New College Graduates, the Group Hardest Hit by the Permanent Jobs Crisis – II

Last week, I outlined the severe problems of young adults completing bachelor’s degrees.  They included high unemployment, a 25% rate of working in positions requiring their education, skyrocketing tuition, massive related debt, and the detrimental effects of starting good jobs later.  The solutions most have implemented so far, such as living with parents, working part-time when possible, going off the grid, or doing other things instead, have achieved inadequate results for most.  So what would help?

First, along with nebulous college rankings, we need to create a measure of career-job placement.  For a given university, what share of traditionally-aged bachelor’s degree recipients are working in a position requiring that credential within one year?  This metric could be adjusted, but not much – it should not, for example, exclude those in graduate school or taking time off, choices often influenced by perception of low hiring chances.  Schools that refuse to publish this statistic, or will not share data used for it, should have that held against them by possible applicants.

Second, students in about the bottom 60% of their high school classes should generally not go to four-year schools right away.  At this level, many go to college but don’t finish it.  The routine track for average high school students with university aspirations should be to first go to a community college, live at home, and work part-time if they can find it.  If they complete their two-year degrees, they should go on to a regular college or university, where, if they graduate, their diplomas will be the same as if they spent all four years there. 

Third, everyone in a degree program at a four-year school should commit to getting it.  That should be the specific, barely negotiable goal for everyone at that level.  Nobody in doubt as to whether they can, or will, do that should be there.

Fourth, we need to reduce some expectations about college.  The options above will hurt many students’ social lives, but with tuition and jobs being what they are, much of that is a luxury far fewer can afford.  Those in college as well as the rest of us need to spend less, save money when it is available, and, if they have the time and need the income, work when possible.

Fifth, attending a high-tuition private university instead of a lower-cost state one should generally be, except for those in the top 10% of their high school classes or with similar family wealth, out of the question. 

Sixth, young single people having trouble finding a good job should consider moving to a relatively cheap area, at least temporarily.  There are great cost-of-living differences across the nation, with pay rates generally not making up for the highest ones.  Plans of being in, say, New York City, Hawaii, or San Francisco sometimes just need to wait.

Seventh, but how about South Korea?  That is one of the few places in the world where young Americans with four-year degrees are almost assured of being hired.  Almost any can be an English teacher, paid enough to save significant money, with an apartment and health care part of the deal.  The same goes, to a lesser extent, for China, Japan, and Hong Kong. 

Eighth, we cannot wait for external change.  The chances are far greater for another recession than for jobs for young college graduates suddenly getting much better or more plentiful.

Ninth, we all need to realize the employment crisis is permanent.  Last week I saw yet another prime columnist – Robert Samuelson of The Washington Post, this time – express mystification on what is happening with work, labor and wages in this country.  Automation, globalization, efficiency, and a string of smaller factors explain it well enough.  When we understand that, we can at least partially unite to deal with it, and that will benefit young college graduates more than anything else listed here.  

New College Graduates, the Group Hardest Hit by the Permanent Jobs Crisis – I

In the past six years, during which the Great Recession came and went and our perception that the economy is doing well has vanished, people in some categories have been more likely to suffer than others.  

People in their 50s have often found themselves out of their careers, with poor or no working options.  A variety of Americans have seen their incomes plunge, as their good jobs were lost and replaced by lower-paying ones most commonly now created, or none at all.  Parents of younger college graduates have seen their offspring, instead of being monetary assets able to contribute some income to them, turning into liabilities.  Yet it is the graduates themselves who have taken it the worst.

Even those who don’t know the statistics can at least sense that.  Official unemployment for college graduates aged 21 to 24 has improved, but only to 8.5%.  Another 8.3% want to be working but don’t qualify as technically jobless, or are working part-time but wanting full-time.  Another 44% are in positions not requiring their degrees, which, as a New York Times editorial on Sunday put it, are less and less likely to be “well-paid professions” such as electricians or dental hygienists, but are instead “waiters, bartenders, or cashiers.”  After subtracting out people unemployed in spirit but not among the 60% above, such as those off the grid, many getting more schooling, and others following their essentially second-choice paths, we get only about one-quarter of recent, young bachelor’s degree recipients working in paid jobs where that education is needed. 

