American confidence in the economy, as measured by Gallup’s Economic Confidence Index, has taken another hit this week. At the end of July, we saw a gradual, downward slide, to stand at -14, a 10-month low for the index. Despite a slight increase in early August, recent world news has pushed us back to -14.
While many blame economic conditions in China, Greece and other countries, closer to home the employment market has not inspired much confidence in Americans either.
It is to be seen how the way ahead goes as more tasks performed by humans today will be performed by machines or at cheaper global locations instead. This could leave low- and middle-skilled American workers with few job prospects. Numerous studies demonstrate the rapidly growing number of contingent workers and freelancers, yet no definitive study can break down those numbers between those who pursue temporary work out of necessity rather than preference.
Of greater concern is the number of Americans over 16 years of age who are not in the workforce. According to the Bureau of Labor Statistics, in July nearly 94 million potential workers did not participate, a 38-year record low. These individuals did not have a job and were not looking for one.
America has a lot of 20-something youngsters who are ‘neither employed, nor in education/training’, dubbed as NEETs by social scientists and bureaucrats. According to a Report from the Organisation for Economic Co-operation and Development (OECD), there are roughly 39 million NEETs in 33 of the world’s advanced industrial countries. Nearly half of them are not even looking for work, feeling hopeless and purposeless. These millions generally postpone marriage, children and home-buying. Many of them are burdened with heavy student loans. Circumstances rather than personal failure have put them in such a disengaged position, and their inability to find work has in many cases tagged as unemployable.
A critical look at the labor force gains and losses from 2005 to 2015 makes one thing very clear. While it is difficult to claim that the reductions in the number of unemployed and part-time employed are proof positive that employment has increased; there is no doubt at all that the number of persons ‘Not in Labor Force’ has been seeing a steady increase, with 1.0 to 2.8 million people being added to swell their numbers.
Another disturbing statistic from the BLS is the growing number of individuals who are working multiple part-time jobs. Nearly 2 million workers fall into this category, a 10% increase over the number in July of 2014. One can conclude that a large percentage of these workers seek multiple positions because they are unable to secure a single, full-time position.
Undoubtedly, the U.S. joins other countries around the globe experiencing shortages in certain occupations, particularly healthcare, IT, and engineering positions. This disconnect between available resources and desired skills has been addressed in prior blogs. This is another challenge that must be taken into consideration in all plans to improve America’s employment picture, as advances in engineering and IT create additional, lower skilled jobs.
While the facts presented in this blog may appear to present fairly bleak prospects for the future, there are positive factors as well. These will be addressed in an upcoming blog. In the meantime, please share your thoughts on what can be done to improve prospects for American workers. Better yet, encourage others to join in the conversation.
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