College Degrees More Expensive, Worth Less in Job Market

In the December 9, 2009 article "College Degrees More Expensive, Worth Less in Job Market," Kristi Oloffson implies that an increase in the supply of workers with college degrees has lowered their market price.

Employers and career experts see a growing problem in American society - an abundance of college graduates, many burdened with tuition-loan debt, heading into the work world with a degree that doesn't mean much anymore.

The problem isn't just a soft job market - it's an oversupply of graduates. In 1973, a bachelor's degree was more of a rarity, since just 47% of high school graduates went on to college. By October 2008, that number had risen to nearly 70%. For many Americans today, a trip through college is considered as much of a birthright as a driver's license.

Marty Nemko, a career and education expert who has taught at U.C. Berkeley's Graduate School of Education, contends that the overflow in degree holders is the result of many weaker students attending colleges when other options may have served them better. "There is tremendous pressure to push kids through," he says, adding that as a result, too many students who aren't skilled become degree holders, promoting a perception among employers that higher education doesn't work. "That piece of paper no longer means very much, and employers know that," says Nemko. "Everybody's got it, so it's watered down."

What's not watered down is the tab. The cost of average tuition rose 6.5% this fall, and a report released on Dec. 1 by the Project on Student Debt showed that the IOU is getting bigger. Two-thirds of all students now leave college with outstanding loans; the average amount of debt rose to $23,200 in 2008. In the last academic year, the total amount loaned to students increased about 18% from the previous year, to $81 billion, according to the U.S. Department of Education.

Meanwhile, the unemployment rate for recent grads rose as well. It is now 10.6%, a record high.

The devaluation of a college degree is no secret on campus. An annual survey by the Higher Education Research Institute has long asked freshmen what they think their highest academic degree will be. In 1972, 38% of respondents said a bachelor's degree, but in 2008 only 22% answered the same. The number of freshmen planning to get a master's degree rose from 31% in 1972 to 42% in 2008. Says John Pryor, the institute's director: "Years ago, the bachelor's degree was the key to getting better jobs. Now you really need more than that."

Employers stress that a basic degree remains essential, carefully tiptoeing around the idea that its value has plummeted. But they admit that the degree alone is not the ace it once was; now they emphasize work experience as a way to make yourself stand out. Dan Black, director of campus recruiting in the Americas for Ernst & Young, and his team will hire more than 4,000 people this year out of 20,000 applicants. There are a lot of things besides a degree "that will help differentiate how much attention you get," says the veteran hirer, who has been screening graduates for 15 years.

Enterprise Rent-A-Car hiring guru Marie Artim, who says her company will hire 8,000 of 200,000 applicants worldwide, has found that her applicant pool is changing. "While 10 years ago we may have had the same numbers, today we have higher-quality and better-qualified applicants," she says.

So what does it take to impress recruiters today? Daniel Pink, an author on motivation in the workplace, agrees that the bachelor's degree "is necessary, but it's just not sufficient," at times doing little more than verifying "that you can more or less show up on time and stick with it." The author of A Whole New Mind: Why Right Brainers Will Rule the Future says companies want more. They're looking for people who can do jobs that can't be outsourced, he says, and graduates who "don't require a lot of hand-holding."

Left-brain abilities that used to guarantee jobs have become easy to automate, while right-brain abilities are harder to find - "design, seeing the big picture, connecting the dots," Pink says. He cites cognitive skills and self-direction as the types of things companies look for in job candidates. "People have to be able to do stuff that's hard to outsource," he says. "It used to be for blue collar; it's now for white collar too."

For now, graduates can steer their careers where job growth is strong - education, health care and nonprofit programs like Teach for America, says Trudy Steinfeld, a career counselor at New York University. "Every college degree is not cookie cutter. It's what you have done during that degree to distinguish yourself."

Pay cuts are becoming more common in labor markets.

In the October 14, 2009 New York Times article "Still on the Job, but Making Only Half as Much," Brad Stone reports that labor markets are increasingly experiencing pay cuts - something that is rare in more prosperous times:

In recent decades, layoffs were the standard procedure for shrinking labor costs. Reducing the wages of those who remained on the job was considered demoralizing and risky: the best workers would jump to another employer. But now pay cuts, sometimes the result of downgrades in rank or shortened workweeks, are occurring more frequently than at any time since the Great Depression.

State workers in Georgia are taking home smaller paychecks. So are the tens of thousands of employees in California's public university system. The steel company Nucor and the technology giant Hewlett-Packard have embraced the practice. So have several airlines and many small businesses.

The Bureau of Labor Statistics does not track pay cuts, but it suggests they are reflected in the steep decline of another statistic: total weekly pay for production workers, pilots among them, representing 80 percent of the work force. That index has fallen for nine consecutive months, an unprecedented string over the 44 years the bureau has calculated weekly pay, capturing the large number of people out of work, those working fewer hours and those whose wages have been cut. The old record was a two-month decline, during the 1981-1982 recession.

"What this means," said Thomas J. Nardone, an assistant commissioner at the bureau, "is that the amount of money people are paid has taken a big hit; not just those who have lost their jobs, but those who are still employed."

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Job Losses Rise, Dampening Hopes for a Quick Recovery

The October 2, 2009 PBS Newshour report "Job Losses Rise, Dampening Hopes for a Quick Recovery" suggests that the unemployment rate may not capture the full extent of the labor market difficulties:

Employers shed 263,000 jobs in September, more than analysts expected, bringing the jobless rate to 9.8 percent. Economics columnist David Leonhardt and labor expert Jacob Kirkegaard look at the numbers.

JIM LEHRER: The U.S. economy shed more jobs in September as the unemployment rate kept climbing. Margaret Warner has our lead story report.

MARGARET WARNER: The nation's unemployment rate rose to 9.8 percent in September, the highest in 26 years. Employers cut 263,000 jobs, tens of thousands more than economists had predicted.