At the same time, college tuition costs average a staggering 13 times what they were in 1984.  The total amount of education-related debt reached $1 trillion last year (over $3,000 per American), amazingly passing the amount owed on credit cards.  As would logically be the case when combined with the poor jobs situation, loan default rates, now 15% in the first three years alone, are ever higher.  High school seniors, who have heard for decades that college graduates average double the income of others, often do whatever it takes to attend, which, in times of lower income across the board and university financial aid leaving large gaps, usually means borrowing the money.  In the meantime, 46% of people starting college in 2006 failed to get a degree by 2012, meaning that, while they benefited in other ways, they did not even qualify to try to join that 25%.

As time passes, many graduates do get good jobs.  I have written for years about how typical working years start closer to age 30 than to 22, so that’s nothing new.  However, the effect of the delay is devastating.  Financial advisors say that, when careers start at 22, savings plan contributions made at a given percentage of income made in a worker’s 20s rate to be worth more at retirement than those from ages 30 through 65.  Careers dependent on time of service, still most of them, do less well, meaning lower income, with later starts.  As an indication of younger peoples’ lower prosperity, fewer are buying houses;  according to one pre-recession 2008 study, the average age of first-time buyers was 33, with a mean family income just over $64,000.  As the second number has become more challenging, the first is almost certainly higher now.  Since home equity is a major form of household wealth, that means younger graduates are falling behind in that way as well.

How have those finishing bachelor’s degrees coped with the employment situation?  As above, many are doing what they can, with part-time positions or more humble full-time ones.  Many others live with their parents, extending their times of “premature affluence” or having richer lifestyles than their own incomes can support.  Fewer than ever are relocating for work, often a wise decision as more and more good jobs turn out to be temporary.  They have used often-free electronic media frequently and comprehensively, helping them spend less and leave home less, as shown by the share of 18-year-olds with driver’s licenses dropping from 80% to 61% from 1983 to 2010.

Progress on the jobs crisis, never strong, has stalled almost completely.  The Obama administration has moved from even talking about needing more positions to concentrating on raising the minimum wage, sure to achieve the opposite.  Republicans in Washington have offered nothing, other than weak and vague references to taxing the real or imagined job providers less and cutting unspecified federal employment-reducing regulations.  College tuition continues going up. 

The problems of new graduates cannot be allowed to stand as they are.  So what can they, and the rest of us, do?  That will be the subject of next week’s post.  

AJSN for May Up 780,000: 19.5 Million More Jobs Could Be Quickly Absorbed

This morning’s federal employment report was like an old movie set.

The front-view numbers were decent, even good.  The economy added 217,000 jobs last month, about 85,000 more than population increase soaked up.  Seasonally adjusted unemployment held last month’s large improvement to stay at 6.3 percent.  The numbers of people jobless for 27 weeks or longer and those working part-time for economic reasons (no full-time opportunities they can find) stayed about the same at 3.4 million and 7.3 million respectively.  Labor force participation and the employment to population ratio did not get worse or set any new 35-year lows, coming in at 62.8% and 58.9%.  Those saying they did not want a job at all plunged 1.7 million, and the number of non-civilian, institutionalized, and unaccounted-for fell almost 1 million, both probably due to publicity about last month’s unemployment rate drop.  The count of officially discouraged workers, though hardly including all truly in that category, fell from 783,000 to 697,000.     

So what’s the problem?  Well, everything else.

Seasonally unadjusted unemployment rose 364,000 to 9,443,000, bringing the corresponding rate from 5.9% to 6.1%.  The number of people reporting they hadn’t looked for the past year, a statistic that should not fluctuate much month-to-month, shot up over 25% and is now almost four million.  That group could absorb almost 3.2 million jobs by itself, so it deserves more attention than it usually gets.  Overall, the American Job Shortage Number, showing how many more positions could be quickly filled, came in at just short of 19.5 million as follows:

     

These outcomes mean the AJSN gave up over three-fourths of its April improvement.  It has, though, substantially improved over the past year, down 1.3 million from May 2013’s 20.8 million.  That progress is all – actually more than all, since other numbers managed a net worsening – due to lower official joblessness. 

