The Dirty Truth About Misleading Unemployment Statistics
It seems like everywhere you look these days, there are headlines screaming with unemployment numbers. Statistics purporting to show how many people are working or not working are thought to be an indicator of the general health of our economy. Now we all know that news organizations have a natural tendency to sensationalize things to gain ratings. They tout numbers designed to show us that things are either getting better or getting worse, depending on what flavor of news you choose to follow. Viewers of FOX News will likely get a very different picture of things than viewers of CNBC or CNN. Lately I’ve been seeing headlines with statements like “Unemployment Rates Dropping,” and “Applications for Jobless Benefits Falling” and “Employers Adding New Jobs.” The government loves to brag about their wonderful accomplishments. Presidents love to claim that things are better than they used to be, and take credit for improving our lives during their time in office. But are those statements and statistics meaningful and accurate? Do they tell the whole story?
Statistics are an interesting thing. It’s been said that you can prove or disprove just about anything with statistics depending on what your sample is, how you count things, and how you interpret the results. At the height of the most recent recession — around the end of 2009 — the U.S. Bureau of Labor Statistics reported the national unemployment rate to be around 10%. Today, that number is under 5%. That sure sounds like things have gotten better, right? But here’s the dirty truth about those numbers: they are only counting a small percentage of the actual potential workforce population. They are NOT counting people who are “underemployed” — i.e. people who have taken low-paying jobs well below their experience level just to pay their bills. They are NOT counting people who have taken part-time jobs — in some cases just a few hours a week, and usually without any benefits. And most importantly, they are NOT counting people who have been out of work for so long that they’ve become discouraged and have “given up” looking for a job altogether. For anyone in those last categories, these government statistics are a cruel joke, indeed!
Check out this 2-minute video cartoon that explains how the government arrives at their unemployment statistics. It’s both hilarious and depressing at the same time:
So, what is the “truth” about the current unemployment picture? Again, it depends on how you count things … but here’s an interesting tidbit I came across: According to the Gallup organization, 30 million Americans are either out of work or severely underemployed. Gallup defines a “good job” as one that is at least 30 hours or more per week with a company that provides a regular paycheck. Using that definition, they’ve determined that right now in the U.S., only 44% of adults age 18 and over have “good jobs.” They go on to say that in order to restore America’s middle class, the target for this should be at least 50%, with 10 million new good jobs.
Elsewhere, AP reported that last month U.S. employers added 223,000 jobs, but despite widespread job growth, overall there is a shrinking workforce. As as recruiter, I can certainly attest to the fact that in almost every specialized job category, there are more job openings than there are qualified candidates! I keep hearing the term “Talent War.” Among my peers in the staffing industry, there is a widespread feeling that qualified talent is getting harder and harder to find in almost every category.
One of the most obvious explanations for this growing talent shortage is simple demographics. In 2011, the oldest of the Baby Boomers (people born between 1946 and 1964) started turning 65 — the traditional retirement age. Of course more and more people now expect to keep working past the age of 65 … but sooner or later just about everyone reaches an age where full-time work is no longer a desirable option. We are now seeing the beginning of a mass retirement movement unprecedented in American history – a radical demographic shift in the makeup of our work force. All told, there are about 76 million people in that Boomer generation who will, over the next couple of decades, drop out of the work force. By contrast, there are only about 51 million “Generation X’ers” (people born between 1965 and 1976) who could potentially step into all those higher level jobs that the Boomers are retiring from. That leaves a huge talent deficit: at least 25 million fewer potential experienced workers!!!
OK — so what does this all mean to the average job-seeker? Honestly, not much. It’s really mostly just background noise. For anyone in job-seeking mode, my advice is to take most of what you see and hear in the news with a grain of salt and just concentrate on the basics of job-seeking strategies as expounded in the numerous articles here in Recruiter Musings. Work on your résumé, work on your elevator pitch, work on your interview presentation, and most importantly, concentrate on the activities that will get you in front of actual decision-makers at your target companies: “Networking, Networking, Networking!”