Simple Debt-Free Finance » Employment

College Grad Unemployment and Useless College Degrees.

Joe — Fri, 11 May 2012 15:03:07 +0000

The college grad unemployment or underemployment rate is currently at 53%, but is a poor economy to blame or useless college degrees?

Before we get into that question, let’s step back and take a look a closer look at the unemployment problem for recent grads.

College grad unemployment/underemployment is bad, real bad.

The news has been awash in horror stories about recent college graduates not finding work. Many more are able to find work, but not in their chosen field.

“More than half of America’s recent college graduates are either unemployed or working in a job that doesn’t require a bachelor’s degree”.

This according to the article, 53% of Recent College Grads Are Jobless or Underemployed—How? from The Atlantic.

The Atlantic (as most other sources I’ve seen) doesn’t break the number down, so it’s difficult to tell how many college grads are actually unemployed, vs. how many are considered underemployed.

This is an important question because I think it highlights a big problem in education in America today. It’s easy to point to grads who seem unwilling to take low level jobs that are available and say they’re lazy or have a sense of entitlement, and in some cases that’s certainly true, but there’s also a very real financial reason at play – namely, student loan debt.

But things are different now, and it’s a lot harder to pay off $30,000 in student loans when your working the line at a fast food restaurant.College degrees are more expensive than ever, and students have piled on the debt. There was a time when this was a smart move because the higher level of education would help you find a good paying job, and the debt was affordable over time.

This doesn’t just lead to higher college grad unemployment rates though. This also causes systemic problems in the economy since those highly educated grads are taking low skill jobs that could go to others. Those jobs would traditionally go to less educated workers.

Economy and the job market to blame or just useless degrees?

All of this sounds bad, hopelessly bad. But not all doors lead down College Grad Unemployment Row.

According to this article, Half of recent college grads underemployed or jobless, analysis says , from the AP:

“…students who graduated out of the sciences or other technical fields, such as accounting, were much less likely to be jobless or underemployed than humanities and arts graduates.”

It sounds like going to school for math and science based degrees does still pay off in the end, so this begs the big question:

Is the college grad unemployment problem because the job market stinks and the economy has fundamentally changed? or is it simply due to useless degrees?

It used to be said that going to college was simply paying your dues and doing your time for a fancy piece of paper. Cynics would say that the paper didn’t mean much, but it opened doors because so many jobs were only available to those with a college degree -any college degree.

Times have changed.

It appears that you not only need that fancy piece of paper, but you also need the skills to do the job.

Here’s another quote from that AP article:

“I don’t even know what I’m looking for,” says Michael Bledsoe, who described months of fruitless job searches as he served customers at a Seattle coffeehouse. The 23-year-old graduated in 2010 with a creative writing degree.

They don’t go into how much student loan debt Michael has, but I’d bet it’s a lot – more than he’ll be able to manage on his coffeehouse job. But what was he expecting?

What good is a creative writing degree?

Don’t get me wrong, I admire writers and creative writing is not something many people can do well. It takes a certain innate ability and creativity that can be cultivated but cannot be taught. Not everyone gets to be Stephen King.

I’d say that Michael, and others like him, would be extremely fortunate to get a job somewhere making $30,000 a year with his degree, but what do you want to bet he has that or more in student loan debt?

A simple truth that no one seems to want to discuss is that for some degrees, debt doesn’t make sense.

I ask you, what would full employment be for a graduate with a degree in creative writing and do enough such jobs exist for the number of graduates seeking employment?

As Mish points out on his blog post, 53% of New Graduates are Jobless or Underemployed; Rude Awakening for Class of 2012; Useless Degrees; Who Benefits From Student Aid?:

“Just what job does someone majoring in Political Science, English, History, Social Studies, Creative Writing, Art, etc., etc., etc., expect to get?

Arguably, graduates in those majors (and many more) should be thankful to get any job. … those who do land a job should therefore be considered fully employed, not underemployed.”

Is college education simply less valuable than in the past

I think the college grad unemployment issue raises the bigger question of whether college education is simply less valuable now than in the past.