In testimony today, the Labor Department's Keith Hall described how far the jobs picture has slid since the recession's onset in December '07.

KEITH HALL, commissioner, Bureau of Labor Statistics: A total of 15.1 million persons were unemployed in September, twice the number at the start of the recession. The number of long-term unemployed rose to 5.4 million in September; this group has grown more than fourfold since the start of the recession.

MARGARET WARNER: The official rate is only part of the picture. The so-called hidden unemployment rate, which includes those who've settled for part- time work or given up looking altogether, has hit 17 percent.

President Obama noted today that the economy isn't losing jobs as fast as it was a year ago.

U.S. PRESIDENT BARACK OBAMA: But today's job report is a sobering reminder that progress comes in fits and starts and that we're going to need to grind out this recovery step by step. Employment is often the last thing to come back after a recession. That's what history shows us. But our task is to do everything we can possibly do to accelerate that process. And I want to let every single American know that I will not let up until those who are seeking work can find work.

MARGARET WARNER: In Fredericksburg, Virginia, where unemployment is slightly below the national average, some businesses are adding jobs. Tony Kala manages a hotel.

TONY KALA, Courtyard by Marriott: We have about 50 employees that we hired. That includes full time and part time. That is everybody's -- all local people that were hired from here, so that's definitely 50 jobs.

MARGARET WARNER: But elsewhere in town, the recession is still taking a toll. Vonda Merrill is an event planner.

VONDA MERRILL, Elle Events: I've seen a lot of businesses going out of business, and it's sad to see. A lot of the places that are downtown, you'll see a lot of "for rent" and "for lease" signs because a lot of businesses are just closing down.

MARGARET WARNER: Jobs numbers weren't the only bad news this week. Amid fears of a drop in consumer spending, factory orders fell in August by the largest amount in five months.

For a closer look now at today's numbers and the trends they suggest, we turn to David Leonhardt, economics columnist at the New York Times, and Jacob Kirkegaard, a labor economist and a fellow at the Peterson Institute for International Economics.

Definitely not a rosy picture today. Jacob Kirkegaard, let me stat with you. What did today's numbers tell you, not just about the picture now, but about the prospects that we're going to see a jobs recovery any time soon?

"Universally bad" numbers

JACOB KIRKEGAARD, Peterson Institute for International Economics: Well, I think, unfortunately, today's numbers were universally bad. I mean, there wasn't a single positive number there, so the short answer is, it pushes any sustained recovery further into the future and the prospects that the private-sector job creation, et cetera, consumer spending is going to take over from official stimulus spending, you know, zero interest rates, have just been pushed further out.
MARGARET WARNER: How do you see it?

DAVID LEONHARDT, New York Times: Yes, it's not a good report. I mean, what we were hoping coming into this report is that we were going to just see more progress every month and that maybe we were still a ways away from getting actual job growth, but that things would be getting better month after month.

And in terms of hours worked, in terms of job losses, we saw deterioration this past month. And so it does push further into the future the point at which anything might actually feel healthy.

MARGARET WARNER: In the jobs picture, because this was worse than August, not better?

DAVID LEONHARDT: That's right. And what's important to remember is, even if this had been better, we would still be a long ways away. I mean, we are still...

MARGARET WARNER: It would still be bleeding jobs at a pretty steady rate.

DAVID LEONHARDT: That's exactly right. Everyone expects we still have months more to go of job losses. And the unemployment rate will rise for months. And so the question is, how bad is it during that time? And how far off is the point at which jobs start growing again?

And each of the last few reports has basically giving us reason to wonder, well, maybe it's not going to go on as long as we had thought. And today was one step back.

MARGARET WARNER: The president today spoke of the historical relationship between economic growth and jobs growth and that they move -- one lags behind the other, but there's a pattern. Is it too soon to say or can you now say that, in fact, the jobs picture is lagging further behind the economic growth figures than usually, than historically? And if so, what does that tell you? What does that mean?

JACOB KIRKEGAARD: Oh, yes, I think we are now at a point where we can say, you know, what we economists like to say the Okun's law relationship, which is the relationship between how the unemployment rate moves and how the real GDP growth rates move has, in fact -- are now back to a scenario that we only saw in the mid-'70s. And what it suggests is, again, as David also said, I mean, we are moving to a -- being pushed further into the future.

But I just want to point out one other thing which I think is slightly understated, which is that not only are we still losing jobs, but we keep losing human capital, as well, because that's really what the long-term unemployment rate is. That's really skills depreciating. It's people not being able to follow through, you know, the new technologies, the new standard operating procedures in their jobs that they previously held.

MARGARET WARNER: You mean, meaning that -- the old maxim you think is true, that the longer you're unemployed, the harder it is to find work?

JACOB KIRKEGAARD: Absolutely. I mean, the real risk here is that the United States is entering this kind of vicious circle that, you know, quite frankly, some European countries saw in the early 1980s. And that's a very, very bleak diagnosis.

Double-digit unemployment

MARGARET WARNER: Time magazine had a cover story early in September in which it -- well, it raised it as a question, but was opining that we're entering some kind of new era of near-double-digit unemployment. I think it was, "Is double-digit unemployment here to stay?" Do you think we might be?
DAVID LEONHARDT: No. I mean, we might be, right? We don't want to be definite about the economy. But I think the idea that we're headed into some sort of long-term period with unemployment above 10 percent is fairly unlikely.

There are all kinds of bad dynamics right now, right? People lose their jobs; they spend less; and then more people lose their jobs. But that's true in every recession, right? It's always true. And yet we've always gotten out of previous recessions.

So our expectation should be that we're going to get out of this recession. And, in fact, we have a fair amount of stimulus money still coming down the pike in coming months. The natural ability of the economy to snap back should come into play here, as well.

So I'm not optimistic, but I don't think we're entering some sort of new era of double-digit unemployment.

MARGARET WARNER: So you don't think there's something structurally wrong?

