Jobs: Short-term hope, long-term despair
Friday's jobs report showed some glimmers of a recovery but if you're among the 8.8 million Americans still unemployed after nearly four months, you may have been left scratching your head. You're not alone. The number of discouraged job s
Friday's jobs report showed some glimmers of a recovery but if you're among the 8.8 million Americans still unemployed after nearly four months, you may have been left scratching your head.
You're not alone.
"Whether you say the jobs market is improving or getting worse, there are people who will say you're crazy," said Lakshman Achuthan, managing director of Economic Cycle Research Institute. "That's because there are two Americas, and they're both right."
Of the 8.8 million who have been unemployed for more than 3-1/2 months, there are 3.5 million more now than there were at this point last year. And for this group, the job market is looking grimmer by the day. According to the Labor Department, a stunning 58.9% of jobless Americans have now been unemployed for more than 15 weeks -- an all-time high.
On the other hand, the job market is rapidly improving for those who have been unemployed for less than 3-1/2 months. There are 1.2 million fewer Americans who have been unemployed for under 15 weeks, compared with this time last year. The 41.1% who have been out of work for fifteen weeks or less marks a record low.
One caveat. Some of those who have dropped out of the under-15-week group may still be out of work, putting them into the longer-term unemployed group.
A closer look at the numbers helps paint a picture of the increasingly fractured job market.
Economists say most of the workers who have been out of a job for more than 15 weeks include those in slow-to-recover industries like construction, finance and manufacturing. Unfortunately for them, those businesses will likely be the last to recover.
"There is simply no business demand for construction workers or the guys writing credit-default swaps and derivatives," said Achuthan. "The economy, going forward, doesn't want them."
When the housing and credit bubbles burst in late 2007 and 2008, the economy tanked. Leading up to that, when the bubble was expanding, both industries had a glut of workers. That left those industries over-exposed to financial losses when things turned sour. Both markets are just starting to recover, but businesses are still wary about hiring back construction workers and complex finance experts.
"Those areas that were over capacity will have no bounce back anytime soon," said Doug Roberts, chief investment strategist for ChannelCapitalResearch.com
On the flipside, the short-term unemployed are largely from the services industries, economists say. Those with training in private and professional services have been able to find jobs faster in a number of growing industries like health care, information technology and education.
For instance, the health-care industry has added 210,000 workers over the past year, according to the Labor Department. With an increasingly aging population, demand for health-care services is growing rapidly.
Education has added 36,000 jobs during the past 12 months, and other industries like tech and accounting have also recently started adding positions.
For the growing number of people who have been unemployed for 15 weeks or more, there's no easy solution to get their jobs back.
"The problem is that most the of the long-term unemployed are older people that have been doing the same thing for years. You can't just take a construction worker and give him a job in a hospital," said Achuthan. "No jobs bill is going to be able to deal with that."
Historically, after an industry's bubble burst, it has taken a long and steady recovery before businesses were willing to take a chance and hire again. Meanwhile, its workers' skills atrophy, and they cost the country about $100 billion a year in lost productivity, Achuthan said.
For those who can't find work in their fields but are able to get training or adapt their skills to new endeavors, there is a silver lining: temporary, introductory-level jobs are one of the fastest-growing sectors. Nearly 100,000 temporary positions have been created in the first two months of 2010 alone.
"The huge trend of temporary hiring will continue for a while, which is good for people looking for just about anything," said Roberts. "Now people are just happy to have any job."