A few years ago, I asked the question Who Are the Unemployed? The answer I found was largely those without a college degree.

But now it seems that we are seeing the effect of a bubble in college degrees.

When there were fewer graduates, a generic college degree used to be a valuable credential. Now that the market is flooded with applicants holding Bachelors degrees, those degrees count less, and specific skills count more. The result? – High college grad unemployment.

According to the Census (Educational Attainment in the United States: 2011 – Detailed Tables – U.S. Census Bureau),

“the number of Americans under the age of 25 with at least a bachelor’s degree has grown 38 percent since 2000. “

The job market has not been able to keep up with this glut in the highly educated workforce, and this has led to falling wages and college grad unemployment we see today.

Lower student loan rates are not the solution – that only encourages even more debt.

The message here is clear: parents should encourage useful college degrees, or none at all for their children.

It doesn’t take a degree to be an entrepreneur, or the next Stephen King or Picasso. Either follow your passion and make it work, or get a useful degree to fall back on. The free ride is over for college grads.

Unemployment Rate, Cities With Highest and Lowest Growth (Infographic).

Joe — Fri, 09 Sep 2011 14:15:31 +0000

We all know the economic state of the country in pretty bad, and here’s a visual representation of one factor of the economy – unemployment.

You can see that despite the rhetoric (and trillions of dollars in spending), the unemployment rate hasn’t moved much. This first graph covers the unemployment rate from the start of the recession to August, 2011. The August figure is important because it’s the first time in over 40 years that the U.S. economy produced a net 0 new jobs.

The second graphic shows major U.S. cities that are losing or gaining the most jobs. It’s important to note that this data is NOT seasonally adjusted.

All the data is from the U.S. Bureau of Labor Statistics and presented as an infographic courtesy of the folks at Visual.ly

Most Americans Feel the Same About Job Security as They Did a Year Ago. (infographic)

Joe — Wed, 30 Mar 2011 00:44:06 +0000

As you can see in this infographic, the majority of Americans polled feel as secure (or insecure) about their employment as they did a year ago.

This shouldn’t really surprise anyone since the unemployment level has stabilized. But there’s still that 1% who isn’t sure?! Who are these people? Did they have any sense of cognition, or are they simply mindless automatons shuffling through their lives on autopilot?

What I love about this graphic is that it highlights the effect of youth and education on the perception of job security. Those younger than 30 feel more secure than those over 30, which makes sense given that younger workers usually cost employers less money (so they are apt to keep them) and they have more mobility due to more recent and relevant education a skill set.

What I found surprising is that those in the 30-49 age bracket felt most insecure. I would have thought it would be the 50 and over set feeling most insecure.

Source.

How Can the NBER Claim the Great Recession is Over?

Joe — Wed, 22 Sep 2010 13:53:59 +0000

Can someone please explain this to me?

“The longest recession the country has endured since the Great Depression ended in June 2009, a group that dates the beginning and end of recessions declared Monday.”

According to The National Bureau of Economics (NBER), the recession ended last year, in June 2009. Not only does this ring hollow with near 10% unemployment and no sign of it falling any time soon, but it just doesn’t make sense when you look at the data and match it to the start and end dates given by NBER.

I understand that unemployment is a lagging indicator and it will take a while for it to come back down. I get that. But I also understood a recession as being defined by “2 or more consecutive quarters of negative GDP growth”. In other words, a shrinking economy.

But as this data shows the U.S. economy didn’t have 2 consecutive quarters of negative growth until the second half of 2008 – fully 6 months after the NBER’s claim of December 2007 as the start of the recession!

US GDP 2006-2010

However, if you look at when unemployment began to rise, it was 2007 ( data from the U.S. Bureau of Labor Statistics):

But if we’re using the unemployment rate to determine the start of recession, shouldn’t we use that to determine the end? Or, conversely, if we use GDP to determine the end, shouldn’t that be the metric for the start?

I’m really trying to reconcile this with some sort of impartial logic, but I can’t help but wonder if the reason is really political.

