Changing Work Patterns – Is the Unemployment Rate Really That Bad?
Business Insider featured a chart this morning that showed that the economic recovery still isn’t providing enough jobs, and that the employment part of the recovery is lagging far behind other post-recession periods in the past.
The information comes from Calculated Risk, which has been tracking economic statistics for a long time.
This shows that a lot of people have not gone back to work after the recession, no matter what anyone has said.
Another chart from Calculated Risk also shows a similar trend. These charts are valuable, because they cover information over a long period of time. The job loss chart compares recessions and recoveries going back to World War II.
This chart shows how many people as a percentage of the population are part of the labor force (i.e. employed people and those who are able to work). These charts don’t count people who are disabled, or who are over age 65 (or children).
Fewer people are working now as a percentage of the population who are able to work than in a long time. The last time the ratio of employed people dipped below 59% was January, 1982.
Looking way back into the 1960s on the chart, the participation level was also far below 59%. Most people know why that was so. There were many more married couples at that time, and many more stay-at-home moms. The sharp upward swing in the employment-population ratio (the black line) is all the women going to work.
Now, who has lost jobs in the most recent recession, and who has gone back to work?
First, there are a lot of long-term unemployed people out there. Calculated Risk also tracks how many people have been unemployed for more than 26 weeks (6 months) over time.
This shows that there really are a lot more people who have lost their jobs, and who haven’t found new ones, than in any of the previous recessionary periods. Even if this chart was adjusted to reflect these numbers as a percentage of the population, there would still be a lot more people unemployed for a lot longer period of time after this recession than after previous recession periods.
There are other signs of some type of recovery, however. First, the ISM (Institute for Supply Management) Index, which tracks non-manufacturing orders for goods and services, was up sharply in December, to a rate that indicates an expanding economy, not a shrinking one.
Second, Trulia, the online real estate data service, showed that asking prices for homes had increased by 5% in December, a big increase over the 4.3% drop that occurred in December, 2011.
If you are starting a business and looking to hire people, this is good news. It means there’s a “buyer’s market” out there for good employees. However, it may be difficult to attract people who have steady jobs. People are still reluctant to take risks and want to make sure they hold on to their jobs. If people have been out of work, however, they are ready, willing and able to get back to work. They are likely to work harder and be more committed to their jobs.
Most of all, these numbers show a great deal of change, and a big shift in who works, and how our economy works. I already know that many of my students are eager to work at good jobs, and that many of them work in part-time food service and retail jobs. These jobs are a start in the working life for just about everybody, and they have been for decades. As people mature, however, they are ready for more responsibility, and are able to handle full-time work and develop careers.
As you really get started with your business, these statistics are important in terms of marketing and understanding your place in the market. The U.S. Census Bureau has a fantastic resource in its Business Dynamics Statistics database. This is a cooperative, collaborative program that includes state, local, and private information about business start-ups and operation, as well as a wealth of other business-related statistics, such as labor force information and economic growth. Just one of their excellent reports covers the role that start-up businesses played in helping more people stay on the job during the recession, and afterward. The economy in the United States has 6 million establishments that employ at least one person. In 2010, 394,000 new businesses created 2.3 million new jobs. Unfortunately, closures and layoffs meant that during the same period, established businesses eliminated over 4 million jobs, resulting in a loss of 1.8 million jobs over the year.
Part of these trends include people retiring; for example, business owners who are selling and closing their businesses. Another part is larger companies who closed locations and consolidated divisions, across all industries. Yet another part is the devastation in the real estate market that will take a long time to sort out. Smart entrepreneurs will look for opportunities in these changes and shifts. As people retire, they will leave the market for big purchases typically associated with growing families, but will enter the market for smaller ones, especially ones associated with leisure and recreation. What things will retirees enjoy? The “Baby Boomers” who retired last year are living longer, and are healthier and more active, than ever before. I’ve done a number of business plans for long term health care-related businesses, and I know the healthcare needs of the older population in the U.S. and Canada fairly well.
But what about the other needs and interests of people who are retiring? Some may want to establish small businesses that fulfill lifelong interests and dreams. Others may want to spend time traveling or pursuing interests like Tamae Watanabe, age 76, who became the oldest woman to climb Mount Everest this past May.
Retired Coors marketing manager Cinde J. Dolphin launched Marketing for Mavericks, which produces unique online marketing content and helps businesses like wineries reach their markets through social media. I think Cinde gets to visit awesome wineries and make videos for them, then helps them build social networks to develop customer loyalty. I can deal with that job.
If you’re retired and going “stir crazy,” I highly recommend the SBA resources for 50+ entrepreneurs. These are free and will give you lots of inspiration and guidance. If your pre-retirement career was very focused, and you didn’t work with payroll, receivables and payables, and possibly didn’t fire or hire, or, if you were accustomed to managing budgets — but not doing everything start-to-finish, these SBA programs are fantastic. Once you are ready to get going, contact Pacific Human Capital. We can get you started quickly and put everything into focus.