Overall, the new employment report simply underscores the problems we have had for years.  People returning to the workforce on good labor-market news usually find out it can’t accommodate them, and go back to their “discouraged,” “did not search,” “do not want a job,” or “unaccounted for” statuses.  Labor force participation ratchets slowly but fairly consistently down.  The shares of workers out for half a year or longer, and in positions with fewer hours than they want, improve little or not enough from excessively high levels.  There is nothing happening, or even on the horizon, either publicly or privately to fundamentally improve the jobs crisis, and we certainly can’t look to Europe, rife with Great Depression-level unemployment rates, for guidance.

So here we sit.  The turtle has almost stopped crawling.  It is true that slow and steady can win a race, but stationary won’t.          

Hot Jobs of 2014 – A Deeper Look

As always, some careers and other working opportunities get special attention from those who want to inform job-seekers about the best choices they can make.  Those putting out lists of the “hot jobs” or the like use different standards, but one always there is the implication that related careers will be around for a long time.  Three lists, issued in December and more recently, rank-order the best jobs to get into – one by salary.com, one by careeralley.com, and a third issued jointly by CareerBuilder and Economic Modeling Specialists International. 

These lists, though, have one key limitation.  Those who issue them focus more on current demand and only consider a few years of the future.  After that, their conclusions may not hold up, as the trends of automation, globalization, and efficiency will continue to shape where American workers will be needed.  It is critical for today’s students and career-changers to be aware of these longer timeframes, since in many cases they need to invest a lot of time and money, and often will not be ready to he hired at their selected jobs for years.  In last year’s Choosing a Lasting Career, I rated the survival and growth of over 500 positions Excellent, Very Good, Good, Fair, and Poor.  So how did the jobs on these lists do?

Of the ten positions most prominent, none received a forecast of Excellent.  Although only 19 of the 506 jobs I assessed did, I was slightly surprised to see none of those rating higher than fifth on the three listings.  Four came in at Very Good:  daycare center teacher, Registered Nurse, medical assistant, and market research analyst.  All need to be done locally by Americans, are unlikely to be made obsolete by computers, other machines, or automated interfaces, and are serving people with at least steady numbers.  All four, however, have real concerns.  Competition for elementary school teaching jobs of all kinds, already strong, will increase as more men join the field.  Registered Nurses will, in some settings and for some tasks, be replaced by Licensed Practical Nurses or even nurse’s aides.  Medical assistants may become excessively specialized, and market research analysts may lose out to predictive data analysts, who need not be American.

One step behind these four was mental health technician, with Good growth and longevity.  Psychiatric technicians and aides, as the Department of Labor labels them, are low-paid enough to avoid replacement by others, but are often dependent on whom they help being inpatients.

Three other positions rated fourth or higher in the lists got ratings of Fair.  These were public relations specialists (many of their duties will be taken over by other managers), personal financial advisors (at risk to be replaced by both computer programs and lower-paid foreigners) and training and development specialists (a long-term employer’s market will further reduce how much training companies will provide).

While Fair was more or less a weak average growth and survival rating, two of the jobs rated high on the lists did not even do that well.  Fourth on one was financial analyst, in a field that has been growing in recent years but won’t do that for much longer, as workers will be replaced by foreigners not needing to be paid nearly as much, fully automated systems making no mistakes, or both.  The second was, sadly, the highest rated job on two of the three lists and fourth on the other:  software developer.  There is positively no long-term reason for most of them to be Americans, working for the high five-figure salaries plus solid benefits most of them enjoy.  As well, most need to communicate with pure programmers, who are in the same position – if coders are Russian or Indian, then developers from those countries will be not only cheaper but valued more highly.  It is only a matter of time, probably five years or less, before software development becomes a field few Americans can realistically hope to join.

