Help me understand the rise in unemployment.

[PresidentClinton07]

Being young is no excuse, but I know close to nothing about our economy. I am however, trying to become more aware of the current situation.

I would like to be informed about the rise in umemployment. Why is it increasing, and what can be done to solve this problem?

Thank in advance.

[PresidentClinton07]

For those wondering, my interest regarding this issue started when I had troubles obtaining a job , and then I started finding out the troubles faced by many now a days.

[Springfield]

Well, basically.... George W. Bush.

And that is the answer.

[blitzpackage]

Well, basically.... George W. Bush.

And that is the answer.

Well I'm not going to open that can of worms......

Basically, some of it can be attributed to outsourcing and tax cuts for businesses that move offshore.

Outsourcing has really hit the textile industry (believe me, I have a degree in textiles) because Americans simply lose out to Asia and South America because of labor costs here. Also, a lot of people blame these free trade agreements because an American made towel would cost as much as $8 each while a towel made in Pakistan that you find on the rack at WalMart is $3. This is just my experience in the textile sector, but imagine the discrepancy in electronics or automotive production.

As far as tax cuts for offshore big business, I don't know much about it, but for some reason I can't wrap my head around why this concept is even practical for American workers or why it was implemented in the first place. Maybe someone can enlighten me on this.......

[PresidentClinton07]

Well I'm not going to open that can of worms......

Basically, some of it can be attributed to outsourcing and tax cuts for businesses that move offshore.

Outsourcing has really hit the textile industry (believe me, I have a degree in textiles) because Americans simply lose out to Asia and South America because of labor costs here. Also, a lot of people blame these free trade agreements because an American made towel would cost as much as $8 each while a towel made in Pakistan that you find on the rack at WalMart is $3. This is just my experience in the textile sector, but imagine the discrepancy in electronics or automotive production.

As far as tax cuts for offshore big business, I don't know much about it, but for some reason I can't wrap my head around why this concept is even practical for American workers or why it was implemented in the first place. Maybe someone can enlighten me on this.......

Ah I understand. Labor costs is one of the main reasons why are products are so high compared to other countries. Thanks for the insight.

Anybody else?

[PresidentClinton07]

Well, basically.... George W. Bush.

And that is the answer.

I figured I would see that answer. What has he done to make a large majority of people make that statement?

[dreamingwolf]

I figured I would see that answer. What has he done to make a large majority of people make that statement?

people always make that statement about presidents, even when times are good.

[JMS]

Basically when people percieve an economic down turn and job insecurity, they stop spending as much. Consumer spending drives our economy. When it decreases, companies lay off workers ( 200,000 ) last month and 63,000 fewer jobs the month before that in feb. We need to add 100,000 jobs to the economy just to break even with new workers entering the job market.

Anyway why do people percieve an economic slowdown.

• Inflation ( high oil prices ).
  
• Credit crunch ( home loan crisis)
  
• massive record deficites.
  
• massive iraq war spending
  
• shakey dow jones.
  
• historically weak dollar.
  

[PresidentClinton07]

Basically when people percieve an economic down turn and job insecurity, they stop spending as much. Consumer spending drives our economy. When it decreases, companies lay off workers ( 200,000 ) last month and 63,000 fewer jobs the month before that in feb. We need to add 100,000 jobs to the economy just to break even with new workers entering the job market.

Anyway why do people percieve an economic slowdown.

• Inflation ( high oil prices ).
  
• Credit crunch ( home loan crisis)
  
• massive record deficites.
  
• massive iraq war spending
  
• shakey dow jones.
  
• historically weak dollar.
  

Thanks for the info.

Wow, I didnt know that many workers were layed off in the previous months. Interesting to see that our perception of the future economically, is what really is the root to the rise in umemployment( even though its a fact that the economy is ona down turn).

Thanks once again

[Mark The Homer]

Corporate revenues are down, which causes down-sizing, which causes pink slips. I have a good friend who was just down-sized out of a very nice high paying job.

[Zen-like Todd]

http://en.wikipedia.org/wiki/Business_cycle

[Burgold]

Some good answers above. I'd also say that the housing/foreclosures have hurt the job market a bit. The banks are now feeling pressed and more skittish about loaning money because they have less of it and have lost out on a bunch of gambles. That means businesses have less money to borrow to grow their business, which means that there's less economic expansion and less job growth or even job loss.