Paragraphs like this one from an AP article make me wonder if the dates and data are being chosen simply to place 2 recessions under one unpopular republican president:

“In President George W. Bush’s eight years in office, the United States fell into two recessions. The first started in March 2001 and ended that November. The second one started in December 2007”

Somebody tell me I’m wrong. Someone explain to me how the recession can impartially and objectively be said to have started in December 2007, and end in July of 2009, because it just doesn’t add up to me.

Why College Tuition Keeps Rising. (video)

Joe — Thu, 09 Sep 2010 09:49:41 +0000

It’s a well worn refrain by now that the cost of a college education has risen far more than the general rate of inflation for decades, but no one really talks about why.

In fact, the majority of discussion about the cost of college tuition usually focuses on increased funding, or changing student loan programs, usually under the guise of “making college more affordable” while really only driving the cost up more.

The root reason college tuition outpaces inflation year after year is because people keep paying it.

It’s largely driven by supply and demand, but it’s real cost is masked by grants, scholarships and loan programs – it’s the same reason health care costs keep rising so much faster than inflation. When the consumer is shielded from paying the direct cost, then costs rise much more quickly. It almost becomes a victimless crime.

Couple that with the fact that so many people see a college degree as essential to having a high paying job, and you see why the demand keeps increase despite the meteoric rise in costs. It’s easy to see why a college degree is viewed as essential when you look at data like this. As of August, 2010, the unemployment rate of those with a Bachelor’s degree was 4.6%, while those with less than a high school diploma had a 14% rate of unemployment!

I just put my daughter on the bus for kindergarten for the first time this week, and I can’t imagine what the cost of college is going to be when she graduates high school. Couple that with the fact that so many people will likely be entering the workforce with bachelor’s degrees by that time that she’ll likely have to get a master’s degree just to remain comparable to what her old man got with his bachelor’s and it’s not a happy thought.

Thoughts on a New Job, Money and Benefits.

Joe — Tue, 13 Jul 2010 11:22:07 +0000

Thoughts on getting a new job.

I finally got a new job!

Words alone cannot describe the sense of elation I feel. I’ve been stuck at a dead-end job now since 2008. I have had very mixed emotions about the whole situation for quite sometime. I have been extremely thankful to have a job in this recession, but I’ve also felt like my financial plans have been stuck in neutral. I knew I should be grateful that we weren’t falling behind financially, but it just felt so depressing to be getting nowhere after doing so well.

Like many who managed to avoid being laid off; I’ve had to take unpaid time off, lost my employer contribution to my 401k plan, had no raise bonus or similar salary increase.

But all that has changed.

I got a great new position at a new company in almost a new field, but it’s everything I wanted – and I know how lucky I am in this economy.

But there have been a lot of interesting remarks made by people when I tell them my news. I realized that I view things differently than others, and I thought I share some of those observations here.

Thoughts on money, benefits and what really matters.

But how much more are you making?

Believe it or not, I’m a pretty private person despite having a blog. And one of the things I’ve never felt comfortable talking about is income. It’s just one of those things that makes me feel awkward discussing with others. It’s like personal hygiene of the personal finance world.

So, I told my wife’s family about the job and her aunt asks me if I’ll be making more money. It’s a logical, common and completely expected question. It doesn’t bother me at all. But I also know she’s looking for more than a simple “yes”, but as I mentioned I don’t want to give her a dollar amount.

So, being the geek that I am, I give her a percentage.

“I’ll be making 12% more a year,” I tell her.

She just blinks and stares. “Yes, but how much is that?”

Now, I know her pretty well so I feel confident in saying that she wasn’t simply being nosey and trying to weasel my annual salary from me. She really just had no idea what to make of my response. 12% meant nothing to her.

But ask yourself, when was the last time you got a 12% raise?

The dollar amount isn’t important, it’s the percent that matters. It’s the percent that tells you how big, or how small a leap you’re taking relative to where you are, not compared to where someone else is.

How much does it pay?