It is not true that nobody should seek the jobs above.  Many people already have most or all of the credentials they need to be hired in these fields, and they would be fools not to consider them.  But starting a course of study now, expecting it to lead to, say, a software job at the likes of Microsoft or Google, would be equally unwise.  In careers as well as in other things we need to consider not only what is occurring now but what will be happening when we get there.  Only when we incorporate the future into our plans will we know what the truly “hot jobs” really are – and aren’t.

Catskills or Nearby Casinos Are On the Way, and Will Be Beneficial

What’s been happening with casinos here in the old Borscht Belt?

Following November voter approval of four new casinos in New York State, the process set by the government has been moving along, and its progress has been much in the news. 

On April 24^th, all companies wanting to build and own a casino here had to submit official preliminary proposals, along with $1 million to cover the cost of the state’s research and investigation about them.  That call precipitated 22 for the three areas in which the four will be allowed – seven for around Albany and Saratoga, three in a mid-state L-shaped expanse, and the remaining 12 in or south of the Catskills. 

Although interest in the famous old Jewish resort area was the heaviest, five of the 12 proposals were not welcomed much by many of its residents.  They were planned for Orange County, and many living in Sullivan County, where Grossinger’s and other old resorts were located, think they would become an irresistibly more convenient choice for people coming from New York City.  The concern was stated well by Steven Plotkin in a letter in the Sullivan County Democrat, saying to Orange County residents that “we are economically depressed, you are not,” and that “we have been chasing this dream for 30 years.  How long have you been chasing it… two weeks?” 

Indeed, several Sullivan County casino efforts have failed over the past decades, and as of March, Orange County unemployment stood at 6.3%, compared with 8.4% for Sullivan.  New York Governor Andrew Cuomo has not officially said he wanted to avoid Orange, but has held that a main purpose of the casino initiative, which he supported, was to help relatively depressed areas.  The minimum amounts that companies would need to invest, revealed May 12^th, were also set much higher, $350 million over the cost of land and other initial expenses, for Orange County, compared with $130 million for Sullivan.  That difference may prove to be irrelevant, however, as most of the proposals called for way over the higher amount in capital investment anyway.

There have been two other controversies.  One was put forth by Hasidic Jewish groups.  A number of rabbis met in March to start a campaign to stop casinos from being built in Sullivan County, naming the presence of Orthodox schools, camps, and yeshivas in the area.  Another has been about the amount of preferential tax treatment the resorts would receive.  Although it is common, as an incentive, for a new large hotel to be exempt from mortgage tax, from property tax for some number of years, and to receive a discount on sales taxes on its hotel and entertainment locations and business, it may not be legally possible for the same to be granted for gambling facilities or revenue. 

So what will happen next?  That is up to the 22 companies committed to the process.  By June 30^th they are required to submit detailed proposals, which the state Gaming Facility Location Board will evaluate over the following few months.  The stated selection criteria call for 70% of their final decision to be based on “economic impact factors” such as the number of jobs created, revenue value to state and local governments, and the proposer’s experience and proven ability in building and running casino resorts, along with 20% based on “local impact factors” and 10% for “workforce enhancement factors,” including dealing with problem gamblers.  The casinos will be expected to be finished and in business within two years of acceptance.

So what can we expect?  Although most seem to agree that Sullivan County is a preferred location for one, and maybe two, of the four new casino resorts, the criteria above may force the selectors to choose one in Orange instead.  Locations in Newburgh and, especially, Tuxedo, both closer to the city and with easy access with the New York Thruway, could afford to be larger, and would therefore create more jobs and revenue, have more amenities, and recapture the most out-of-state gaming revenue, all parts of the 70% criteria section.  Those on the board may be nostalgic for the likes of a new Grossinger’s, with its stand-up comedy venues and tribute to the great performers who got their starts in Monticello and Liberty, but the rules they must work with may prevent such a location from ending up the closest one to New York City.  If the committee decides to grant licenses to one casino apiece in Sullivan and Orange, the Sullivan one will almost perforce be less successful and may need to be smaller.

