Is the economy really destroying the job market?

I am so tired of picking up job ads and finding hardly any for bachelor degree holders. On a good day there might be three job openings with over six hundred candidates trying for the opening.

 

In a word, yes. Over the last two months 400,000 jobs were eliminated. The current unemployment rate has hit 6%. And 2.5 million people have been searching for 27 months for work. The global economy which puts total emphasis on cost is a great contributor to this situation. If you are unaware that recession means far fewer opportunities as companies implement hiring freezes and downsize, you might want to review your Economics 101 text. Good luck in your search!

 

I was just reading the May 2003 issue of the trade magazine Embedded Systems Programming, which discusses a Bureau of Labor Statistics report stating that more than 120,000 U.S. computer scientists and electrical engineers were unemployed at the end of 2002. Depressing.

 

Yes, the economy has put a huge slump in the job market. I work at a call center that takes incoming support calls. The center has many people with bachelor's degrees earning $10/hr answering phones. Times are tough for all.

Cy

 

Times indeed are tough. It is my understanding that after a certain period, the long or chronically unemployed cease to be calculated in the statistical data, therfore, current unemployment inormation is likley highly underrated.

 

Not only is the market tighter, but the desperation of job hunters and recent layoffs by individual companies has created a situation where employers that have opening are reluctant to advertise them. In explanation of my points: a company advertises for a single position and gets so many resumes (hundreds or thousands) that they get buried and have no way to sift through all the qualified candidates. The result is they stop advertising for openings. Likewise, many companies that have downsized in the last couple of years are afraid to advertise recent openings because they don't want to appear disloyal to those laid off (and whom they likely have reasons not to rehire).
The sad result is that those few openings that exist are largely hidden and you need to have industry or company contacts to learn about them. While some employers see this as a great time to snatch up good talent for a low price, most think it is an uneven playing field that forces them to artificially limit their pool of candidates.
Good luck, Dan
(My work involves publications for the recruitment industry and recruiting efforts by Silicon Valley companies -- so I know as little about this as anyone ... )

 

Appropriate articles

Labor stats simply do not tally discouraged workers -- more folks than our government wants to admit are simply no longer looking after two or more years of unemployment:

http://www.nytimes.com/2003/04/27/national/27JOBS.html?ex=1052712000&en=317bce1ffc74d482&ei=5004&partner=UNTD



The NYT article interviews more than just techies--

http://www.nytimes.com/2003/04/13/magazine/13UNEMPLOYED.html?ex=1051761600&en=8ae0f26cf2f55b00&ei=5070

"Jeff, who is 50, lost his job at Rapp Digital almost two years ago, making him one of 21,000 computer-industry professionals in New York City to have been let go since the end of 2000. In percentage terms the numbers are even starker. Between December 2000 and January 2003, the industry slashed 41 percent of its positions.

While the recession of the early 90's took a heavy toll on white-collar workers, this one seems to have institutionalized the phenomenon. Advanced degrees, no matter how prestigious, offer little protection. The economy is grim nationwide, but the picture in New York City is especially bleak. Since the end of 2000, the media-and-communications sector has cut 15 percent of its jobs, telecommunications 27 percent, advertising 25 percent. Eighteen percent of jobs on Wall Street have been slashed, and firms continue to lay people off. Given the delirium with which most high-tech jobs were first created, there's no reason to believe that many of them — and the jobs in other sectors that they generated — will come back anytime soon. "



http://www.computerworld.com/careertopics/careers/story/0,10801,80657,00.html

"No fear, I thought, I have an academic record that will impress employers and help me stand out among job candidates. I had graduated magna cum laude, made the dean's list multiple times, won awards for academic excellence -- and no one seemed to care. The liability of my inexperience seemed to outweigh any advantage that a solid academic background provided."

 

I may be an economics simpleton on this, but I am a simpleton with the convictions of his opinions. Let me first say that I have absolutely no political bone to pick with any current of former administration. I don't play the game of my party is better than your party.

It seems to me that the whole boom of the mid/late nineties and the current economic/employment problem is directly related to the farce that was the high tech boom (1995-1999). The lay person looked at the Internet with as much intelligence and reason as HR professional look at distance education and bogus accreditation.

When the internet boom came on the scene, folks with money, who wanted more money, saw it as a Genie in the bottle-money making magic gold dust-new phenomenon that would make us all rich and never ever be responsible for conforming to traditional laws of economics. That law being that, sooner or later, a company actually had to turn a profit or bad things happen

All the high tech demand in the marketplace was fueled by this internet mentality that said everyone needed an updated computer and the most current software. And there had to be many folks that could program (or pretend to know how to program) so that every company and government organization would be sure to stay minute to minute current with the latest IT buzz.

The bubble burst when the reality of old timey economics sooner or later won out over pie in the sky hocus pocus economics. Where were we as a country when the make believe world of invest and earn at a rate of 30% annually was hypnotizing our collective rational capacities.

The piper had to be paid eventually, and I believe that is what is happening now. I only hope that, in my lifetime at least, we don't collectively lose our capacity to think rationally about economics again.

As they say, you can pay now or later...later has arrived. We all hope it passes soon and we can get back to better, though possibly more rational, times.

 

This is all related to another problem that is rarely discussed -- underemployment.

For example, I know one person with a Ph.D. who is working as an automechanic, and another who is working as a blackjack dealer.

Who knows how many people with degrees are out there working at jobs that do not require those degrees. On the bright side, it means that our economy has a vast amount of unrealized potential.