Outsourcing is another factor. Illegal immigration has some impact. Basically, we're in a perfect storm created by some factors we could have easily prevented and some which were unforseeable.

It's not as simple as Bush and it's not all his fault, but the government does share a good sized portion of the blame for looking the other way a bit too often and for issues like paying for Outsourcing or the Energy Bill which gave the energy companies a huge payoff and the ability to really and truly gouge us, which is coming to bite us currently.

[ross3909]

Well, basically.... George W. Bush.

And that is the answer.

I was going to say the Democrat let congress, if you look at the numbers since 06 when they came in, its pretty shocking. But I know people like to blame Bush for everything, I drove over a nail this morning...I hate Bush!

[Burgold]

I was going to say the Democrat let congress, if you look at the numbers since 06 when they came in, its pretty shocking. But I know people like to blame Bush for everything, I drove over a nail this morning...I hate Bush!

I think you're half kidding here, but I think the 2006 election was about the people realizing that things were taking a really bad turn... corruptionwise, economically, Iraq etc. It was a throw the bums out kind of election. The Dems actions really haven't had an opportunity to permeate into the economy and effect it yet. However, I do think the Dems deserve a good share of the blame for playing politics and sitting on their hands while letting things fall into disrepair. I'm not sure that they really could have done a lot to soften the mess we're in now, but they should have done much more than the nothing which they've essentially done. I'd split the blame about 65-35

[Duckus]

Being young is no excuse, but I know close to nothing about our economy. I am however, trying to become more aware of the current situation.

I would like to be informed about the rise in umemployment. Why is it increasing, and what can be done to solve this problem?

Thank in advance.

Well what are you looking for? Just a part-time summer job? Have you finished HS yet?

[gbear]

Just for a bit of perspective, do people really think the job market is that bad? From reading this thread thus far, I would think we were in the great depression.

Back when I was in college they used to teach that frictional unemployment for an optimally running economy should be between 5-6%. We've been under what used to be concidered rock bottom unemployment numbers for a healthy economy for a while now...and we got spoiled?

A certain level of frictional unemeployment meant there were always going to be a certain percentage of people between jobs. The plant closes or they move to a town because their spouse got a job, etc. Frictional unemployment was considered a good thing because it meant their were capable people to be hired when businesses wanted to expand or when a new industry emerges. My guess is the ability to get good workers has been a foot on the break of a lot of expansions because I don't think the last recession really hurt the employment figures much and it ended quickly. On the employment side now, do we have an unhealthy (from a macro economy view) economy?

Now that being said, we are losing jobs. With ever more people entering into the work force, a loss of jobs will make the percentage of unemployed rise quickly as that number gets hit at both ends. I am in no way saying the trend isn't troublesome, but I do think a little perspective on where we are now might be useful if we are talking about something as general as the "rise in unemployment" as apposed to looking at specific industries & towns getting hit.

[Duckus]

Just for a bit of perspective, do people really think the job market is that bad? From reading this thread thus far, I would think we were in the great depression.

Back when I was in college they used to teach that frictional unemployment for an optimally running economy should be between 5-6%. We've been under what used to be concidered rock bottom unemployment numbers for a healthy economy for a while now...and we got spoiled?

A certain level of frictional unemeployment meant there were always going to be a certain percentage of people between jobs. The plant closes or they move to a town because their spouse got a job, etc. Frictional unemployment was considered a good thing because it meant their were capable people to be hired when businesses wanted to expand or when a new industry emerges. My guess is the ability to get good workers has been a foot on the break of a lot of expansions because I don't think the last recession really hurt the employment figures much and it ended quickly. On the employment side now, do we have an unhealthy (from a macro economy view) economy?

Now that being said, we are losing jobs. With ever more people entering into the work force, a loss of jobs will make the percentage of unemployed rise quickly as that number gets hit at both ends. I am in no way saying the trend isn't troublesome, but I do think a little perspective on where we are now might be useful if we are talking about something as general as the "rise in unemployment" as apposed to looking at specific industries & towns getting hit.

