What can we do about U.S. unemployment?

Just like this morning’s post about mortality rates was close to my heart due to recent brushes with family and death, so too is this post about the current state of the U.S. labor market. I’m technically a full-time student at present, although my class schedule is such that I really only have class on Thursday evenings; as a result, I’m looking for a gig (this blog has been fun, but otherwise my days can be boring, and uh, I’m broke). The new unemployment data — your one-word takeaway would be “stagnation” — is of interest, thus (although if you look at how to define the ranks of the unemployed, I’m not actually one of them).

Still, back to the numbers for a quick second. Construction, wholesale trade, transportation and warehousing all seemed to increase; the overall unemployment rate was little changed at 7.2 percent, which some have argued is realistically closer to about 13 percent. Long-term unemployed (more than 27 weeks) is at 4.1 million, which essentially means that the entire population of Houston and Chicago hasn’t been working for about seven months or more. That can’t be a good thing for the economy, in the broadest sense.

I’m more interested in what to actually do about the problem, but I’ll get there in a second. This is my personal observation, from the current job search process and jobs I’ve actually held in the past: the most important things to companies in a capitalist society is money. You can argue that and say things like “work/life balance,” which for many core employees could be No. 1, but as a collectivist whole, companies — be they large or small — are looking to make money. What I’m about to say is a bit simple-minded and lacks some logic, but I honestly believe that when choosing between two candidate options, a company will almost always select the person they can pay less, not the best person. Sour grapes? Maybe. But I doubt I’m the best person a lot of the time either, so realistically, no. I think that when people say stuff like “We build through people,” that’s ostensibly BS. You build through cash flow and you hope the people can do their jobs functionally well enough to keep the product lines or central service moving. As technology has expanded, I think it’s been much easier to retain a less-capable, less-well-compensated work force — and actually divide up the work between a smaller amount of people, meaning that tons of people who’d be great fits for a specific job here or there aren’t even getting a look.

Alright. Soapbox over. Now … what do we do?

The first thing everyone says (Google “unemployment solutions,” for example) is “SMALL BUSINESS!” I got a D+ in microecon in college, so I’m not equipped to be discussing this at any kind of broad level, but that doesn’t seem like the proper solution. This 2009 Washington Times article makes an interesting point: another thing we often discuss is the creation of work projects, but … FDR’s WPA, which was one of the grandest notions of that type in U.S. history, employed 3.3 million people (the equivalent of 10 million people today) and unemployment stayed in the low 20s, which is around where Spain is right now. So .. the issue isn’t work projects or “green jobs,” per se. WonkBlog proposed four ideas, the first of which is “better training programs.” There have been arguments made that laid-off workers lack the evolving skills to get re-hired at their old rates, so perhaps some kind of subsidized training via the government would be helpful. This Forbes article, from around the time of the “binders full of women” comment, indicates that jobs between “technology” and “rote” are getting squeezed out, so maybe finding a way to make technology more open to everyone — i.e. what Khan Academy attempts to do for education, kinda — would be helpful. And maybe the problem really is all about education — Eric Schmidt basically said that at Davos.

The Coca-Cola CEO seems to care, which is a good start (Fortune 500 companies likely have a bit more flexibility in terms of some of these things, but also an elongated process for hiring):

This article, recently posted on Forbes, has an interesting section about the need for predictable policy — which is starting to slowly return some confidence in the Eurozone. I just spent a while searching most networks, from Google to Reddit, for more innovative or economically-smart-sounding solutions, and mostly what I got was “commitment to education,” and/or “commitment to innovation,” and/or “closing the skills gap.” So I guess the issue really does come back to education and training, which is worrisome, since those are long-term investments, and the U.S. is a quarter-by-quarter society. I’ve said this to my friends a half-dozen times in the past few years: what if someone could come along who could do for training and education and debt relief (student debt, that is) what Jobs did for the iPhone? That would be pretty useful, no?

Before I depart this post, a cool (if outdated, since the info only goes up to early 2011) time lapse of U.S. unemployment by county:

3 responses

  1. […] comes from furloughed workers counted as unemployed, but you can also make an argument that 7.3 really represents a number closer to 13 percent – and if that’s the case, more than 1 in 10 Americans is looking for work. This […]

  2. […] The Other Big Takeaway: There were positive associations between the Milken cities and “share of adults that are college grads” (.41 correlation) and “share of the labor force made up of knowledge, professional and creative workers” (.35). The main author of the Best-Performing Cities is Ross DeVol; he e-mailed The Atlantic regarding their analysis articles and said “It really is a talent/human capital story this year (as relates to tech).” That part I find interesting: often, you see companies who view the world now as kind of a “poach is greater than develop” paradigm — meaning, if you need a good person for a gig, you’ll go out and find that person, rather than develop said person internally. This has benefits, but it can cause a lot of issues too — it can basically de-motivate everyone you already have in-house, because it’s clearly not a place that focuses on promoting from within, for example. Rarely, though, is the focus in companies on the people; it’s typically on the product/output or the bottom line. It often seems to me that the people are superfluous to the process in the eyes of many. I’m not sure why this is — I think one reason is that the most logical place for people issues to be tasked through is Human Resources, and we’re still in an era (gradually shifting from it, but still in it) where people at the C-Suite Level came up viewing HR as “personnel,” and don’t feel it should be empowered. That’s one thing I’ve seen in places I’ve worked. Another is simply a disconnect between HR and the direct managers that would oversee a new hire; often the communication is crappy and the wrong people end up coming in for interviews. That’s a whole ‘nother issue, though. […]

  3. […] know about salad forks or nice shoes, so I’m a little behind in those areas, for sure. I’ve talked about hiring on this blog before, and talked a little broadly about HR (I’m actually really interested in doing […]

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