 

Another byproduct of the tech boom is that it may have created very unreal expectations of what the job market should be. We're all complaining about the current market (6+ percent unemployment) because it feels dismal compared to the high 3s and low 4s of 1998-2001ish period.
But you don't have to go back too far to find much higher unemployment numbers, many of which lingered for years. In the mid-1970s, unemployment hovered in the 8%s, all through the early '80s it ranged from 7.5-10.8% and even in the early '90s it rose back up to around 7.5%.
A return to economic normalcy may not be what many recent grads or younger workers hope for.
On the bright side, a lot of us older farts found our first jobs when the unemployment rate was double digits. Back then the standard signing bonus was some new office supplies and maybe a "welcome" lunch.
Dan

 

What we have here are a couple of folks that came to their senses.

 

While I appreciate this post and that of PaulC's because they both demonstrate common sense and realistic mindset, I have to mention that the unemployment figures are understated lately because of the length of unemployment stretches on average per person.

I hardly believe that 6% unemployment reflects the reality. I tend to think, based on personal experience as well as related statistics I have read, that the unemployment figure is closer to 9 or 10%.

I do not think this figure is acceptable, in light of rampant immigration, lack of focus on the economy by the current administration, and the idea that perhaps the future of America is in the pursuit of scientific-minded research and development that is surely regressing while our educated potential heroes are dealing black jack (and their counterparts overseas in certain countries are doing exactly what they studied for a living).

 

PaulC hit the nail on the head. When a company has never made a profit except for the sale of stock, we have trouble. When an entire segment of the economy is that way, the bills come due. You throw in that companies in the late 90's (probably before) took to flat out lying on profits and you have trouble.

The stock market had IMHO the worst problem it could ever have. It was not worth what people were paying for the stocks it sold. Common sense in the dot com craze told you a crash was coming. Isn't it true that the only profit som dotcoms showed in the first years of the company was from sale of stock? That's non-profit charity. You should get to deduct that from your taxes giving to companies like that. They may be more solid now.

Basically the stock market for the years leading to the crash was more of a pyramid scheme, or maybe a trapezoid, rhombus....?

 

Heehee. That's funny. If the whole economy was built on dotcoms, then we were in trouble anyway. The dotcom bust just delayed the inevitable.

For obvious reasons, I disagree that dotcoms are totally responsible.

I think corporations should take responsibility, especially the VCs with gray hairs that "pumped and dumped."

 

It's true that the current slump has disproportionately affected highly educated, white collar professionals. So yes, degrees offer no talisman of protection. It's all part of the jobless recovery.

And there is the problem of rampant ageism. Gum snapping 20-somethings in Inhuman Resources are screening out older, educated and experienced applicants. Apart from the mythology of people over 40 being senile, unhealthy, and unmanageable, what's the scoop? The real reason is that to remain competitive in the global economy, where low price is king (meaning low cost is the Host in the tabernacle), that means that only the "young and cheap" get hired these days, incompetent or not. Doesn't matter, as management knuckles under to shareholders, arbitrageurs, and industry analysts fawning and swooning over EPS. Sadly. many unemployed over 50 will never work again. Nothing will save them--not a hyped and hawked resume, not a headhunter, not an internet job site, not networking through the mirage of fleeting visions promising the potential possibility of the proverbial foot in the door. I fear Jeremy Rifkin was right but nobody paid heed. We're sliding toward the End of Work.

 

Some may call you "chicken little" or "tinfoil" for saying that. I happen to feel the same way you do.

I work in an HR outsourcing company that replaces HR departments for small to medium-sized companies. The way we do it is technically called "employee leasing", so we take on the responsibility, legal, payroll, etc., for the client's employees.

The health insurance costs have increased on the average of 30% or more every year. Even though we have a great risk management department, there are always a handful of people who throw the numbers. These people are typically over 40, suffer heart attacks, cancer, diabetes, etc., and then we have to somehow pay for it. I don't know exactly how it all works, but our insurance company passes the cost and a good portion of the risk on to my company.

So we get to see exactly WHY the costs are so out of whack. The consensus among our management is that the over forty crowd is damned expensive to insure and watch out for companies/clients that have an overabundance of older people or else we will be out of business eventually.

This sad state of affairs is partly caused by the US tradition of corporate paid health care. I'm no socialist...but...now that I've had a little exposure, I'm starting to think our healthcare system could use revamping to spread the risk so that there is less discrimination.

The subtleties of this discrimination, when multiplied by "large numbers", has the effect of eliminating the best people from continuing their livelihoods.

I'm deeply effected (affected?) by all this, because my significant other is a woman over 40. She has not had a full-time job since 2001. This is a vibrant, charismatic, positive, incredible person that I love dearly, so I experience vicariously the woe of people over 40 and I KNOW IN MY HEART something is wrong with the system if someone like her can't get a regular job.

 

This is depressing.

 

On the bright side, folks may become less materialistic.

 

Changes

I cannot believe were getting to the point where listing your college degree might be a liability. Case in point a friend of mine could not list his college degrees on a job application out of fear that they might say he is over qualified. He has told me of enormous occasions that during some job interviews an interviewer would say “I’m sorry you meet the education requirement but not the on the job experience.” HA! The job experience they are looking for is usually ten years. Now, how can he get the work experience if no one will hire him? Sure, there is the volunteer option but how many poor struggling college students can choose that option? The hiring practices going on now needs to be changed dramatically

 

What slump? Must be an American thing.