A New Norm…

Rate this post

Unemployment, the “New Norm”

Jeremy Greenfield published an article yesterday on Yahoo! Finance that sates Americans looking for work should get used to having a harder time finding it. The unemployment rate is currently 9% and could take until 2016 to reach the natural rate (around 7%). Economists say the figure will be held higher by a skills mismatch in the labor market that has been growing since the 1970s, the recent extension of unemployment benefits and the 2009 minimum wage increase.
“Businesses are looking to hire, but the workers they are looking to hire are not there in the abundance that they want them to be,” Mark Vitner (a senior economist with Wells Fargo) said. Slightly more than half of U.S. businesses are having trouble finding the right candidate for open jobs, according to a survey released today of 1,322 U.S. businesses by global recruitment firm ManpowerGroup. In 2010, only 14% of respondents had similar gripes.
The structural changes that have the strongest effect on the natural unemployment rate are long-term shifts with prolonged consequences for the economy, according to Diane Swonk, chief economist and senior managing director at Mesirow Financial, a Chicago-based financial services firm.
Bart Hobijn, an economist at the San Francisco Federal Reserve, pegs the natural unemployment rate at about 6.5%, and attributes much of the upward shift to the extension of unemployment benefits and surprisingly slow hiring for the high number of job vacancies, which now number over 3.1 million, according to the Bureau of Labor Statistics.
Ironically, extended unemployment benefits and a higher minimum wage — a reaction to the higher unemployment brought on by the recession — contribute to a higher natural unemployment rate by encouraging more people to put off working and discouraging employers from hiring minimum wage workers.
Whether the natural unemployment rate is 5.2% or much higher, the real unemployment rate is still 9%, meaning that there are more than four people on average competing for each job opening.
So hows that “hopeandchange” working for you?
DCG

Please follow and like us:
0
 

0 responses to “A New Norm…

  1. They did say something about “fundamentally tranforming” America… hope Demo-rats aren’t going to run on that in 2012 (or, on second thought, maybe they should try it… best thing they could do for the GOP).

     
  2. Get used to the New Normal of no jobs!
    Who woulda thought that’s what he meant by “Hope and Change” in 2008? And yet the same idiots who voted for this man will do it again in 2012.
    Lemmings….

     
  3. lowtechgrannie

    I’ve been unemployed and looking for work since my company founded in 1946 closed in 2010 due to the economy.
    The federally mandated EEO checklist on each job application requests people to self-identify sex, ethnicity, veteran status and disability status. I wonder to what extent this information is used in hiring decisions. I have a feeling being a minority female with a disability trumps experience and good references. I’m not saying it’s due to political correctness; but, there may be a federal tax benefit to hiring people falling into certain demographic categories.

     
    • No white male veterans, they might be crazy; but if hire Shanequa with three kids, no husband and a Fifth Grade reading level, we’ll get more Federal contracts!

       
      • lowtechgrannie

        I had a job interview a month or so ago through a very reputable staffing agency. The company wanted 50-60 applicants to fill 9 customer service aka call center positions for a large medical insurance company gearing up for the business increase anticipated with Obamacare.
        The staffing agency required about an hour long online test to screen candidates. Interviews were scheduled based on test scores. I was the 2nd person to be interviewed.
        I heard later unofficially through the staffing agency grapevine that the candidates who were actually hired were THE LOWEST SCORING people! They were into the “goth style” with black painted fingernails, etc. These are the people who are on the other end of the line when you call in with medical insurance concerns!

         

Leave a Reply

Your email address will not be published. Required fields are marked *