Discouraged Workers
A recession can really change people’s attitudes about looking for work, and many become discouraged (PDF). Unemployment rates in South Carolina are hovering between 10 and 12 percent. But another way to look at that is 9 out of 10 people are actually working! In addition, even with high unemployment, there is still considerable churn in the market place, meaning that jobs are being filled and vacated every day.
So what is the problem? One issue is that the right work is more difficult to find, and takes more time to find, which is discouraging. Matching one’s skills to a job is challenging especially when jobs skills for work are in a constant state of flux. Unlike some employed workers, who may receive retraining assistance from their employer, the unemployed need to finance their own retraining with no guarantee of a job at the end of the training.
Another reason is that the employment picture is likely worse than reported in the media. For example, if we hold the workforce steady at April 2009 numbers, 2,185,673 persons, (people don’t just disappear) and use that number to calculate unemployment in June 2010, holding employment constant, the unemployment rate jumps to 12.2 percent not the current South Carolina adjusted rate of 10.7 percent.
As employment data is published in the coming months, it is important to keep in mind these variances:
- Where we were and where we are now,
- Whether the gap is shrinking or growing and
- The effect this has on unemployment prospects for both the employed and the unemployed.
By keeping these points in mind, we will have a better feel for the current labor situation going forward.
Unemployment and Education
Unemployment hit 12.6 percent in South Carolina this past December. I believe that was predictable, so this should not be a surprise to anyone. My question is what does unemployment look like when viewed from a different perspective, such as college graduation rates? In particular, I am interested in technical schools, since they should provide new skills, within a relatively short time horizon, needed by employers to compete.
What I found was encouraging. I used Trident Technical School (TT) graduation rates for two-year programs and the Charleston MSA, as my unemployment geography. Integrated Postsecondary Education Data System (IPEDS) provides the data for TT, with a little help from TT’s graduate page, while the BLS provides data for unemployment. Note: I gave TT the benefit of the doubt since they included multiple degrees in their data…hmmm.
My hypothesis is as unemployment increases graduations lag but also increase. The recession started in December 07. With a lag of two years, one should note more Associate Degree graduates given all other variables being constant.
TT has graduated on average ONLY three percent of enrollees (two-year programs), based on 150 percent of time to complete degree! In comparison Clemson is almost 70 percent (four-year) with other technical schools across the country graduating closer to 20 percent. The two-year degree is a subgroup of TT’s enrollment population, since others attend part-time, less than one year, night school, continuing education, etc.
The link is to the spreadsheet graph (pdf). Up front, this is insufficient data, but it does clear the “interesting” hurdle and one that may justify continued research or Moore Data! I used JMP to compile a back of the envelope model (pdf). Note the big jump from 2008 to 2009, but the model provides some hope (R-squared below .50), for this relationship. As unemployment increases, graduations are delayed but also increase! Of course there are other factors not in this analysis which affect the outcome, but this is one place to start to think about the process. If this analysis holds any shred of truth, it would suggest people are NOT waiting for the “old job” but getting after it, regardless if there is a job available or not.
One key piece of information which would assist in answering this question is the “SK” claims collected at the state level. This is an unemployment claim where the job is not expected to return, i.e. textiles. In other words, the job hunter is expected to find NEW and different employment. This analysis would point in the direction of a high number of “SK” claims. Hopefully the folks at the state are doing this analysis which would assist in predicting both educational needs and unemployment claims and more importantly, payouts, since they may be doing it for a while.
Labor Projections
BLS published the 2008-18 projections today. The Employment Projections web site has been reorganized to better present tables and technical documentation.
We need to be careful when using projections. These data are most accurate at a national level, while at the local level they are not. Projections are time sensitive, in that jobs can come or go all at once, (recession) over the period of the analysis, or in one geography and not another.
If you have questions about these data you can find more information at lovetowork.org
Labor Market: Government Stimulus Package
There has been quite a discussion about the stimulus package and jobs recovery. It is safe to say that jobs not only have not come back but current employment has gotten worse. The chart shows the State of South Carolina Current Employment Statistics (CES), 1999 – 2009. (Source: BLS)
The chart has two scales one for State and Federal workers (left, blue and red lines respectively) and private employment (right, green). Note the very slim increase in Federal employment and drop in State employment compared to the huge decrease in private sector employment over the last two years. The question is how does a stimulus package actually work to create jobs? It does not seem to be working here or is it?
Comparing to the Past: Zooming in on the 2000 dot-com bust, South Carolina lost 134,000 jobs from June 2000 to January 2002. During the current recession, employment peaked in June of 2007 and fell to a low in January of 2009, a loss of 132,000 jobs.
South Carolina Labor Market Information
South Carolina LMI
08.24.09 Resources- LMI Resource development: Source: lovetowork.org
08.25.09 OES Method Two-Tail T-Test
08.25.09 Statistics UI Variation
08.26.09 Normality
08.26.09 Box Plot Description
08.26.09 Basic Statistics Glossary
08.31.09 Alternative UI Rates
08.31.2009 Sample Design CPS
08.31.2009 Occupational Supply Demand System