Even with the possible problems, though, what I wrote before still stands.  The Catskills or Hudson Valley-area casino, or casinos, will create a lot of jobs, including hundreds if not thousands of temporary construction positions along with what could easily be more than 1,000 permanent local ones.  The new tax revenues, even if reduced, will be quite large, and will benefit local residents.  More people, not fewer, will participate in outdoor recreation and other tourist activities in the area.  And if Sullivan County gets at least one of the licenses, the Catskills will be prominent, for the first time in decades, on the vacation map. 

        

Hillary Clinton Has Nothing to Say on Jobs

Here we are, heading into the summer of 2014.  In some ways it’s a good while until the 2016 presidential  election – the midterms are still over six months away, and it’s over 32 months before Barack Obama’s successor takes office – but in another way it’s right around the corner.  Obama seems like the lamest of lame ducks, with little of an agenda and little chance of getting anything passed that would require bipartisan support.  As happens consistently with two-term presidents on the back nine of their tenures, we’re better off focusing on what can happen in 2017 than on being much concerned with governmental change before then. 

Although few presidential hopefuls have declared their candidacy thus far, those who might officially decide to run are already, in effect, campaigning.   One way of being noticed by the media is to give speeches and weigh in on political issues, which, for someone as driven as a potential president, need not be taken as a commitment to run for that office.  Yet such public appearances give the pre-candidates opportunities for easy exposure and, even more importantly, a way to gauge national reactions to what they say.

In March, Hillary Clinton had such an engagement.  On March 22^nd, she opened a program on higher education at Arizona State University, speaking to an audience which included about 1,200 students.  She let loose some rather stock things about education in general:  vocational and technical jobs should be “respected,” community colleges should be supported, first jobs are important, young people can get various skills at workplaces, and so on.

What she didn’t say, though, was anything about how today’s graduates can get such jobs.  Unemployment for those who got bachelor’s degrees in 2013 is 10.9%, and not only has that number been higher recently, it does not reflect the large numbers of graduates who aren’t actively looking.  It also does not address underemployment, as working at low levels after completing school has become a cliché.  So what ideas has she voiced on improving the jobs crisis?

None.

To get a baseline on Clinton’s stated political positions, I found a compilation of them on Wikipedia.  It covers what she has said over the past ten years or more, on economic policy, foreign policy, civil liberties and democracy, and social policy.  The document gives her comments on everything from “free-market capitalism” (she’s for it, but doesn’t want it to “run roughshod over people’s lives”) to flag burning (she wants it illegal, but without a constitutional amendment).  The listing of her stated views, not counting endnotes, ran to 13 pages. So what was in it about how to create jobs, or how to set up an environment in which more jobs would be created by others?

Nothing.  Not a word.

Other possible nominees have had plenty to say on the subject.  To name only one, Rand Paul, for all his faults, already has given us almost a book’s worth of employment views.  It’s not enough for Clinton to say things, as she did in Tempe, such as “education is the key to unlocking opportunity,” when everyone aware of employment trends is questioning that or at least regretting its decreasing validity.

Sportsbook.com, a betting site which, being outside the US, allows wagering on presidential elections, has Clinton as the prohibitive plurality choice to be elected.  The line on her is -175, meaning that you can put down $100 and receive $275 if she wins.  If you like to make bets and think Hillary has at least a 37% chance of becoming our 45^th Chief Executive, you should consider this one.  The shortest odds elsewhere, on the Republicans Chris Christie, Jeb Bush, and Marco Rubio, are each -1500, meaning if you see any as more likely than 15 to 1, you might take the site up on its offer.

However, a backlash on Clinton may be starting or even in place.  An article in Slate, with a heavily Democratic readership, titled “7 reasons Hillary Clinton’s nomination is far from inevitable,” came out Tuesday.  It stated in its New Liabilities section that “not enough jobs are being created even to keep up with population growth,” since voters may want change that she, as a 20-year high-level Washington veteran, will not be perceived as able to offer.

The backlash is a good thing.  We may, in 2016, still face a choice between this well-established Democrat and a Republican striving to attract the center with new ideas.  A vote for her may or may not be advisable.  But now, one thing appears clear.  Hillary Clinton does not seem likely to help the permanent jobs crisis.

The Latest on Jobs, From Temporary Re-Employment to Racial Realism

Over the past three weeks, there have been several worthwhile work-related pieces in the news. 

