Thursday, October 29, 2009

The Unemployment Problem - Part 2

“I’m not really unemployed. The government stimulus package just hasn’t saved or created my job yet.”

The government’s response to unemployment was to pass a $787 billion stimulus package that was designed to save jobs --- mainly their own. It has probably “saved” more jobs than it has created so far by funneling money to important political constituencies in key political states. And what about the notion that the stimulus will eventually create jobs in 2010 and 2011? That offers little comfort to people who are going to run out of money in 2009.

Having “solved” the unemployment issue, the government has gone to work on reforming health care, tightening financial regulations and fighting global warming (cap-and-trade). But health insurance doesn’t help the hungry, financial regulations are meaningless to those draining their savings and people concerned about losing their homes are feeling the heat, but it has nothing to do with carbon emissions.

Some people even believe the debate about healthcare and cap-and-trade has actually hurt the creation of new jobs, since they impact business costs. Companies may delay hiring workers until they know what their new costs are.

It is easy to view the reporting of 15 million unemployed workers as just a statistic. But these numbers represent 15 million individuals, many with families which are going through pain, stress, and life challenges. Throw in a few million struggling underemployed people (characterized by the Jim Croce song “Working at the Car Wash Blues”) and you have a significant social malaise. This should be the government’s top priority, but for some reason it is not.

Personal Observations

My current situation gives me a unique perspective on what is happening in the job market. Consider me as an “embedded analyst” in the economic battle. The following are my “boots on the ground” observations:

1. The situation is pervasive. There are four couples in my wife’s immediate family. Three have been impacted by job losses and the fourth is dealing with a significant pay cut applied to a tight household budget.

2. The situation is unique. Many degreed, professionals with 20-30 years of continuous experience with one company have been downsized. This has led to the formation of and expansion of job seeker support groups throughout the country. A large group in the Cleveland, Ohio area is now drawing close to 300 unemployed people at their meetings and has recently maxed out the parking lot at the church where they meet.

3. It takes considerable more time to find a job. People that have jobs have a difficult time understanding just how tough things are. I have two friends, Kirk and Jerry (names changed to maintain some dignity). They are superior, high-quality, workers and outstanding individuals. Under any normal circumstances, they should never experience involuntary unemployment in their careers. They both have been job hunting for around a year. To see more examples go to: and .

4. The job market is improving. A friend just told me he has more leads than any time in the last six months. The bottom of the job market was probably in July or August, but don’t look for strong growth real soon. This is again consistent with the “UL” recovery curve I introduced two weeks ago.

Cue Jim Croce:

“Tried to find me an executive position
But no matter how smooth I talk
They wouldn't listen to the fact that I was a genius
The man said we got all that we can use
Now I got them steadily depressin', low-down, mind-messin'
workin' at the carwash blues”


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