This year’s Labor Day is no different than the last couple of years. With the unemployment rate still high, able Americans have few reasons to celebrate. In fact, according to the Department of Labor, about 6.1 million workers have lost the jobs that they’ve had for the past three years. Of those, approximately 45% are still unemployed. Meanwhile, some of the hatched workers settled on part-time jobs and settled on lower wages. It appears that even if the economy is headed towards expansion, employees are being left behind.
Chairman Ben Bernanke of the Federal Reserve says that the current unemployment rate remains to be 2 percentage points higher than the usual. He adds that the fears of the impact long-term unemployment can do to the nation’s economy. Brain drain is likely to happen as professionals move to other countries. The number of loans taken per individual would increase, resulting in worse credit scores.
Labor Department: More Jobs Added Last Month
Luckily, Bernanke’s fears have no concrete reasons for now. August reports say that 163,000 jobs were added last month. These jobs are mostly available in the healthcare and person-care sectors. That is why even if government hiring remains slack and manufacturing firms do not open positions as healthily as the others; the healthcare and person-care sectors are growing fast enough to pick up some of the slacks.
Lending institutions are also creating more jobs as they expand. Bad credit loans have become popular alternatives and third party lenders seem to be mushrooming in every state. With every office opened, a handful of jobs are created too.
The demand for workers doing person-service jobs has also increased. Examples of these jobs would be caregivers, waiters and even home-health aides. These are jobs that aren’t easily outsourced and companies offering these prefer local employment. The Bureau of Labor Statistics says that about 545,000 jobs have been added to the person-care industry over the last two years. This contributes to the 30% net increase in employment.
Skilled and educated workers are getting good chances. These would pertain to engineers and specialized factory workers. Globalization has made hiring even more competitive and hence, resulted in better employees.
But if the figures are examined since the start of recession in 2007, it can be established that economy is slowly getting back on track. In 2007, there were two applicants hiring for one job opportunity. When the economy took on its worst turn in mid-2009, there were six unemployed in just one job opening. This year, there are 3.4 jobless workers for every vacant position. So you can see that the trend is rising. However, this is not enough to curb unemployment.
Skills – Another Factor For High Unemployment Rate
According to reports, companies have also become more selective of their applicants. It appears that job openings today prefer applicants with more education than the local population has. Hence, unemployment is higher in metro areas because these are melting pots of all people from all walks of life and education. Almost one-third of the current unemployment rate can be attributed to job mismatches.
Technology Has Reduced Employment Opportunities
Yet another reason for the high unemployment rate is technology. In factories, assembly jobs have been eliminated by automation. Meanwhile, offices have replaced employees with automation systems that take calls, set appointments and send reminder messages.
There could be lots of factors that could lead to the high unemployment rate but these are all dependent on the overall state of the economy. If more investors are encouraged to come in and build their own businesses, more jobs will be opened too. Remember that only 2% of the unemployment rate needs to be filled for the economy to be considered healthy for employees again.