Real Unemployment Rate: Despite Marginal Gains, Employment Problems Threaten Economy
Last week's announcement of the .3% drop in the unemployment rate was a positive diversion for the White House after President Obama's less-than-stellar debate performance. But the new unemployment rate of 7.8% hardly warranted the high level of attention it received, because it does not adequately reflect long-term employment issues, nor give any indication that the country's economic health is improving. In four years, the unemployment rate has not yet fallen back to 7.6%, the level it was at the end of the Bush administration.
Along with our rising national debt, Americans are increasingly concerned about the economy and spending. The issues of job growth, the long-term unemployed, the part-time employed who want to work full time, the many who are no longer counted because they have been out of work too long or have given up, and the low number of new jobs are all of particular concern when it comes to employment in America.
Here are some of the most pressing issues when it comes to employment and the economy in America.
Job growth has been called "anemic," and it could soon get much worse. 12.1 million are still unemployed! All this is before Taxmageddon (the $500 billion tax hike) hits on January 1 — unless Congress and the resident can quit arguing, and Congress acts to prevent it. Based on the most recent Update to the Budget and Economic Outlook provided by the Congressional Budget Office, the Heritage Foundation estimates 1.6 million more jobs could be lost when Taxmageddon comes.
4.8 million Americans are long-term unemployed. Fewer than 1 in 5 job seekers found employment last month. Those who have been unemployed for extended periods of time find the search the most difficult. I can attest to that, as I am one of those who hasn't found full time employment after more than a year of hard searching, hundreds of resumes distributed, and dozens of gallons of coffee consumed while "networking."
A 600,000 rise in involuntary part-time workers in September. According to the Bureau of Labor Statistics (BLS), "These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.”
Underemployment is 14.75 % or - 23.2 million. Many of us who are or were unemployed have taken on part-time work while we continue to look. We count as employed. Our temporary, part-time, and "moderately-ok-for-the-short-term" employment situations have to do for now. We aren't contributing much to the economy (or taxes) because we aren't spending, and we are making a small percentage of what we were. In many cases, we are working far harder for far less. Including all five of my part-time jobs/clients, my income this year will be barely 20% of my full time salary before benefits, and I still work more than 40 hours per week.
The increases in employment in September were in the fields of health care, transportation and warehousing. Executive jobs can take longer to find, are usually advertised nationally and are very competitive. Some employers still cannot find employees with the right skill sets. The unemployed may be forced to apply for jobs below their skill level. In my case, I have been complimented for my excess of qualifications, but also told that that is a hindrance because employers don't trust that the overqualified will stick around. My social networking skills and active Twitter life may not fool employers into thinking I am younger than I am. Interestingly, adult women saw a small improvement in unemployment in September, from 7.3 to 7.0%.
Only 114,000 jobs were added in September. Total employment rose by 873,000. In an interview on Fox News on Friday, after the September numbers were announced by the Bureau of Labor Statistics, Jack Welch, former CEO of General Electric said, "I've been interviewing CEOs this week. No one's stronger in the third quarter than they were in the second quarter. It doesn't seem to correlate with the surge in employment."
According to the BLS, "in September, 2.5 million persons were marginally attached to the labor force." They “wanted and were available for work,” but “they were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.” In short, they gave up.
There are some significant economic factors that are not encouraging for job-seekers, or for the employers who may be holding back on creating jobs until the future looks a little brighter. Among these are taxes, debt, consumer spending, public opinion, government spending, and poverty indicators:
Manufacturing employment was down by 16,000 in September. We have the highest corporate tax rate in the world. How does that encourage productivity or confidence to hire new employees? The national debt is more than $16 trillion —$50,900 for every man, woman and child in the U.S., and over $200,000 for a family of four. How scary is that? Americans seriously doubt that higher taxes will go toward tax reduction, according to a new telephone survey (Oct 1-4) by the Tarrance Group. Nearly three-quarters (73%) of men and two-thirds (67%) of women in the Tarrance survey say less spending would do the most to grow the economy over the next four years. Government spending as a share of the economy has averaged about 20.7% over the past 40 years. It has stayed around 24% during the Obama administration, higher than it was during the Bush administration. Under President Obama, the number of federal employees grew by 123,000 (or 6.2 %), according to the Office of Management and Budget in January 2012. 55% of the respondents in a small business survey by the National Association of Manufacturers and the National Federation of Independent Business felt that the national economy "is worse today than three years ago." In the same poll, 67% stated that there is "too much economic uncertainty in the market today for them to expand, grow or hire new workers." A record was broken in June when the number of Americans on food stamps hit 46.7 million. 31.9 million were enrolled in the program in January of 2009.
Many have been waiting for too long for jobs and economic recovery. More than 2.5 million aren't even counted as unemployed; they simply gave up trying to find a job. Economic growth is important, and the $16 trillion debt load is holding it back. The millions of Americans who are unemployed, under-whelmed and unimpressed need the economic turnaround that will increase the number of new jobs and give employers confidence to hire for the long-term. As an under-employed involuntary part-time worker, I'm not feeling encouraged by these statistics and I really would like to be.
What can you do to help the unemployed? Try one of these 10 tips. You'll be glad you did.