Well, when I graduated from college 3 years ago I got a job pretty quickly - I did not find it hard at all. I left that job and worked abroad for a few months. Since being back finding a job has been pretty crazy in DC, were are talking about hundreds and hundreds of resumes.

Talking to HR people at a few jobs which I have been interested in a lot, they have found that in DC a lot of people with Graduate degrees are not finding the upper level jobs, higher paying jobs that they thought they would get out of school. With more and more people just going to get a Masters, MBA, etc the field is flooding since less and less jobs are available with the economy.

Therefore, tons of people with Graduate degrees of all types and are applying and getting entry level jobs. Sucks for people with an undergrad degree right now trying to find work, even more than just a few years ago. We are talking about people with Masters taking jobs that pay $35,000 - which is DC is pretty ****y.

Making matters worse, a lot of people I know are just going back to school because they can't find a job. Basically that is the answer for young people. Just keep going to school and you wont have to worry about finding a real job. But this is just feeding into this cycle.

Unfortunately, they then take jobs they are way over qualified after graduation because they can't find other work.

[SkinsHokieFan]

People in the DC area are having trouble finding jobs? Really? People with Masters degrees are taking 35k? You have any source for that Dukus?

My gosh, I guess my expierence is just different. Amongst my friends, frictional unemployment is usually under a month, if that, and that is voluntary. One jackass I know is getting offers of 150k to do network security, and he is 4 years out of college. He does though have a TS/SCI and will have his masters very soon

As for outsourcing and illegal immigration, both are strawmen built to put the blame somewhere. Seeing how we have no free trade agreement with Pakistan, that argument is a bit bunk also.

Even with the economy softening, there are still tons of jobs out there. As Gbear said, we are below the frictional unemployment rate, and in the DC area we are way under that number with unemployment hovering at 3 percent

What kind of job are you looking for?

[gbear]

I guess my issue is that much of the evidence is anecdotal...or localized/specific to a group of people rather than the entire market.

I don't dount there are people who are highly educated but are now educated in fields not looking for workers at the level for which they are now qualified. That happens all the time saddly. Going back to school to gain marketable degrees isn't a bad thing. Having a degree that makes one promotable from an entry level position is also a bonus. Sometimes one does have to take a job for which one is over-qualified.

Often times, even with credentials it seems to take time to find an optimal job. What's more it takes persistance. Finally it takes some lucky timing. I doubt I could get the first opening in my job ladder now. It is a tougher job market than it was 10 years ago.

My problem with saying the job market is soft now is that the over all unemployment numbers are still low. That doesn't mean all industries are hiring. It means there are still employers looking for employees. While every one seems to look at manufacturing jobs as a bell weather, it seems they forget indusries like nursing where we have shortages.

[SkinsHokieFan]

I guess my issue is that much of the evidence is anecdotal...or localized/specific to a group of people rather than the entire market.

I don't dount there are people who are highly educated but are now educated in fields not looking for workers at the level for which they are now qualified. That happens all the time saddly. Going back to school to gain marketable degrees isn't a bad thing. Having a degree that makes one promotable from an entry level position is also a bonus. Sometimes one does have to take a job for which one is over-qualified.

Often times, even with credentials it seems to take time to find an optimal job. What's more it takes persistance. Finally it takes some lucky timing. I doubt I could get the first opening in my job ladder now. It is a tougher job market than it was 10 years ago.

My problem with saying the job market is soft now is that the over all unemployment numbers are still low. That doesn't mean all industries are hiring. It means there are still employers looking for employees. While every one seems to look at manufacturing jobs as a bell weather, it seems they forget indusries like nursing where we have shortages.

Good post, and it will take some time to figure out the numbers

Is the job market soft these days? Sure. Are employers still looking to hire? In general yea, just not like the in late 1990s, or the period from 2003-2006

I am with you in that it is hard for me to say this is a bad job market with unemployment around 5 percent, but I also do see what you are saying in that some industries are looking, and others are not

[Duckus]

People in the DC area are having trouble finding jobs? Really? People with Masters degrees are taking 35k? You have any source for that Dukus?