I got this question from my younger cousin. Again, he wasn’t trying to be nosey, he’s just graduated high school and has no idea what real jobs pay. But the problem with this line of thinking is that salary is everything, and it’s not. It’s also about the bennies!

I support my family of four on my salary, so things like health insurance, time off and a decent 401k are important to me. More so than when I was my cousin’s age. But I think a lot of people just never get past the salary figure when considering jobs.

The other huge benefit to my new job is that I think I’m going to like it very much. And when you actually like what you do for a living, it’s a lot less like work and a lot more like living! And that’s something money can’t buy.

photo by kreg.steppe.

Reminder: Bad Credit Can Affect Your Employment.

Joe — Fri, 25 Dec 2009 12:00:05 +0000

Bankrate.com’s Steve Bucci recently answered a question from a reader about whether bad credit can hurt your job prospects.

The reader’s roommate defaulted on 2 payday loans while he was out of work (ouch!), and subsequently relocated to Washington, D.C. (debtor’s capital of the world!). He managed to get a job, but two months into it his background check came back and showed the defaults. His employer then let him go. I can’t imagine why they hired him before the background check was cleared, but that’s just me.

The reader wanted to know if this is legal and how he can clean up his mess.

The short answer is that the employer can absolutely terminate his employment for the past delinquencies – provided he was notified of that possibility. Since they did a background check on him, he was likely notified.

He made his mess, now he has to deal with the repercussions.

As for getting out of the mess, he has to get a less desirable job (that doesn’t do background checks!) and pay off the outstanding balances on his defaulted payday loans. It’s likely to be a long, tough road.

Let this be a reminder to all of us that:

Despite recent government efforts to the contrary, we are responsibly for our actions.

Payday loans are a bad, bad idea.

Check your credit history (free when using AnnualCreditReport.com) before launching a new job search.

Keep an emergency savings account in a high yield savings account to smooth that ride after a job loss.

If you have some black marks on your credit history and you are applying for a job that requires a background check, be up front and honest about it – and proactive. Explain your situation and show what steps you’re taking to correct the issues before the background check.

15 High stress, low pay jobs.

Joe — Sat, 31 Oct 2009 15:59:10 +0000

I stumbled across this a few days ago, and thought I’d share it. It’s CNN/Money’s list of 15 jobs that offer high stress, and low pay.

I’m not sure what their criteria were or how they determined the amount of stress. The low pay aspect is fairly easy to determine, each is below the median household income and most require a degree or two. But I question some like Commercial photographer. I mean, is the % who say their job is stressful really 100? There are no commercial photographers who don’t find their work to be high stress?

And what does high stress mean? I love my job. I think I have things pretty easy, compared to many. I’m in the IT field, but I still have stressful days. I suppose the best way to look at this list is that a percentage of the people who hold these jobs find the rewards do not outweigh the stress.

Still, that seems odd since Minister is also on the list. I’m not surprised they don’t make big money, but you can’t tell me their job doesn’t have moments of satisfaction that can’t be found in other careers that outweigh the stressful times.

At any rate, here’s the list. You can read more detail at the original site.

Social Worker.
Median pay: $43,200
% who say their job is stressful: 72%

Special events coordinator.
Median pay: $35,900
% who say their job is stressful: 75%

Probation officer.
Median pay: $38,400
% who say their job is stressful: 58%

News reporter.
Median pay: $32,900
% who say their job is stressful: 62%

Music ministry director.
Median pay: $40,800
% who say their job is stressful: 67%

Membership manager.
Median pay: $42,600
% who say their job is stressful: 67%

Fundraiser.
Median pay: $42,700
% who say their job is stressful: 67%

Commercial photographer.
Median pay: $43,600
% who say their job is stressful: 100%

Assisted living director.
Median pay: $46,000
% who say their job is stressful: 67%

Minister.
Median pay: $45,300
% who say their job is stressful: 71%

Marriage/family therapist.
Median pay: $44,400
% who say their job is stressful: 61%

Curator.
Median pay: $46,500
% who say their job is stressful: 89%

Substance abuse counselor.
Median pay: $32,400
% who say their job is stressful: 71%

Film/TV producer.
Median pay: $47,600
% who say their job is stressful: 78%

High school teacher.
Median pay: $43,000
% who say their job is stressful: 65%

And for those looking for the alternative, here’s a companion story detailing the 50 best jobs in America

Are You a Duck or an Eagle?