DAVID LEONHARDT: Well, it depends what you mean by structurally. I don't think that we're going to end up stuck with 10 percent unemployment for some long period of time. I mean, it could be months, and that will feel very unpleasant, but I don't think that's the case.

I do worry about how quickly we're going to grow in the future. I mean, even during the expansion that we just had, from 2001 to 2007, economic growth was really mediocre and really disappointing. And so I don't think that we're necessarily going to come out of this into some sort of wonderful economic period. But I think the prospect of a long-term double-digit unemployment is by far one of the less likely scenarios here.

MARGARET WARNER: And how do you see that?

JACOB KIRKEGAARD: Well, I think, unfortunately -- and I'm probably going to take a slightly gloomier look than David, because I think we are seeing some very major structural issues at play here, because part of the story that we're seeing is this continuing shedding of jobs in the manufacturing sector.

I mean, you know, bad as that is, it's not a new story. And the general trend of the U.S. labor market has been this shift towards services sector employment. But the problem is that that story is really starting to fray a little, you know, at the edges, because we are starting to see very significant job losses also in the traditional kind of high-value-added, high-skilled services sector jobs that we basically thought was going to power the economy going forward.

So you could argue that, well, actually if this happens in the financial sector, well, maybe some people might not think that's a bad idea. But the question remains is, it's just not a clear move into the service sector anymore.

Building a 21st century economy

MARGARET WARNER: The president said today that -- he said, basically -- talked about building a 21st century economy where people can get the skills and education they need to compete for the jobs of the future won't happen overnight. He seemed to be suggesting that the mix of jobs and businesses and industries we have now isn't enough for robust growth. Do you think that's what he was suggesting? And do you think that's correct?

DAVID LEONHARDT: He's talked about this idea of building a new foundation that we want, an economy that isn't reliant on bubbles, and we do want that. And the problem is that takes a while.

It probably comes down more than anything to the skills of the workforce. And we have been having a real slowdown in the growth of the educational attainment of this population. And that's really bad.

And so we can't snap our fingers and overnight get to a more skilled, more educated population. And businesses can't snap their fingers and make the investments that are needed for long-term growth.

So the one reason to have some hope is that the really good things in the economy you often don't see coming. If we were sitting here in 1992 or 1993 talking about that jobless recovery, none of us would have been saying, "You know what? In a few years, we're going to have this great thing called the Internet."

And I'm not saying we're going have something new like that. I don't know. But I do think that, if we were going to have it, we wouldn't necessarily know that we would now.

MARGARET WARNER: Very briefly, do you think it will take some new, new thing?

JACOB KIRKEGAARD: Yes, absolutely. I mean, no matter what we do -- I mean, and personally I don't think it will be green jobs, because I think that story, unfortunately, has been quite overblown, as well.

MARGARET WARNER: Well, gloomy and gloomier. Jacob Kirkegaard, David Leonhardt, thank you.

JIM LEHRER: You can read what our economics correspondent Paul Solman thinks about today's numbers on our Web site, newshour.pbs.org. And on "NewsHour Extra," there's a lesson plan for teachers about the undercounted unemployed.

Why the September Jobs Report Is So Brutal

In the October 2, 2009 U.S. News & World Report article "Why the September Jobs Report Is So Brutal," Liz Wolgemuth reports:

Employers in the United States continue to be more interested in cutting their payrolls than in keeping their existing employees, let alone adding new ones. Employers slashed another 263,000 jobs last month, the Labor Department reported today. That brings nonfarm employment down to the level of 2004, when there were about 7 million fewer U.S. workers.

Workers are dropping out: The unemployment rate edged up only slightly, to 9.8 percent, but the number of workers in the labor force fell by 571,000, suggesting the unemployment rate could have been much worse. The ranks of the marginally attached--workers who have dropped out of the workforce because they believe they won't find jobs or because they have other responsibilities, such as school--have grown by 615,000 over the year.

There are not enough jobs: A bill that would provide another 13 weeks of federally funded unemployment benefits to hard-hit states sailed through the House last week but may be complicated by some senators' efforts to get benefit extensions for all states. In some states, eligible workers have already received as many as 79 weeks of benefits. Historically, spells of unemployment that lasted a year or more were very rare, says Harvard economist Lawrence Katz, a Harvard economist. These trends are the sorts that haven't been seen since the Great Depression.

Indeed, the number of workers who have been unemployed for 27 weeks or more--called "long-term unemployed"--rose by 450,000, to 5.4 million. Last month, 36 percent of the unemployed had been out of work for at least six months. The unemployed face a market in which job seekers outnumber job openings by a ratio of 6 to 1.

Governments are now feeling the heat: While most other industries slashed jobs throughout the recession, the government sector held up pretty well, helping cushion capital cities from the roughest economic patches. Last month, however, strains on local governments started to show. Government employment fell by 53,000, with the largest drop--24,000 jobs--in the noneducation component of local governments.

Progress has slowed: September job losses were much worse than most economists expected--the median estimate was a loss of 175,000. The government also revised the prior data to show 201,000 jobs were lost in August, rather than the 216,000 originally reported, meaning the trend of narrowing job losses really shifted last month. "Today's report suggests that the progress toward a recovery in labor market conditions has stalled," Ted Weiseman and David Greenlaw, economists at Morgan Stanley, said in a morning note. "We continue to expect to see some eventual follow through on the hiring side, given the recent improvement in production and demand, but the September data reinforce the fact that some important headwinds remain."

Hours fell back down: Along with payroll cuts, many employers have slashed their workers' hours to help lower expenses, and there are now 9.2 million "involuntary" part-time workers (those who would prefer full-time work). The average workweek edged up in August, but September erased the gain, and the workweek is again at a record low 33.0 hours.

