Don’t break out the champagne yet. Just because the U.S. Bureau of Labor Statistics reported that the unemployment rate was 5.5 percent in March 2015 — a healthy drop from 7.5 percent in March 2013 — doesn’t mean that “Happy Days are Here Again.”
Those numbers are deceiving, says Ernie Goss, Ph.D., the MacAllister Chair and professor of economics at Creighton University, and editor of Economic Trends, a newsletter with more than 11,000 subscribers.
“Two factors are causing the drop in unemployment,” Goss says. “First, the economy is improving, albeit at a slow pace. For example, GDP growth for 2015 is expected to be around 2 percent, which is well below a normal 3.5 to 4 percent. The recession ended in June 2009; however, this has been the slowest economic recovery since the Great Depression in the 1930s.
“And secondly, more and more of the unemployed have left the labor force due to becoming discouraged by not being able to find a job. The current labor force participation rate — those age 16 and above who choose to work or seek work — is the lowest in more than three decades.”
Here’s how the unemployment rate works: It is based on the number of people who are unemployed and have registered for work at unemployment offices; in other words, it counts the number of people who are actively looking for work as a percentage of the total labor force.
Those who aren’t registered at an unemployment office don’t count in the numbers. Therefore, the unemployment rate may actually be higher than the numbers indicated by government statistics.
Nevertheless, the economy is getting better and this bodes well for college students seeking employment after graduation, Goss says: “The job market for skilled and well-educated workers has improved significantly since the recession ended.”
Kandace Miller, Ph.D., president and chief executive officer of the AIM Institute, an Omaha-based career development organization that promotes technology, agrees with Goss’ assessment.
“Technology is an economy-neutral job segment,” Miller says. “It doesn’t matter what the economy does, there will always be a labor market for people with technical skills. There will always be a need for people who are adept at creation and innovation, and designing new technology.”
The Bureau of Labor Statistics reported that employment grew by 126,000 jobs in March 2015, after a gain of 295,000 jobs in February, and the unemployment rate was holding steady at 5.5 percent.
Employment continued to trend up in professional and business services, health care and retail trade, while mining lost jobs. Job gains occurred in food services and drinking places, professional and business services, construction, health care, and in transportation and warehousing. Furthermore, the Consumer Confidence Index registered 102.9 in January, its highest level since August 2007.
Though more people appear to be working now than three years ago, not everyone has benefited from the upturn. Goss points out that the job market hasn’t improved for the less skilled, the less educated, nonwhite job seekers and youth.
Plus, some industry segments are not only losing jobs, but are disappearing. Witness the number of bookstores that have closed because more people are buying books online.
Goss urges students to study labor trends. For example, recent news reports note the explosion of baby boomers entering retirement, and predict that the number of dementia cases is expected to rise. This signals there will be a great need for skilled nurses, nursing home workers and other health care professionals with geriatric skills.
This works well for students planning to enter the job market in the future. But what about people who have recently lost their jobs and are now in a state of limbo?
“There are two things that will guarantee that you will always have a job: You have to be willing to be retrained, and you need to be geographically mobile,” Goss says. “Each month, we see the creation of 200,000 to 300,000 jobs. The question is, Where are these jobs being created?
“If you’re in the automobile manufacturing sector, and you want to stay in that sector, are you willing to move from, say, Detroit to Austin, Texas? Plus, are you willing to retool yourself by getting additional skills through education and training? Unfortunately, when some people lose their jobs, they are often unwilling to be retrained because they believe themselves unable to learn new skills.”
Barring a sudden catastrophic economic or political world event, the U.S. unemployment rate should hover between 5.3 and 5.4 percent through 2025, according to Statista, an Internet research firm.
The economic indicators show that the U.S. economy is going in the right direction, but Miller cautions that the numbers reveal good and bad indications of things to come.
“The good sign is job postings are at prerecession levels and growing,” Miller says. “The bad sign is that the unemployed may not be the ones taking those jobs. New entrants into the job market, such as graduates, immigrants or retrained people, are filling many of those openings, so the chronically unemployed will remain so to a large extent.”
Another trend that has shown great growth is the home office. Though popular with entrepreneurs — a home office means no rent payments plus a chance to deduct a portion of your mortgage from your income tax — Miller believes that the number of payroll employees who work at home will level off.
“Many employers I’ve talked to aren’t crazy about the idea of people working at home,” she says. “But those employers don’t mind it if their people occasionally work from a Starbucks. So, more likely, we’ll be moving to the idea of a mobile office, where people can work in multiple places.”
Miller points to the “so-lo-mo” mantra epitomized in the television show Silicon Valley, featuring high-tech engineers working to develop new apps. “Social-local-mobile,” she says. “Young people don’t want to sit home alone in a room and work online. They want to be engaged together. There’s a big need for social media, and for green communities of people to get together.”
The important thing to remember about trends and numbers is that they change, because new ideas are always being introduced — especially in the realm of technology.
With this in mind, Goss suggests that the way to always stay ahead of the curve, and to remain employed, is to have a good foundation of education.
“We continue to lose jobs in the manufacturing sector; for example, baseballs will never be produced in the U.S. again,” he says. “But if you can write well, communicate well, have good math skills and can learn another language, it’s a safe bet you will always find work.
“In other words, have a good liberal arts education. These are skills that will last you for your lifetime.”
