Sunday, September 27, 2009

Job seekers exceed job openings, imagine that

This is the greatest (of many) risks facing the current "recovery" - there just aren't any jobs. This has been an ongoing problem in the US economy since 2000, but we managed to convince ourselves that it wasn't a problem because our home values were booming and public sector (government) hiring has remained strong.

During the 2001-02 recession there were about 2 job seekers for every job opening. By the beginning of 2009 this ratio had spiked to over 4 job seekers for every job. By August of this year, the number has hit an all-time high of 6 people looking for a job for every job listing.

Look at the decline in manufacturing job openings - 47% in a year. An equally disconcerting op-ed piece in the NY Times on the future of green jobs globally.
"Right now, China is focused on low-cost manufacturing of solar, wind and batteries and building the world’s biggest market for these products. It still badly lags U.S. innovation. But research will follow the market. America’s premier solar equipment maker, Applied Materials, is about to open the world’s largest privately funded solar research facility — in Xian, China.
Instead of a strategic response, too many of our politicians are still trapped in their own dumb-as-we-wanna-be bubble, where we’re always No. 1." Yikes. Well, there may be jobs somewhere, just not in our time zone.......or within 10 hours of your time zone :)
No one has to worry about Social Security running out of money (yet) but this story about people choosing early retirement should cause concern. Not because of the strain it puts on the system, but rather because it speaks to the weakness of the labor market.
"Big job losses and a spike in early retirement claims from laid-off seniors will force Social Security to pay out more in benefits than it collects in taxes the next two years, the first time that's happened since the 1980s.
The deficits — $10 billion in 2010 and $9 billion in 2011 — won't affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. But they will add to the overall federal deficit.
Applications for retirement benefits are 23 percent higher than last year, while disability claims have risen by about 20 percent. Social Security officials had expected applications to increase from the growing number of baby boomers reaching retirement, but they didn't expect the increase to be so large.

"A lot of people who in better times would have continued working are opting to retire," said Alan J. Auerbach, an economics and law professor at the University of California, Berkeley. "If they were younger, we would call them unemployed."

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