Construction and manufacturing are still hurting: Since the start of the recession, 1.5 million jobs have been erased in the construction industry. Employers in construction slashed 64,000 jobs last month, which, at least, was fewer than they were cutting late last year and earlier this year. The pain was greatest in nonresidential components, where 39,000 jobs were cut. Manufacturing lost 51,000 jobs. That's also fewer than were being cut earlier in the recession, but manufacturing payrolls have shrunk by 2.1 million since the start of the downturn.

The future is unclear: One of the most difficult things to understand about September's jobs report is how far the job market reality was from the government's stimulus forecast. The White House estimated that with the stimulus, the unemployment rate would peak at 8 percent. Without a clear plan to stimulate future job growth, it's unclear how long it will take for the 15.1 million unemployed to gain re-employment in any significant volume. Employers tend to shy away from the risk of new hires until they are confident of the state of the economy. Even for the long-term unemployed, "when the economy is chugging along, firms are willing to take a chance" on hiring and training, says Katz.

Still, the market is improving, as job losses are much less than they were last winter. "What is still very much open to question is how fast the move will be to stabilization of payrolls and eventually to job growth," says Joshua Shapiro, chief U.S. economist at MFR. "We continue to believe that the process will be a slow one and that households will be contending with weak income growth and balance sheet issues for some time."

Why the August Jobs Report Is No Labor Day Present

In the September 4, 2009 U.S. News & World Report article "Why the August Jobs Report Is No Labor Day Present," Liz Wolgemuth analyses the data from the August labor market report:

Last month, U.S. employers slashed 216,000 jobs from their payrolls, their smallest cut since August 2008, the Labor Department reported today. The job number was largely in line with economists expectations. But it wasn't all good news. Indeed, this Labor Day, nearly 10 percent of the nation's workers will be unemployed and searching for work. The unemployment rate shot to 9.7 percent, its highest level since June 1983. The unemployment rate is measured through a household survey, a different survey than is used to measure the monthly jobs number. The household survey showed the labor force increased by 73,000 workers last month, and employment dropped by 392,000.

What happened to teens this summer? Jobs were far more scarce than usual for teenagers this summer, and with fewer openings, they faced much more competition than in a typical summer. The teen unemployment rate rose to a record high of 25.5 percent in August, up from 23.8 percent in July. The unemployment rate could very well fall in the next few months, thanks to the normal seasonal decline, economists David Greenlaw and Ted Wieseman of Morgan Stanley Research said in a morning note.

Who else is hurt most by this job market? Men are clearly in worse shape than women. The unemployment rate for adult men is 10.1 percent, compared with 7.6 percent for adult women. The unemployment rate for Hispanic or Latino workers rose 0.7 percentage point to 13 percent, compared with a 0.3 percentage point rise to 8.9 percent for white workers. Black unemployment increased 0.6 percent to 15.1 percent, compared with an unemployment rate of 8.4 percent before the start of the recession.

Job seekers continue to face long job searches. The number of people who have been unemployed for 27 weeks or more continued to grow by a small margin and now totals close to 5 million. That, along with the jump in the unemployment rate, will likely put additional pressure on Congress to extend federally funded unemployment benefits again, despite the fact that many states already have as many as 79 weeks of benefits.

When will we see some job growth? One positive sign of things to come: Job losses in temp services have slowed "markedly" in the past four months, the Labor Department says. Temp jobs can be a useful indicator for the future trends in overall hiring. Economists still, by and large, expect unemployment to peak around 10 percent--and not until sometime next year, probably early in the year.

Which industries are doing worse/better? Despite the success of the "cash for clunkers" program, employment in motor vehicles and parts manufacturing fell 15,000 last month. Jobs in the sector had increased 31,000 in July. Construction has lost 1.4 million jobs since the start of the recession, although monthly job losses have moderated from their previous levels. Losses have moved from the residential construction industry to the nonresidential and heavy construction industries.

On the other hand, education and health services added a healthy 52,000 jobs in August. Retail job losses slowed--employers cut 10,000 jobs.

What are the experts saying?

"Today's report--together with other indications of a moderation in the pace of layoffs--is consistent with the notion that the labor market is progressing toward recovery. We expect to see payroll growth by the end of this year. However, as mentioned earlier, the unemployment rate probably won't peak until early next year. In fact, if the participation rate begins to flatten out (as seems likely), employment will need to rise 125,000 or so per month merely in order to maintain a steady unemployment rate." --Ted Greenlaw and Ted Wieseman, Morgan Stanley Research

"The August report continues a string of official results which are better than suggested by other labor market data (initial claims, the ADP survey, withholding tax receipts, etc.). Nonetheless, whether or not today's and other recent reports overstate the case, the improving trend of the labor market after the autumn/winter carnage cannot be denied. What is still very much open to question is how fast the move will be to stabilization of payrolls and eventually to job growth. We continue to believe that the process will be a slow one, and that households will be contending with weak income growth and balance sheet issues for some time." --Joshua Shapiro, chief U.S. economist at MFR

For the jobless, Labor Day is hardly a holiday

In the September 6, 2009 article "For the jobless, Labor Day is hardly a holiday," Associated Press economics writer Jeannine Aversa discusses the psychological challenges of being unemployed. The article highlights that official labor market statistics only count people actively looking for a job as unemployed. When jobseekers become discouraged by the slim prospects of finding a job and stop looking for one, they are no longer considered unemployed and are not included in the unemployment rate. Labor market data may underestimate the true level of unemployment in the economy:

WASHINGTON – Every day it's a battle. The nearly 15 million unemployed Americans won't enjoy Labor Day as a relaxing respite from work. Instead, they'll once again need to prepare to get up, hit the pavement and keep hunting for a job.

As the jobless rate nears 10 percent, even those fortunate enough to be employed fret about keeping their jobs. But for those without them, it's a daily struggle with emotional and economic distress.

"It's hard to maintain your focus that you're a valuable member of society when you go three months and nobody really wants to employ you," says David O'Bryan, 59, of Barre, Vt.

