Sunday, June 24, 2012

Finding Work . . . End of an Era

The definition of unemployment includes only jobless workers who report that they are actively seeking work, the unemployment rate overlooks those who are “underemployed”: jobless workers who want a job but have given up looking, and workers who have a job but cannot get the hours they want or need.

Unemployment has been above eight percent for more than three years, and 12.7 million workers remain unemployed today.

The unemployment rate for college graduates—19.1 percent . . . The jobless rate for high school graduates is near 54 percent.

17 percent of high school graduates had no job or were not enrolled in college in 2011, up from 13.7 in 2007.

The long-run wage trends for young graduates are bleak, with wages substantially lower today than they were in 2000.

For the Class of 2012, graduating in a bad economy has long-lasting economic consequences. For the next 10 to 15 years, earnings will be less than they would have had if they had graduated when job opportunities were plentiful.

For the 2011–12 school year, the total cost of attendance for an on-campus student—including in-state tuition, books, room and board, and transportation expenses at a four year public school averaged $21,447. For a four-year private school, it was $42,224. The cost of higher education has been rising faster than family incomes, making it harder for families to pay for college. A majority of students and graduates take on debt to pay for college who then can’t find employment, or find a job with enough salary to pay it back.

The cost of higher education has grown far more rapidly than median family income, leaving students with little choice but to take out loans, which, upon graduating into a labor market with limited job opportunities, they may not have the funds to repay.

In economic recessions as well as expansions, the unemployment rate for workers (those under age 25) is typically around twice as high as the overall unemployment rate.

The unemployment rate for young high school graduates is 31.1 percent; the underemployment rate of young high school graduates is 54 percent.

The Class of 2012 will be joining a significant backlog of unemployed college graduates from the Classes of 2009, 2010, and 2011 in an extremely difficult job market. There has been a dramatic deterioration in job prospects for college graduates since the start of the recession. The unemployment rate for college graduates jumped from 5.7 percent in 2007 to 10.4 percent in 2010.

Among high school graduates, the unemployment rate for racial and ethnic minorities’ particularly young black graduates—tends to be higher than that of whites, in good times and bad. But on the flip side, unemployment rate of young college graduates who are racial and ethnic minorities tends to be higher than that of young white college graduates.

The wages of high school and college graduates have fallen over the last decade. Between 2000 and 2011, the wages of young high school graduates dropped by 11.1 percent, while wages of college graduates dropped by 5.4 percent.

During economic downturns the numbers of workers quitting falls, as outside job opportunities become scarce. This results in lost opportunities for all workers, as they cannot move on to find a better fit to match their experience, leaving them unable to increase their salary to match their skill level.

Entering the labor market during a severe downturn leads to reduced earnings, greater earnings instability, and more unemployment over the next 10 to 15 years. One reason for a decline in earnings is due to the fact that workers entering the labor market in a downturn often settle for jobs at less-attractive employers or accept lower-level occupations than they otherwise would have.

It may not happen overnight, maybe not to where it was before the recession, but the job market will get better.   All in all, there are job opportunities available for the right candidate, but no matter how you slice it . . . the trend shows the unfortunate truth in that the less-skilled that will have a problem in finding work or will limit their expansion for job growth.

The days of walking into a business looking for work without any job skills or experience  and getting hired on the spot are the bygone days of another era.