My gosh, I guess my expierence is just different. Amongst my friends, frictional unemployment is usually under a month, if that, and that is voluntary. One jackass I know is getting offers of 150k to do network security, and he is 4 years out of college. He does though have a TS/SCI and will have his masters very soon

As for outsourcing and illegal immigration, both are strawmen built to put the blame somewhere. Seeing how we have no free trade agreement with Pakistan, that argument is a bit bunk also.

Even with the economy softening, there are still tons of jobs out there. As Gbear said, we are below the frictional unemployment rate, and in the DC area we are way under that number with unemployment hovering at 3 percent

What kind of job are you looking for?

I am mostly referring to International Development (Government, Private, NGO), International Relations, International NGOs, Poli-Communications for myself. Most development firms want you to have a masters. I don't know how to offer you proof, I guess you can come to some interview with me . I graduated Cum Laude from a top 3 International Relations school in the country and have worked and lived extensively abroad for the past 5 years and also worked in DC for 2 years. So its not like I am coming in with a blank resume.

Obviously this is a high level example, but a place like Brookings. They will start you off around 38, 39K to be an assistant or a research assistant and you better have a masters degree or know someone.

I don't know anything about the IT field or business, maybe it is different for those people.

[gbear]

Duckus,

IS any of that at all likely to be soft because it's an election year and the companies are uncertain whom they will be working with next year?

[SkinsHokieFan]

I am mostly referring to International Development (Government, Private, NGO), International Relations, International NGOs, Poli-Communications for myself. Most development firms want you to have a masters. I don't know how to offer you proof, I guess you can come to some interview with me . I graduated Cum Laude from a top 3 International Relations school in the country and have worked and lived extensively abroad for the past 5 years and also worked in DC for 2 years. So its not like I am coming in with a blank resume.

Obviously this is a high level example, but a place like Brookings. They will start you off around 38, 39K to be an assistant or a research assistant and you better have a masters degree or know someone.

I don't know anything about the IT field or business, maybe it is different for those people.

Ok that makes much more sense to me. Yea those fields tend not to pay nearly as much as the financial services or IT or defense contracting fields, which is why I was stunned by your numbers

Most of the people I know and went to school with are either financial services (like me) or IT people. All of the IT kids I know started off at 50k or up coming out of college and many are now in the high 60s or low 70s, including my outlier friend getting offers for 150k!

I know in terms of money, the NGO, internation relations field isn't going to do it. It probably is far more rewarding and interesting work though then financial services or IT

[Duckus]

Duckus,

IS any of that at all likely to be soft because it's an election year and the companies are uncertain whom they will be working with next year?

Obviously I am no expert in HR and I really don't know why it seems harder now than before, but I would say you are right about the political situation. It is defiantly a factor.

1) In poli-communications the field is in a weird situation right now. Once HRC or Obama wins the nomination a lot of jobs will open up, like they did when McCain won (election temp jobs) in communications. This are high paying, lot of work, but fun jobs. But firms can't hire anyone until they find out if there man or woman has won the nomination. (A big reason why I hate this long process).

2) DC is THE location for the fields I am working in. NYC and some west coast cities have there share of it. But DC is the international development, IR, NGO/Political communications hub of the country. Therefore, every single person with a Masters degree from the top Public Administration, Political Science, International Relations, and Poli-Comm schools are coming to work. There are lots of jobs but the level of education is extremely high. As I said before, most of your entry level jobs are requiring Masters degrees. Most jobs which are now for undergrads are administrative, which can be extremely boring.

3) Depending on who wins in November a lot of people will be fired or hired. People say election time is crazy in DC, with the jobs market, now I see why and it has not even really started yet.

Now, to be fair. I have turned down a handful of jobs and right now I am being picky about the company I want to work for. I got stuck in a **** job before, so I am taking my time finding work now.

[sacase]

Well I work in the intelligence community and there are a ton of jobs, we have far more people retiring than people coming into the field. It is just that hard to get people with clearences in. But if you do get in the pay is extreamly well.

The problem comes in where people with advanced degrees come in and think they should be promoted ahead of people who might not have a degree or only have a Bachlors. The thing is people with no degree or bachlors often have many many years of experience. I honestly think people need to go out and get some experience before they get their masters, it will help out so much in the end. There are still a lot of jobs out there, but like a previous poster said, its more of who you know than what you know.