To cope with the stress, O'Bryan jots down his thoughts in a journal he carries around. He's seeking a new career in the education field. In one recent entry, he wrote:

"I'm finding the process of trying to get into schools both tedious and frustrating. I wish I could have some concrete feedback on why I'm not being hired. Overweight? No para-educator certificate in effect? No confidence in my ability to perform the job?"

The economy is showing signs of being on the mend. Yet that's hardly reassuring to the unemployed this Labor Day weekend. The job market is in lousy shape and will stay that way for a while.

The nation's jobless rate jumped to a 26-year high of 9.7 percent in August from 9.4 percent in July. It's expected to top 10 percent this year and keep climbing into part of next year before falling back. The post-World War II high was 10.8 percent at the end of 1982.

And it could take four years or more for the unemployment rate to fall back down to a normal level of about 5 percent.

Gregory Przybylski, 46, of suburban Milwaukee has grown increasingly anxious since losing his job as a machine operator in March 2008.

"It's getting scary," said Przybylski, a bachelor who has spent the past several months studying for a high school equivalency degree. "I'm just hoping to be working by Christmas."

Przybylski said he's using his time to study and improve himself so he'll be ready once the economy turns around. But he fears being thrust into a new career after spending so many years as a machinist.

"I've been doing this since 1980 — that's what I know," he said, slowly shaking his head.

"It's stressful whether you have a job or not," says Patricia Drentea, associate professor of sociology at the University of Alabama at Birmingham. "If you are out of a job, it can be demoralizing to know that the tide has not yet turned. For those still in jobs, there is the constant worry that there is going to be more layoffs."

The worst recession since World War II has claimed a net total of 6.9 million jobs — and more losses are expected, casting a pall over this year's Labor Day.

The strains of rising unemployment are making people — those with jobs and those without — more frugal. And they're likely to remain cautious spenders in coming months, crimping the budding economic recovery.

Ethan Fierro of Chicago has managed to survive a round of layoffs at his accounting firm. But he's not taking his job for granted and is clamping down on the household budget, and cutting out the little extras.

"Now, movie nights have to be Netflix nights," says Fierro, 33, who has a wife and a 1-year-old son.

Chrysantheum Dickens, 43, of Tampa, a church pastor who also works in sales at an information technology company, shops at a Salvation Army store for school clothes for her sons.

"It's a different age now, and you never know what's going to happen," she says.

Jobseeker Ileen Goldberg of Tampa stopped scheduling doctor's appointments and sold her car to save money and help make ends meet.

"It's horrible out there," says Goldberg, 48, who lost her job as an administrative assistant in June. "I have no prospects, so every day it's a mental battle when you get up."

Laid off eight months ago from her secretarial job at a health clinic, Mary Pat Didier, 60, is preparing her five grandchildren for the possibility she might have to move away from her home in Rockford, Ill., in hopes of finding employment.

Didier has begun applying for jobs in Chicago and in Milwaukee. So far, no luck. Her unemployment benefits are set to expire in January, but she hopes to qualify for extended aid. She's burned through her retirement savings.

"There's no place to go from here," Didier said. "I'm too young for Medicare, but I ended up with no health (insurance). I get frustrated, but I can't give up, so I try to not to dwell in it," she adds. "I finally know what it's like to live in the moment."

An Associated Press-GfK poll last month found that 43 percent of Americans were worried "some" or "a lot" about losing their job, even though the pace of layoffs has slowed. And statistically, that wasn't much changed from the results in February, when job losses were much heavier.

A growing number of people have grown so frustrated that they've stopped looking for work. The number of such "discouraged workers" totaled 758,000 in August — nearly twice as many as a year ago. Because they've abandoned their job searches, they aren't included in the government's count of the 14.9 million people who are unemployed.

If discouraged workers and people who have settled for part-time work are included, the unemployment rate would have been 16.8 percent in August, the highest on records dating to 1994.

"Right now, there are six people unemployed for each job opening," says economist Lawrence Mishel of the Economic Policy Institute. "If you are not successful in finding work, you are in a cruel game of musical chairs with six people circling around one chair."

Earlier this week, Federal Reserve officials said they expected the pace of the recovery to pick up in 2010, but the likely strength of the upturn is uncertain because of concerns about how much consumers will borrow and spend.

A "poor" job market, evaporated wealth from home and stock values, hard-to-get credit and wages that aren't likely to rise much anytime soon mean Americans face "considerable headwinds," Fed officials said. How consumers behave is crucial to the recovery because their spending accounts for roughly 70 percent of economic activity.

Labor Secretary Hilda Solis' advice to the unemployed: "I would tell those workers and families not to lose sight of hope." She urges them to seek the skills, education and training needed for new jobs. But she acknowledges these are tough times.

"Americans are facing monumental challenges," she says. "I know that every job lost, every hour cut from the workweek, means another family having to make difficult decisions."

Work Force Radically Changed Since Last Year

In the September 3, 2009 article "Work Force Radically Changed Since Last Year," Associated Press business writer Christopher Leonard reports:

Labor Market Has Suffered Most Wrenching Changes In A Generation

When Labor Day arrives Monday, it will be celebrated by a work force that has changed radically since the same holiday in 2008.

Over the past year, the labor market has suffered its most wrenching changes in a generation, shedding millions of jobs and changing the profile of the more than 131 million people who head to work every day.

American workers are older than they used to be, working fewer hours at cash-strapped companies and less likely to be unionized. And far more are now out looking for a job, and spending longer periods of time on the job hunt.

The rapid change has come on top of longer-term transformations. In 1959, nearly 30 percent of all nonfarm workers had manufacturing jobs -- by last month, that had fallen to 9 percent. Eighty years ago, about 20 percent of Americans worked on farms. Now it's less than 2 percent.

As Americans left behind farms and factories, they donned the service-sector attire of aprons, neckties and telephone headsets, with about 36 percent of the work force now employed in the service sector.

While changes have been obvious, it's less clear what will be around the corner for U.S. workers. Analysts expect a long period of joblessness to continue, with the unemployment rate not returning to pre-recession levels until 2013 or later.

