schedule job interviews. Having several open positions for several months is surely a sign of the strength of a company, yes?
For decades, Mexico has used our country to solve their poverty problem. They simply helped her own citizens pile across our border without green cards to find their fortune. Besides being illegal, it kills young people, minorities, and those with no job experience: they no longer can have the same jobs I had at that point in my job history, and helped my career off to a good start. Given the painfully high numbers of legit people in our country who cannot find a job, it makes no sense to be kind to the interlopers. The greatest boon to the unemployed would be to get the latter to go home (not that this is practical).
KILL THE MINIMUM WAGE
As long as the minimum wage stays were it is at, or even increasing it, unemployment among the most vulnerable will never improve. See, only young people or those reentering the work force work for minimum wage. And the higher the minimum wage, the fewer of these applicants will ever find their first job. Those who exposit that a low minimum wage makes a worker unable to support themselves, let along a family, and is therefore immoral. Ahem: those will work at minimum wage, but only for a limited time. If you are employed at the same place for 6 months and are still earning only minimum wage, then there is something wrong with you personally (or see 'Mexico' above). Cutting or eliminating the minimum wage would instantly create millions of jobs.
EXPERIENCE NOT NECESSARY
It was not too many years ago that the prospective employee would read that or something akin to “will train”. As long as you had the relevant prerequisites, the employer would be happy to train you. This does not seem to be the credo these days. Employers wish you to hit the ground running, expecting your very first day to produce 8 hours of work equivalent to a veteran employee. Training hurts the bottom line, and many companies big and small seem to prefer an empty chair to training costs.
FROM FULL-TIME TO PART-TIMERS
A major problem with the jobs 'created' in the past couple of years, is that a majority of them are part time jobs and not full time. It is easy to blame Obamacare for this peculiar phenomenon, but I do not think so. I think many made the same discovery I did (in manufacturing) that if you cut back a full time employee to part time, the reduction in output is smaller than you might expect than from punching buttons on your calculator. Therefore, they become more efficient.
Unless there is a radical change in one or more of the above, and I do not expect it, I think that 7-8% unemployment is the new normal, not the 5.8% average since WW2. Get over it.