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Statement
Media Release
Jobs Update 12.09.03
The Situation is Not Getting Better for Jobs in the
U.S.
Economists and incumbent politicians are excited
about the Productivity numbers. Figured on the basis of how
much output comes from the average worker, Productivity is up
by 9.4% in the 3rd quarter. That’s
good news for the economy—being the highest number in 20 years—but
it’s not good news for workers. The Productivity number is high
because business is continuing to replace workers through technology
and outsourcing. It is still a tough job market with 6% unemployment
reflecting 9 million unemployed.
We need 150,000 to 200,000 jobs added a month
to get to full employment. But
only 57,000 jobs were added in November. Most of those are in
lower paid service sector jobs, while higher paid manufacturing
jobs continue the 37 month disappearing act.
Displaced manufacturing workers eventually find
a job but usually at a 13-14% cut in pay. The average is an
$8,000 loss to $35,000 annually.
Another risk is that employers are squeezing workers, using more
overtime and temporary workers to avoid hiring.
The longer-term unemployed—those looking for jobs for six months
or more—are 24% of the unemployed number. That’s the highest since
1983 when overall unemployment was up to 9%. It’s estimated that
4 million people have quit looking for a job.
Those most at risk of being laid off are the
higher paid employees and that means the folks in age groups
from 40 to 50 and from 50
to 60. They’ve been there longer and they’re paid more. When
costs need to be cut, more cost is eliminated by cutting the higher
paid. These people need a contingency plan.
There are 70 million baby boomers and the youngest
of those turn 40 next year. The working population is getting older, with 32
million by 2015 being over 55. That compares with 18 million in
the year 2000.
Surveys show that 50% of those employed would
like to move to another job and only 3% of those with a job are
satisfied with
the job. These people need to figure out what they want to do
and where they want to be, they need a contingency plan as provided
in the Fallback Position.
The growth in the service sector will continue,
particularly in the health care world. The aging population and living longer,
coupled with technology innovations, will see the rapid expansion
of this sector. Computer workers laid off by the globalization
outsourcing might do well to look to converting their skills to
the technologies of health care.
Food, leisure, administration, and support positions are expected
to grow.
Secretary of Labor Elaine Chao says that prospective
job growth for this decade is likely to include biotechnology,
with 3 million
new jobs, health services with 1.3 million new jobs, and high-tech
manufacturing, projected to add 800,000 new jobs. She didn’t say
how soon in the decade those jobs would be added.
Meantime, the federally-extended 13 week added
to jobless benefits expires this month. Look for Congress to
fight over extending them.
Ten sectors of employment lost 4 million jobs. Manufacturing,
Transportation, and Retail were the hardest hit, a report by Global
Insight said.
One of the trends economists note is that the
numbers reflect an increase in people becoming self-employed. Estimates
are that at least 400,000 new entrepreneurs are out there, doing
everything
from lawn care to consulting in fields related to their past jobs.
For the self-employed getting health insurance
at an affordable rate is a big issue. Independent policies tend to be much more
expensive than large group policies. Wilbur Ross, a turnaround
guru, who reformed Bethlehem Steel out of bankruptcy, did so largely
by reducing health care and pension costs. He describes the cost
problem this way: “There’s more health care cost in an auto than
there is steel costs.”
Former Labor Secretary Robert Reich describes
the changing economy this way: “the old way of thinking about employees was as an investment,
like factories or land. The new way of thinking about employees
is like commodities, like computer chips or cotton bales, to be
stockpiled or discarded as needed."
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