Joe — Sun, 26 Jul 2009 14:47:02 +0000

“Opportunity is missed by most people because it is dressed in overalls and looks like work.”

~ Thomas Alva Edison

I’m currently reading The One Minute Entrepreneur, The Secret to Creating and Sustaining a Successful Business by Ken Blanchard, Don Hutson And Ethan Willis.

There was a chapter that really hit home. In this chapter, the authors quote Wayne W. Dyer, “You’ll See It When You Believe It: The Way to Your Personal Transformation“:

“If you get up in the morning expecting to have a bad day, you’ll rarely disappoint yourself… Stop complaining! Differentiate yourself from your competition. Do not be a duck. Be an eagle. Ducks quack and complain. Eagles soar above the crowd”

We’ve all encountered ducks in our lives. Ducks are people who constantly complain, but never take initiative to change what they see as wrong. Chances are, you may even be a duck yourself at times.

Common Duck Sayings (or You Might Be a Duck if You Say):

“It’s not my department”

“That’s not in my job description”

“It’s our policy”

“I don’t make the rules”

“I’m just following orders”

“I just work here”

“You need to talk to my supervisor”

“I didn’t get what I needed from ___” (it may be true, but a duck will throw up his hands in defeat and leave it at that.)

“My boss is an idiot” (you’re boss may indeed be an idiot (mine is) but it should not keep you from succeeding.)

Ducks act like victims. Don’t be a duck, be an eagle.

If you’re a manager, don’t be a mallard – be an eagle. Empower your people to be eagles. Let them make decisions, and have more control in their day to day tasks. Your workers will be happier – and so will your customers!

If you’re interested in learning more, I encourage you to investigate the concept of Servant Leadership.

You might also check out 5 Ways to Identify Whiners and Winners at successsoul

Why This Hit Home For Me.

I didn’t realize until recently but the managers I’ve most respected and had the most success working with were servant leaders. Sadly, my current boss is more of an absentee, seagull boss. He is AWOL 90% of the time and at the end of a project or at review time he has a litany of items I have performed “below expectations” on.

This used to bother me. A lot. But then I realized 2 things:

1). None of my 6 previous managers ever said I was a sub-standard employee. (Why was this?)
2). I had become a duck.

The significance of #1 is that either my 6 previous managers were clueless, or my current boss is clueless. I realized that it was most likely the latter since my 6 previous bosses were highly involved in my projects – in a good way. They made it their priority to facilitate my work day. If I needed something from a different department but wasn’t getting anywhere with my inquiries, they would speak to the manager of said department and ensure I had what I needed to succeed. In short, they worked with me to provide me what I needed to achieve success. As a result, we all won. They also worked closely with me and were in a position to know if I was a sub-standard employee.

The significance of #2 is that while I can’t change my manager’s behavior, I can change my own. I decided that if my boss was going to be absent 90% of the time anyway, I would do things myself. I realized it was better to beg forgiveness, than ask for permission – especially since my boss would never get around to actually granting me permission, but would castigate me for never taking action anyway. I would eliminate him from my standard workday. Essentially, I just got pissed off at being held accountable for the failings of others, and decided to be proactive. I became a manager of others, despite the current managerial hierarchy. I feel confident this will pay off in the end. If not at this job, then at the next as it will only make me better in my field.

Eagle photo by Vivek Chugh
Ducks photo by Debbie Wogen

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Does Your Paycheck Have an Expiration Date?

Joe — Tue, 02 Jun 2009 12:27:27 +0000

Carl Clay has a paycheck with an expiration date.

Meet Carl Clay, a former medical director for a pharmaceutical communications firm. He lost his job in December of 2008 and it took him about 2-3 months to find a new job. The problem is that his new job is a temporary contract – 10 months, to be exact.