First, there’s one from The Washington Post on April 18th, “Long-term unemployed struggle to find - and keep - jobs.”  The idea here is that once many with lengthy times without jobs finally get work, it is all too likely not to last.  A study the article quoted found that of a group of those jobless six months or longer, 23% found work within “a few months,” but a year from then, one-third were unemployed again.  That’s not surprising, since workers, as with professional team sports athletes, often start out with long stretches with one organization, and then reach what you might call the nomadic phase of their careers.  Mine was typical – 15 years with AT&T, 2 ½ years with Dictaphone, less than a year apiece with three others, new career the next.  Not totally the norm, but common, and a legitimate problem for those less well positioned than I was to find something different.

Second, from The New York Times, April 22^nd, “Job Market for College Graduates Improves Slightly.”  Along with the general unemployment rate, that for people recently completing bachelor’s degrees has fallen.  It’s still nothing to be proud of – 10.9% for 2013 graduates – especially knowing not only that all those still slacking at home aren’t being counted, but that colleges and people in them have now had over four years, since the Great Recession ended, to adapt.  University attendance is still a good thing, but there’s nothing here to change my perception that the time for a majority of high school graduates going to regular college programs will end.

Third, also from the New York Times, was an April 30 editorial “The Dark Side of the Sharing Economy.”    Hey, their columnist Thomas Friedman was intoxicated about people being able to sell off their spare, and not so spare, resources to make ends meet, so what’s been going wrong with people renting out their rooms?  Apparently plenty, says the Times Editorial Board.  Businesses with multiple Airbnb listings in the city turned out to be the placers of, three-plus months ago, 30% of them.  The editorial, as you might suspect, did not take a stand against these amateur-or-is-it-professional pseudo hoteliers by defending the rights of those who put up with lots of requirements and regulation to offer rooms in real ones, but came out against those rentals on the grounds that they cut the housing supply.  True.  As I’ve said before, renting out rooms semi-legally is rather stinky employment, which is why we shouldn’t regret it’s being vastly less common, which appears will be the case within months.

Fourth, another Times editorial, on last month’s jobs numbers, published May 4^th, “A Better Economy, Still Far from Good.”  I was surprised to see responses to the April employment statistics to turn out lukewarm, or even negative – as always, I wrote my AJSN blog post seeing only the Bureau of Labor Statistics information, and thought I’d see more America’s-going-back-to-work giddiness.  Instead, here we have a newspaper solidly on the Democratic side issuing opinions such as “Let’s keep this (data) in perspective:  wages remained flat, nearly 10 million unemployed people are looking for jobs, and millions more have become so disenchanted that they have given up on finding work altogether.”  Correct, but those are only rudimentary perceptions beyond the unemployment numbers, and it seems odd to mention them after what may have been the best set of monthly jobs statistics in four years.  On the piece went to mention how slow the “recovery” has been, even though the recovery is long over, and actually to chide Senate Republicans for blocking a bill to raise the minimum wage, amid all this joblessness, 39%, before ending by saying “everything is not right” for people damaged in 2008 and 2009.  That is also true, but there was no mention that we may be facing a permanent jobs crisis.  That possibility has been considered more often lately, but not enough.

Last was an op-ed New York Times piece, by sociology professor John D. Skrentny, “Only Minorities Need Apply,” published three days ago.  It was stunning to see this title in this newspaper, and the article brought up three excellent jobs-related concerns.  One was the clash of what he called “racial realism,” much the same as rational discrimination, in which business needs determine the optimal race or ethnicity of employees, with the overall anti-discrimination ethic.  Another was reverse racial discrimination as a result of racial realism.  A third was damage done to blacks and Hispanics by being assigned to the like of stores or territories heavy with people of their own ethnicity, where sales, and as a result their own personal earnings, are often lower.  All worth thinking about, and I can add a fourth – perhaps black nurses might just plain not want to work with high shares of black patients, even if their employers can point to studies showing better health outcomes when providers and patients share the same race.  There are no easy answers here, and I hope we hear more from Skrentny, and what he wrote about, in the future.