The big question is what kind of jobs will appear to replace those lost forever in the hard-hit financial services and construction sectors.

Here's a look at the changing U.S. labor force, by the numbers.
___
A HORRIBLE YEAR
4 percent: The total decline over the last year in the U.S. nonfarm payroll, which stands at 131.5 million people.
9.4 percent: The current unemployment rate, up from 4.7 percent when the recession began.
33.1 hours: The length of the average workweek as employers cut hours, near a the lowest level in records dating to 1964.
6.7 million: The number of jobs lost since the recession started in December 2007.
___
A DAY IN THE LIFE
2.8 percent: The share of people who are at work by 5 a.m.
7.6 hours: The length of the average workday.
20 percent: Share of employees who do all or some of their work at home.
48.6 minutes: The average daily travel time for commuters and traveling workers.
76 percent: Percentage of workers who drive alone to work.
___
CHANGING JOB MARKET
18 percent: The total decline over the last year in construction jobs, which fell to 6.1 million.
4.67 percent: Share of the U.S. labor market held by construction workers last year, down from 5.4 percent as the housing bust intensified last summer.
7.7 million: Number of workers with more than one job, about 5 percent of the work force.
6 percent: Decline in the number of workers in the financial sector over the last year, with 7.7 million remaining as of July.
587,000: Number of registered nursing positions expected to be created between 2006 and 2016.
___
CHANGING WORK FORCE
40 percent: The share of workers over age 55 who have a job or are seeking a job, the highest level since it was 40.8 percent in 1961, according to a recent Pew Research Center survey.
57 percent: The share of workers between age 16 and 24 who are in the labor market, down from 66 percent in 2000. Many are waiting out the downturn by going to school.
16 million: The number of wage and salaried workers who are unionized, down from 16.3 million in 2000.
____
PAY DAY
4.28 percent: Percentage of work force in management jobs.
0.19 percent: Percentage of workers who are chief executives.
$136,890: Mean annual wage of chief executives.
$52,290: Mean annual wage of elementary school teachers.
$72,870: Mean annual wage of industrial engineers.
$102,390: Mean annual wage of dentists.
$46,920: Mean annual wage of all occupations.
___
Sources: U.S. Bureau of Labor Statistics and U.S. Census Bureau, unless otherwise noted.

Best & Worst Markets for Job Seekers

In his August 18, 2009 Orlando Sentinel blog entry "Site ranks Orlando as one of the worst markets for job seekers" Etan Horowitz reports:

A new study from Indeed.com, a site that aggregates job listings from around the Web, lists Orlando as one of the worst markets to be unemployed and looking for a job these days.

The study compared the number of unemployed people to the number of job postings in each of the 50 top metropolitan areas during June. The more job postings there are per unemployed person, the better the market is for job seekers.

In Orlando, for every one job posting, there are six unemployed people, landing Orlando as No. 42 on the list. With the exception of Jacksonville, which came in at No. 2 with a ratio of three jobs for every unemployed person, most of the Florida cities ranked near the bottom.

Florida markets

Jacksonville - Ranked #2 - 3 jobs to every 1 unemployed persons
Tampa: Ranked #36 - 1 job to every 5 unemployed persons
Orlando: Ranked #42: 1 job to every 6 unemployed persons
Miami: Ranked #49: 1 job to every 10 unemployed persons

The top ten best cities for finding jobs (and the ratios of job postings to unemployed):

1. Washington, DC (6:1)
2. Jacksonville, FL (3:1)
3. Baltimore, MD (1:1)
4. Salt Lake City, UT (1:2)
5. New York, NY (1:2)
6. San Jose, CA (1:2)
7. Hartford, CT (1:2)
8. Oklahoma City, OK (1:3)
9. Austin, TX (1:3)
10. Boston, MA (1:3)

The worst ten cities for job searches:

41. Buffalo, NY (1:6)
42. Orlando, FL (1:6)
43. Sacramento, CA (1:6)
44. Rochester, NY (1:6)
45. Chicago, IL (1:7)
46. Portland, OR (1:7)
47. Los Angeles, CA (1:8)
48. Riverside, CA (1:9)
49. Miami, FL (1:10)
50. Detroit, MI (1:18)

Most Lucrative College Degrees

The July 24, 2009 CNN Money article "Most Lucrative College Degrees" by Julianne Pepitone demonstrates how supply and demand influence prices. Because the number of students majoring in math and science is relatively small (and thus the supply of those workers is relatively small), they tend to earn higher incomes than students majoring in humanities and social sciences (where the supply of workers is relatively large).

Hint: Grab a pencil, calculator, protractor ... or a drill. Engineering majors snag most of the top spots.

Math majors don't always get much respect on college campuses, but fat post-grad wallets should be enough to give them a boost.

The top 15 highest-earning college degrees all have one thing in common -- math skills. That's according to a recent survey from the National Association of Colleges and Employers, which tracks college graduates' job offers.

"Math is at the crux of who gets paid," said Ed Koc, director of research at NACE. "If you have those skills, you are an extremely valuable asset. We don't generate enough people like that in this country."

This year Rochester Institute of Technology hosted recruiters from defense-industry firms like Lockheed Martin (LMT, Fortune 500) and Northrop Grumman (NOC, Fortune 500), as well as other big companies like Microsoft (MSFT, Fortune 500) and Johnson & Johnson (JNJ, Fortune 500).

"The tech fields are what's driving salaries and offers, and the top students are faring quite well," said Emanuel Contomanolis, who runs RIT's career center.

Specifically, engineering diplomas account for 12 of the 15 the top-paying majors. NACE collects its data by surveying 200 college career centers.

Energy is the key. Petroleum engineering was by far highest-paying degree, with an average starting offer of $83,121, thanks to that resource's growing scarcity. Graduates with these degrees generally find work locating oil and gas reservoirs, or in developing ways to bring those resources to the Earth's surface.