Money Magazine profiles Mr Clay in its May issue. In the profile, Clay talks about how thankful he is to have the job, but how difficult it is budgeting while knowing that it will come to an end. Which leads to my question: Does Your Paycheck Have an Expiration Date?

As a former U. S. vice presidential candidate might say, You betcha!

If we were to extrapolate far enough, we could say that just about everyone’s paycheck does indeed have an expiration date. After all, most of us will retire and some time and live the remainder of our lives off of some combination of savings, social security and pension.

This is only more true in the modern worker’s life. The average person entering the workforce today will change careers 7 times over his working life. That’s a lot of paychecks expiring.

Of course, those are cases where we end our collection of paychecks voluntarily. What about involuntary unemployment?

Job loss happens. Maybe it’s just you, maybe it’s a portion of the company’s workforce being downsized or maybe the entire company is going out of business. These things can still be planned for. Just because you can’t choose the time it might happen to you, doesn’t mean you can’t plan for it happening to you some day.

Here are some things to consider, when planning for an unexpected expiration of your paycheck:

Emergency savings.

Plan on living off this fund for 6 months or more, and you’re off to a solid start. Read more about How and Why to Start an Emergency Fund from J. D. at Get Rich Slowly.

IRA instead of a 401(k).

Many people who switch careers, often leave behind a large amount of 401(k) accounts at old employers. This creates a money management nightmare and lessons the effect of compound interest and concentration of growth. I prefer IRAs because they stick to the employee, not the employer. An IRA account exists outside any given employer, so you always have it working for you and never have to roll it over when you move on. The only real reason to favor a 401(k) over an IRA is the company match, but many companies are eliminating this so it may not even be an option anyway.

If the thought of picking a few investments out of the entire universe of the stock market (as opposed to a few offered in a 401(k) plan) seems daunting to you, keep it simple with a super boring, but super simple investment portfolio.

Stay ready for action.

Keep your job skills relevant. Chance are if you’re laid off, you won’t be alone and with extra competition for jobs you don’t want to stand out with last year’s skills.

Keep your resume polished.
No one is going to know about your cutting edge skills if you don’t have a professional, and unique resume to tell them. Here’s a post chock full of resume tips and examples from Squawkfox.

Be ready for a loss.

To prepare in advance for a layoff, live within your means. Steve wrote at MoneyNing about how he and his wife prepared for a 50% pay cut. This was because his wife was leaving the workforce to raise a child, but the concept is the same as preparing for any lost income.

Finally, FrugalDad was kind enough to share some thoughts on How To Survive A Layoff.

Loss of a job isn’t pleasant but it needn’t be disastrous. With some hard work and preparation, you can survive just about anything life throws your way, the key is being ready. Why not start today and you won’t have to worry (as much) about your paycheck expiring!

10 Up-and-Coming Outsourcing Hot Spots (It’s not where you think!)

Joe — Mon, 11 May 2009 12:41:44 +0000

Much has been written in recent years (especially election years) about corporations sending jobs overseas. China and India (A.K.A. “Chindia”) are usually the prime benefactors of outsourcing, and also the prime targets of scorn often drawn from the feelings by many that these jobs are “taken” from American workers. Yet, according to Business Week, China and India aren’t even in the top 5, and 2 are even in the U.S.!

The list:

Buenos Aires, Argentina

Winnipeg, Canada

Boise, Idaho

Indianapolis, Ind.

Belfast, United Kingdom

Cairo, Egypt

Cluj-Napoca, Romania

Hangzhou, China

Ahmedabad, India

Iloilo City, Philippines

Looking For a Summer Job? Act Now!

Joe — Tue, 05 May 2009 19:03:31 +0000

Ah spring is in the air. Or, to quote Tom Lehrer (From An Evening Wasted With Tom Lehrer … a fantastic album if you like zany musical satire..):

“Spring is here, a-suh-puh-ring is here.
Life is skittles and life is beer.
I think the loveliest time of the year is the spring.
I do, don’t you? ‘Course you do…”

Poisoning Pigeons in the Park. Great song.. but where was I? Oh yes.. spring. Well, with spring finally sprung, summer is just around the corner and if you know any teens looking for a summer job – they had better act fast!

