No Plan Equals No Jobs

“Unemployment Rate Falls to 7.3% in August”. This was the headline in my local paper as well as how the August unemployment report was announced in various on-line and broadcast media.

While the statement is true, it appears to the uninformed and people not paying attention, to be a very positive report.  I mean, unemployment is now lower.  More jobs, more people working!

But consider what knowledge you need to have to understand this headline:

-         July unemployment was 7.4%, so the rate dropped a whole 0.1%. 

-         An unemployment rate of 7.3% in the fifth year of an economic recovery is very bad.

Therefore the headline is bad news, not good news.  And if you bother to actually the read the article, the news gets even worse. The small (for being in a “recovery”) number of jobs created just covered the number of young workers entering the workforce and the unemployment rate decreased because still more discouraged workers stopped looking because there are no jobs for them.  In reality: THE UNEMPLOYMENT RATE JUST WENT DOWN NOT BECAUSE THERE ARE MORE JOBS, BUT BECAUSE PEOPLE ARE GIVING UP LOOKING FOR JOBS THAT DO NOT EXIST.

I explained back in January that you can’t trust the unemployment statistics (The Unemployment Situation Is A Gooey Mess).  I wrote about how horrible the job market was then and unfortunately eight months later there has been very little progress.  Of course you will read reports that we are making “modest” improvement.  Whenever you see the word “modest” used to describe job or economic growth, just replace it with the word “pathetic”.  The job situation remains pathetic. 

John Crudele (New York Post) believes the job market is getting worse not better.   Calculated Risk is forecasting that it will take another 10 months to get to the same number of jobs that we had before the recession.  However we have had five years of population growth since the recession, so we will still be years away from having a normal unemployment rate.

If we can’t trust the macro statistics, let’s take a look at the micro level by looking what is happening with job seekers in Akron, Ohio.  The city has an unemployment rate lower than average (6.8% in July).  The city is benefiting from a diverse job base and promoting foreign investment.

Recently a Career Fair (notice it is not a Job Fair) was held and the advertising proclaimed over 30 organizations would attend.  First of all, it should not be necessary to have a job fair five years into an economic recovery.  One local fair advertised their fifth annual (now) fair back in February.  If you have to have a fifth one, the first four did not work!

At this Career Fair, once you eliminate:

-         The school and training firms (you need to see us because you have no chance to find a job right now!)

-         The telemarketing firms (our jobs are so bad we have very high turnover)

-         The employment agencies

-         The nursing homes

-         And the company that wants to hire you to sell cemetery plots to your friends

There are only four companies at the fair that offer decent jobs and one of these is a trucking company.  Over four years into this pathetic recovery and you still have this very lame “Career Fair”.  And people showed up over an hour before the doors open because of desperation.  It is very sad that people have to go through this.

How are the job seeker groups in the Akron area doing?  Once again the news is not good. One group just moved to a new location because they keep growing and ran out of space at the previous location.  This group peaked (the first time) in early 2010 and then decreased as the job market picked up mid-year.   However the numbers started growing again in late 2011 and have continued to climb. 

Another job group also had many people find jobs in 2010 and at one point looked like it might disband. However attendance picked up in 2011 and has held steady since then.  Some members are finding jobs but the leader of this group does not expect hiring in the area to increase soon.  There should not be job groups meeting in the fifth year of a recovery.  There should be enough jobs being created to make the groups unnecessary.

And from an individual level, my friend Alice is a very bright, competent, human resources/administrative person.  Under normal circumstances it should take her less than two months to find a good job.  But she has been looking for an extended time and like many others is grabbing on to temporary jobs to pay the bills.  You can see the pain in her eyes when she talks about her job search.  She feels that nobody cares about her situation.

And few people do care.  In the last election we had the choice between the “5-Step Plan” and the “Zero-Step Plan” and we choose the later.  The plan is “there is no plan”.  And now no plan is equal to no jobs.  The lack of focus, the lack of strategy and the lack of business acumen, has created a disaster of economic proportions.