"Exploration for new energy sources is high," Koc said. "The oil and gas industry has done relatively well the past year, even though oil prices are off right now."

Other highly-paid engineering majors include chemical engineers, who employ their skills to make everything from plastics to fuel cells and have an average starting offer of $64,902.

Mining engineers start at $64,404 on average, while computer engineers, who have an expertise in both coding and electrical engineering, pocket roughly $61,738 their first year out of school.

Left behind. Of course, not every student with an engineering degree will score a fat paycheck. RIT's Contomanolis noted that "average" graduates are feeling the pinch of fewer job offers. Still, in a tough job market, graduates with technology degrees have an advantage.

"It's a tech-driven world, and demand [for engineers] is only going to grow," said Farnoosh Torabi, employment expert and Quicken blog editor. "You can't say that about many fields, especially in a recession."

Perhaps that's why more and more college students are picking their majors based on a field's earning power, ultimately "choosing a major that pays," Torabi said.

Top non-engineering fields. Only three of the 15 top paying degrees were outside the field of engineering -- but they each still require math skills.

For computer science majors, who specialize in programming and software, the average salary was $61,407. Graduates with degrees in actuarial science took home about $56,320; and jobs for students in construction management paid about $53,199. Each of these fields has paid well throughout the years, Koc said.

What happened to well-rounded? There are far fewer people graduating with math-based majors, compared to their liberal-arts counterparts, which is why they are paid at such a premium. The fields of engineering and computer science each make up about 4% of all college graduates, while social science and history each comprise 16%, Koc noted.

As a result, salaries for graduates who studied fields like social work command tiny paychecks, somewhere in the vicinity of $29,000. English, foreign language and communications majors make about $35,000, Koc said.

"It's a supply and demand issue," he added. "So few grads offer math skills, and those who can are rewarded."

The Hidden Unemployment Rate

The June 4, 2009 Associated Press story "Part-timers form a hidden unemployment rate" highlights how the unemployment rate may underestimate problems in labor markets:

TOWNSHEND, Vt. - When the monthly unemployment figures come out Friday, Greg Noel will go from collecting government statistics to becoming one. Again.

Noel, 60, was among more than 60,000 Americans hired in April to help with the 2010 Census. But he's out of work once more and moving back on the unemployment rolls because his temporary gig is finished.

It's a familiar predicament in today's economy, in which some 2 million people searching for full-time work have had to settle for less, and unemployment is much higher than the official rate when all the Americans who gave up looking for jobs are counted, too.

For the past month, Noel and more than 140,000 Census workers fanned out to create a map of every housing unit in the country, part of what will be the largest peacetime mobilization of civilian workers.

He roamed the spine of the Green Mountains with a handheld GPS unit for several weeks, wandering down dirt roads and chatting with people whose livelihoods are also uncertain. Work was good: The sun was out, the snow was gone and the blackflies hadn't begun to hatch.

Because of the surge of Census hiring, April unemployment only rose to 8.9 percent - a much slower increase than had been feared. But the latest unemployment figures aren't likely to get similar help. Thousands like Noel who were among one of the largest segments of the work force - people who have taken part-time jobs because they can't find full-time work - have returned simply to being unemployed.

Consider the numbers:

• The 8.9 percent April unemployment rate was based on 13.7 million Americans out of work. But that number doesn't include discouraged workers, or people who gave up looking for work after four weeks. Add those 700,000 people, and the unemployment rate would be 9.3 percent.

• The official rate also doesn't include "marginally-attached workers," or people who have looked for work in the past year but stopped searching in the past month because of barriers to employment such as child care, poor health or lack of transportation. Add those 1.4 million people, and the unemployment rate would be 10.1 percent.

• The official rate also doesn't include "involuntary part-time workers," or the 2 million people like Noel who took a part-time job because that's all they could get, plus those whose work hours dropped below the full-time level. Once those 9 million workers are added to the unemployment mix, the rate would be 15.8 percent.

All told, nearly 25 million Americans were either unemployed, underemployed, or had given up looking for a job in April.

The ranks of involuntary part-timers has increased by 4.9 million in the past year, according to a May study by the Federal Reserve Bank of Cleveland. Many economists now predict unemployment won't peak until 2010. And since employers generally increase the hours of existing workers before hiring new ones, workers could be looking for full-time jobs for some time.

"You haven't seen job loss numbers like this before," said Heather Boushey, a senior economist at the Center for American Progress in Washington. "It's been such a sharp dip down that you'll see a lot of employers taking on temporary and part-time workers before they add employees."

For tens of thousands of people like Noel, a part-time job isn't their dream position, but it beats the alternative. A Pennsylvania native and veteran of the Silicon Valley boom-and-bust cycle, Noel settled in southern Vermont in 2003. He's worked a series of jobs, commuting to his latest position as an auditor for a family-owned food and beverage distributor in Brattleboro before being laid off in early spring.

Vermont is in better shape than most states - but not by much. Real estate and tourism, pillars of the state's economy over the past decade, are staggering.

Many parents who were frantic last year about sons and daughters serving in Iraq and Afghanistan - the state has sent a disproportionate share of its young people overseas - now are relieved their children have a steady job with benefits. Financial jobs are few. "The economy?" Noel asks between bites of a bison burger in a tiny diner. "You just don't know if it's ever going to come back. We may never have it so good again."

When the Census Bureau offered him a part-time job mapping houses nearly an hour from his Windham home, Noel jumped at it. The money, between $10 and $25 per hour plus 55 cents per mile, was a big factor. But Noel said he also wanted to be part of a larger community effort, and the 2010 Census is nothing if not a large community effort.

When the first numbers are released in December 2010, the Census Bureau will have spent more than $11 billion and hired about 1.2 million temporary employees. The government conducts its Census every decade to determine the number of congressional seats assigned to each state, but the figures collected also help the government decide where to spend billions of dollars for the poor and disabled, where to build new schools and prisons, and how state legislative boundaries should be designed.