The economic melt down is sure to make many summer jobs a thing of the past this year, but not all of them will be lost. Some jobs are simply required for a business to stay in business.

According to SnagAJob.com, 74% of employers hiring for summer positions plan to fill by the end of May!

That doesn’t leave junior a lot of time.

Here are 4 quick resources for finding summer jobs for teens:

SnagAJob.com

A very handy job search site for hourly jobs. Searches are done by zip code, but you can also sign up for email alert when a job is posted in your area. This is not just for teens, but anyone looking for an hourly wage job.

Teens4Hire.org

Unlike SnagAJob, Teens4Hire is only for teens aged 14 to 19. The downside is that I think you have to register to do any job searching, but it’s free. And they offer educational resources to help kids get jobs, and develop interview skills.

Local Government

Also check state government work sites – might as well get something for your future tax money that will be paying for the stimulus. Many local government offices require hourly workers for a variety of tasks.

Local fast food chains

I threw this one in because Five Guys burgers and a Chipotle Mexican Grill just opened new stores in my town and guess what – they’re hiring. Sure flipping burgers or waiting tables isn’t a glamorous profession, but it can be good, steady work and that means cash. Also, it’s not just fast food chains that are hiring, so look around.

Take the high road.

If all else fails, look into volunteering or unpaid internships. The experience may prove invaluable in the future! I spent a summer in my youth, volunteering at the local hospital. I won’t pretend it provided me with essential business skills, but it provided me with certain life skills that I wouldn’t have gotten at a summer job.

Who Are the Unemployed?

Joe — Fri, 05 Dec 2008 12:46:47 +0000

We’ve all heard that the unemployment rate in the U.S. is the highest it’s been since the early 1980′s, and likely to rise, but just who is it that is unemployed?

I was curious about this because I know people who have been laid off, but it certainly isn’t anything like the dot-com bubble. I work in the tech industry, so I would expect the dot-com bust to have been more pronounced. I have a suspicion that the majority of those laid off in the past 4-6 months have been from the financial services sector – investment bankers, brokers and the like – or auto workers. But alas, I am foiled. I can’t find anything that provides a break down by sector. The closest I’ve been able to find is non-farm vs. farm jobs. :-/

Anyway, I did find one thing that should reinforce the belief that education is essential in today’s economy:

Unemployment for those with less than a high school diploma in Oct. 2008 was a whopping 10.3%!

High school graduates, with no college degree: 6.3%

Some college or associate degree: 5.2%

Bachelor’s degree and higher: 3.2%

(all data from Employment status of the civilian population 25 years and over by educational attainment)

These are national averages, so the rates may be higher or lower for your specific state.

The message here is clear: Get a college education! Besides the bigger paycheck, you’ll likely experience more time employed than unemployed, all other things being equal.

Buffett U. :Warren Buffet Interview on Fox Business Channel.

Joe — Mon, 01 Dec 2008 13:41:52 +0000

Thursday, December 4th at 7:00pm (Eastern) the Fox business channel will air a Q & A session with the Oracle of Omaha, Warren Buffet. It’s all part of Buffet U., a gathering of 165 business students converging to gather whatever drops of wisdom the oracle casts off.

FoxBusiness.com has a couple of preliminary interviews with the man himself on the current market conditions and the unemployment outlook.

Follow the links below and hear Buffet on …

Why buy into market now (capitalism works over time!)

Why the economic crisis isn’t unprecedented in our country’s history.

Paulson’s TARP plan and whether it’s working.

And why he’s like girl sitting around on Saturday night.

View that interview here.

UPDATED: You can now see it here.

Unemployment and why he’s not worried about it 5 years from now, but why it will be higher than 7.5% the fed predicts for next year…

Why he’s taking the recent 40% loss in Berkshire stock in stride.

