Many Jobs Go Unfilled While Real Unemployment Remains High

Posted by Jake Richardson on Oct 9, 2013 3:30:00 PM


We all know that the national unemployment rate underestimates true unemployment. The real unemployment rate may be double what gets reported by the Bureau of Labor Statistics. That means there are far more unemployed and underemployed people. How many more exactly, doesn't seem to be readily known, at least by some of the mainstream sources.

Furthermore, there can be a damaging effect to a person's chances of re-joining the workforce the longer she or he is unemployed.  Researchers at the University of Chicago, University of Toronto and McGill
University asked in their study paper, "Does the length of time out of work diminish a worker's job market opportunities? This question attracts substantial attention from policymakers and researchers alike, reacting to the widespread belief that the adverse effect of a longer unemployment spell  - what economists call negative duration dependence - undermines the functioning of the labor market and entails large social costs."

So the official, but misleading unemployment rate, is now, for example, being cited as the key indicator of a recovering economy. Many people who have been unemployed for a long period, say one year, may find themselves unaided by any such recovery, however.

One explanation floating around is that there is a stigma associated with certain kinds of work, so relatively few want to pursue these fields, like manufacturing.

"Today in the U.S., there is a bias against jobs in the manufacturing environment. We need to create an environment of respect around skilled technical work. We need to  make people aware of what the Commerce Department reported in 2011: people in STEM fields—that is, science, technology, engineering and math fields—can expect to earn 26% more on average and be less likely to experience job loss than non-STEM occupations." (Source: Mainstreet) We should also, however, consider how technologically advanced a country's manufacturing base really is. In the case of Germany, manufacturing is considered a high-tech industry. Companies like Seimens have advanced apprenticeship programs and technical training which enable their newer as well as there experienced employees to add more significant value to the manufacturing process. In the U.S., manufacturing is generally perceived to be far less technical than so-called Silicon Valley-like businesses.  

It may be true that the vision of one's future job can be idealistic, with a personal office, and parking space in a modern building with handsome meeting rooms, using the latest information technology. Not too many employees dream of working on an assembly line or in a steel mill, and yet manufacturing is a huge part of the national economy.

Another startling employment trend is that there is a surplus of computer jobs, and a scarcity of IT and programming talent. Apparently there are more open positions in this field than there are new computer science graduates. Ironically, many computer programmers don't have college degrees at all. We know the story of Bill Gates, for example, who famously dropped out of Harvard University as did Facebook Founder Mark Zuckerberg. The path to success in the computing industry can be twisted indeed. Musicians, often without so-called relevant degrees, often demonstrate a high apititude for software engineering. On the other hand, many computer science graduates have proven to be not good enough at coding to get a job as a programmer. In turn, coding skills are so important now that tech firms are using online assessment company tools like Interviewstreet which rigorously evaluate coding assignments before candidates are allowed to proceed to the next level of the interviewing process. 

While this fact may seem shocking, it really is yet another version of the persistent gap between formal education and what is required in the business world. It's easy to knock the Ivory Tower and its notion of a 'pure' academic realm, sequestered away from the evils of the business.

It may be that what our nation needs is an integration of all educational opportunities with practical employment opportunities. How long can graduates with degrees in Philosophy or Medieval Studies be churned out by our many universities without any guidance or practical skill development, only to suffer when they find out there aren't any jobs for them? After a few years of knocking around not finding what they want, they ultimately are learning that their four years or more in a university did not prepare them for a desirable career.

So what's the answer?

Once in a job, if companies could offer things like job rotation, so their employees can develop diverse skill sets, employees would be better able to take new positions in the company. They would also have a better chance of finding work later, if they experienced a job separation. If this idea sounds too radical, consider it is already being done at a very successful Brazilian company named Semco.

Time tracking would be very helpful if job rotation was being practiced. The amount of time spent by each employee on a variety of tasks could be documented carefully, in order to analyze their workload and learning, as well costing their work on various jobs and tasks.

One thing that can help us all to recover from the large swings of the national economy, is to be prepared  with a fall-back career. Unfortunately, most workers don't consider this strategy until they are in the midst of a downturn, when it's too late to wonder why we were not better prepared. Finally, another helpful tactic is to gain valuable experience volunteering at an organization that does charity, non-profit or research work that you not only value or believe in. Research has shown doing such good works can be linked with higher levels of happiness. Also, it might make a worker happier in the end if this experience bring values to their career later on. 

Image Credit: William M. Plate Jr., Public Domain

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