It hasn't been the perfect job - that would be a full-time position with benefits - but Noel says the Census job worked out well. It eased the pain of being unemployed, giving him something to do, and made him realize his entire life doesn't have to be about financial management.

"It's just statistics," said Noel, "but it's important."

But last week, he was unemployed again, a victim of the Census Bureau's efficiency. Since the government was able to draw from a well-qualified but mostly out-of-work pool of applicants, the work done by more than 140,000 field employees went far more quickly than expected.

"We've always done well, but this time around was amazing," said Stephen L. Buckner, a Census Bureau spokesman. "It's a tough economic time."

For some temporary workers, the outlook is brighter. Ian Gunn spent five weeks "being paid to hike. It was great." Gunn, an 18-year-old high school senior heading to Renssalaer Polytechnic Institute next year to study computer science, hopes for a better economy when he graduates, one that offers more security than a series of part-time jobs.

"It's going to take time," he said, "but I've got four more years."

Noel, though, is uncertain about the future. It's possible he'll be called back to work later in the fall for the final push. The Census Bureau expects to send roughly 1.2 million workers out to count people who don't return their questionnaires; the hiring will push down unemployment numbers for several months during that period.

For now, Noel says, he and his wife are living without frills. He looks for another job and she runs Green Mountain Chef, a catering business near Stratton Mountain. Demand has slowed dramatically since the economic meltdown began, as it has for most tourism-dependent businesses in Vermont.

Noel hopes to avoid being a statistic for too long. Unemployment insurance will give him about $425 per week - enough to pay the mortgage, and maybe the health insurance bill. Right now, the couple pays about $280 per month, but that will climb to $850 in September, when his government-subsidized COBRA policy expires.

"I hope something comes up," he says. "But there's not an awful lot out there."

Using Supply & Demand Analysis to Explain Unemployment

Using Supply & Demand Analysis to Explain Unemployment

In markets for labor, the price of labor is often referred to as the wage rate. Households typically supply labor to businesses. The supply of labor is upward sloping, which implies that as the wage rate increases, households are willing to supply a larger quantity of labor. Businesses typically demand labor from households. The demand for labor is downward sloping, which implies that as the wage rate increases, business demand a smaller quantity of labor. This means fewer jobs are available for workers.

The equilibrium wage rate is the price of labor at which the quantity of labor supplied equals the quantity of labor demanded. The market wage rate is the price of labor paid in a labor market. It may or may not be the same as the equilibrium wage rate. If the market wage rate is above the equilibrium wage rate, the quantity of labor supplied is larger than the quantity of labor demanded. When this occurs, there is a surplus of labor. This is also called unemployment. Thus, unemployment occurs when the market wage rate is above the equilibrium wage rate.


Market for Labor


unemployment
(excess supply
of labor)



Supply of Labor
Quantity
of Labor


Equilibrium wage
rate
Demand for Labor

Market wage rate
Price of Labor (wage rate)





O


QS
QDwhere:
QS = the quantity of labor supplied at the market wage rate
(i.e., the number of workers who want a job at the market wage rate)

QD = the quantity of labor demanded at the market wage rate
(i.e., the number of jobs offered by businesses at the market wage rate)


Explanations for the Market Wage Rate Staying
above the Equilibrium Wage Rate

Economists suggest several reasons for the market wage rate staying above the equilibrium wage rate. Consequently, it is natural and normal to always have some unemployment.

1. A minimum wage law specifies the lowest price that employers can legally pay for labor. In the absence of the law, unskilled workers would probably be paid less than the minimum wage. Thus, minimum wage laws keep the market wage rate above the equilibrium wage rate. Workers are usually paid based on their productivity. Skilled workers are generally more productive than unskilled workers and thus receive higher wages. Consequently, minimum wage laws are usually only applicable to unskilled workers. A minimum wage is an example of a price floor. A price floor is a legal minimum price at which a product can be sold. If the minimum wage is above the equilibrium wage, then the minimum wage law creates unemployment in the market for unskilled workers.

2. Labor unions are worker associations that bargain with employers over wages and working conditions. Collective bargaining is the process by which unions and business firms agree on the terms of employment. Unions frequently negotiate market wages than are above the equilibrium wages that would be paid in the absence of collective bargaining. Union contracts keep the market wage rate of union workers above the equilibrium wage rate. In some cases, unions may strike to obtain concessions from employers. A strike is the organized withdrawal of labor from a business firm by a union.

3. Efficiency wages are above-equilibrium wages paid by firms in order to increase worker productivity. Firms may find it profitable to pay high wages to improve the health of workers, to reduce worker turnover, to increase worker effort, and to attract higher quality workers. In addition to great pay, SAS, a computer software company headquartered in North Carolina, provides its workers with on-site day-care for children, medical and dental care, and recreational facilities that rival the best health clubs. It is expensive for the company to provide these added wages and benefits. Company executives argue it makes financial sense, however, because the added pay and benefits allow SAS to attract and keep the best workers in the industry. The company saves on the costs of recruiting and training personnel because workers rarely leave for other jobs. The state-of-the-art recreational facilities help keep the workers healthy. Combining this with the readily accessible doctors, dentists, and child-care allows workers to spend less time away from their jobs. Thus it makes sense for some businesses to routinely pay wages that are above the market wage for the industry.

4. There is a cultural expectation that workers receive periodic raises, but pay cuts are generally unacceptable, regardless of economic conditions. Labor markets are not like other markets. Changing the prices of other resources or products does not change the resource or product. If you change the price of a bicycle, it is still the same bicycle. If you change the price of a worker, however, the worker may change. Workers may resent the wage cut and become hurt or angry. Workers may then be less productive, whether that reaction is intentional or not. Consequently, business firms are reluctant to cut the market wage rate, even when market wages are significantly above the equilibrium wage rate in an industry.