View that interview here.

UPDATED: You can now see it here.

In both interviews, Warren Buffet offers one thing that is sorely lacking in 95% of the financial coverage we are being deluged with daily: perspective.

UPDATE: Many thanks to reader Dell Berge for bringing to my attention that the original videos have been removed from Yahoo. I did some digging and found some kind souls who have preserved the videos on YouTube. I also found 2 bonus Buffet U. vids:

Warren Buffet on the auto Industry bailout:

How and why the American Auto Industry needs to change.
- Bankruptcy works, but is expensive.
- How Government can be more efficient at forcing change, and what strings he would attach.
- How the Government could turn the Big 3 bailout into a never ending money pit.

View that video here.
About the Buffet U. event itself:

Behind the scenes of Buffet U.
Who’s attending.
Why Warren Buffet decided to host Buffet U.

View that video here.

I found it interesting to see so many foreign born students attending. I also found it disheartening to see so few American born students… I wonder if foreigners have a better appreciation for capitalism these days than Americans, but that’s another post.

5 types of employment.

Joe — Tue, 11 Nov 2008 15:29:25 +0000

There are many more categories than just employed and unemployed.

It’s easy to determine whether you are fully employed, partially employed or unemployed, but are you underemployed? Or discouraged? Read on to see the details of employment vs. unemployment that most never knew existed.

Underemployment.

Underemployment is a measure of how well the labor force is being utilized with regards to their skills, experience and availability. Highly skilled workers in low wage, unskilled jobs fall into this category. Think of ex-IBM employees who are highly skilled in specific facets of IBM corporate business, but were downsized and don’t have the current skills required in the technology market place and so they end up working retail or construction. You could also count the college grad with a master’s degree in engineering who delivers your pizza, since he isn’t working to his full capability.

Discouraged Worker.

The technical definition of a discouraged worker (from Investopedia) is a person who is eligible for employment, but who hasn’t attempted to find a job “in the last four weeks.” I can understand how job searchers can feel like giving up, but how do they support themselves? I guess the trick is that they don’t. They may be stay-at-home parents or maybe staying at home with their parents! (YIKES!)

Some people point to discouraged workers as a reason why the government’s unemployment rate cannot be trusted as truly representing the real unemployment rate. However, since these people are not trying to find a job, they really shouldn’t be considered in the unemployment rate.

Full Employment.

Full employment is just as it sounds: the largest amount of skilled and unskilled workers that can be employed at any given time. It is important to note however that full employment is not 100% employment (or 0% unemployment). This is because at any given time there are workers who will be in between jobs, but still in the labor force. Economists estimate that the percentage of worker between jobs at any given time ranges from 2-7% of the workforce. This would technically put full employment at a 2-7% unemployment rate.

Natural Unemployment.

Natural unemployment is also called the “non-accelerating inflation rate of unemployment” (NAIRU). It’s essentially the lowest unemployment rate that an economy can sustain long term. Economists theorize that 100% employment would result in high inflation (more jobs than workers = higher disposable income, which means prices rise), but high unemployment means recession or a shrinking economy. Natural unemployment is the equilibrium between 100% employment and recessionary unemployment.

Structural Unemployment.

Structural unemployment results from fundamental changes in the labor market. By definition, these changes open new positions while closing previous opportunities. Jobs replaced by technology are a prime example of structural unemployment. When physical labor is replaced by technology, the worker who once performed the manual labor is out of a job, but the engineer or technician who works with the new technology has a new job opportunity.

I’m fully employed, but my wife is technically a “discouraged worker”. Not sure why she’s discouraged, but she decided to leave the paid work force to pursue the full time, all too often under-appreciated job of stay at home mom (SAHM). It’s had great benefits for our children and family life, but I for one dream of the day she once again joins the paid workforce.

photo by Amen-Ra

Simple Debt-Free Finance » Employment

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Economy and the job market to blame or just useless degrees?

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5 types of employment.

Underemployment.

Discouraged Worker.

Full Employment.

Natural Unemployment.

Structural Unemployment.

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