CNNMoney.com: "Jobs post biggest drop in 5 years"

[cumhail]

Jobs post biggest drop in 5 years

Report much weaker than expected. Unemployment rate declines, but that's because there's fewer people in the work force.

By Chris Isidore, CNNMoney.com
Last Updated: March 7, 2008: 8:55 AM EST

NEW YORK (CNNMoney.com) -- Employers made their deepest cut in staffing in in almost five years in February, according to a closely watched government report Friday that showed the labor market far weaker than expected, fueling already building recession fears.

There was a net loss of 63,000 jobs, according to the Labor Department, which is the biggest decline since March 2003 and weaker than the revised 22,000 job loss reported for January. Economists surveyed by Briefing.com had forecast a gain of 25,000 jobs in the most recent reading.

The job loss was widespread, reaching beyond the battered construction sector, which lost 39,000 and manufacturing, where job losses hit 52,000. Retailers cut 34,000 jobs, while business and professional services cut 20,000 jobs.

Temporary staffing firms cut nearly 28,000 jobs off their payrolls, another warning sign of employers pulling back, and hotels cut about 4,000 jobs, a sign that discretionary consumer spending could be on the wane.

Overall the private sector cut 101,000 jobs, with only a gain in government employment limiting losses.

Despite the job loss, the unemployment improved to 4.8% from the 4.9% reading in January. Economists had forecast the unemployment rate would rise to 5%. The rate fell because of a big jump in the number of people that the government counted as no longer in the labor force.

The labor market has weakened significantly in recent months, prompting fears of recession along with a $170 billion economic stimulus package and a series of interest rate cuts from the Federal Reserve.

The Fed is next set to meet March 18 to consider what to do with interest rates. Friday's report would seem to suggest more rate cuts are on the way, despite the improved unemployment rate.

What I found just as troubling as the loss of jobs is the fact that is pointed out in subtitle of the article. Every time a large enough group of unemployed workers' benefits runs out, we hear from people who would use a drop in the unemployment rate as an indicator of an improved and/or improving economy. But if the jobless rate is increasing, how is it a good thing that less people are claiming unemployment benefits? And does any of this take underemployment into account?

Oh, we'll hear from some of our forum regulars that jobs are out there and that people are just unwilling to work the ones that are available. And these, for the most part, are the ones who are quickest to bemoan any sort of government assistance programs (up to and including, in some cases, unemployment insurance... especially when talks of extensions comes into play). But do they have any great ideas on how one is supposed to pay rent, let alone a mortgage, flipping burgers at McDonalds? Any suggestions on how to pay for the gas needed, let alone a car payment, to get to their jobs greeting customers at Walmart and still have enough for their other expenses?

They're all for government incentives to assist oil companies that somehow manage to set and break record profits with each passing quarter... but get enraged at the thought of poor people collecting welfare. They'll get behind giving a bailout to the banking industries, even in spite of today's news that the CEO's of failing mortgage lenders made many millions while their companies lost even more millions... but will practically go into seizures at news that assistance will go to some borrowers (though in fairness, I'll add that I'm not in favor of either of these two).

And the justifications they'll use? They'll say that it's ridiculous to spend money assisting people who were irresponsible with their finances... though apparently it's fine to assist corporations that have been. They'll tell us that it's a more effective stimulus to the economy to assist the industries than to assist individuals with their needs... Well how well has that been working out this past decade or so?

Anyhow... at this point, my comments are longer than the article I quoted; so I'll shut up now. But this kind of news, coming out day after day, just never ceases to make me sick.

 

[theeedude]

That sucks, but I got a new job with a huge raise in February

 

[Slew Foot]

I got a new job with a fat raise that starts in August

 

[Genx87]

Saw a ~30% increase in wages from my new job I started last December.

 

[theeedude]

You almost have to get big raises now with the dollar falling as it is.

 

[sportage]

I don?t think they count folks who's unem benefits ended, and still have no job.
They become invisible.

 

[Genx87]

Originally posted by: sportage
I don?t think they count folks who's unem benefits ended, and still have no job.
They become invisible.

They dont count people who arent actively looking for jobs and rightfully so. It is a measure of our labor market. If people arent looking for a job, they arent part of the labor market.

 

[SSSnail]

Should I add the + 2.2 mil foreclosures to the rosy picture too?

 

[WhipperSnapper]

To those of you getting big raises and/or new jobs--what fields do you work in and how much experience do you have in your field? Why do you think your employers are willing to pay you more or hire you and not just hire new college grads (or folks who are qualified but have been rendered unemployable as a result of being unemployed or underemployed-out-of-field for too long)?

 

[charrison]

Originally posted by: WhipperSnapper

To those of you getting big raises and/or new jobs--what fields do you work in and how much experience do you have in your field? Why do you think your employers are willing to pay you more or hire you and not just hire new college grads (or folks who are qualified but have been rendered unemployable as a result of being unemployed or underemployed-out-of-field for too long)?

College grads a cheap, but they also lack experience. If you have a college degree, you belong to a group of people that has a 3% unemployment rate.

 

[Rainsford]

Originally posted by: SSSnail
Should I add the + 2.2 mil foreclosures to the rosy picture too?

Honestly, I'd just take the cyanide capsule now.

 

[Rainsford]

Originally posted by: charrison

Originally posted by: WhipperSnapper

To those of you getting big raises and/or new jobs--what fields do you work in and how much experience do you have in your field? Why do you think your employers are willing to pay you more or hire you and not just hire new college grads (or folks who are qualified but have been rendered unemployable as a result of being unemployed or underemployed-out-of-field for too long)?

College grads a cheap, but they also lack experience. If you a college degree, you below to a group of people that has about a 3% unemployment.

Are you drunk or something?

I think that charrison is trying to say is that being employable isn't about having some piece of paper as often as it is about knowing what the hell you're doing and having some experience doing it. If you're skilled at all in your field, the point is that while your employer could hire a new college grad, they can't hire a new college grad to do your job. He could sit at your desk and answer your phone and get assigned your tasks, but he's not going to be able to perform them worth a damn.

 

[WhipperSnapper]

Originally posted by: Rainsford

I think that charrison is trying to say is that being employable isn't about having some piece of paper as often as it is about knowing what the hell you're doing and having some experience doing it. If you're skilled at all in your field, the point is that while your employer could hire a new college grad, they can't hire a new college grad to do your job. He could sit at your desk and answer your phone and get assigned your tasks, but he's not going to be able to perform them worth a damn.

Right. Well, newbies can always be trained, even those who've been involuntarily-out-of-field. The point I'm trying to get across is that many of the people who are getting new jobs and raises might be protected from the greater economy by having the barrier-to-entry of experience between them and inexperienced people in their fields, which doesn't mean that there aren't lots of people who have the education needed to do to the work and who would love to work in the field, even for lower wages, but can't. So, if you can't land a job in the field soon after graduation, you might be SOL and end up unemployable in the field you trained for.

 

[Socio]

The other reason for this is under the table wage earners are continually penetrating higher level jobs, no longer doing ?jobs no one wants to do? and doing jobs many want to do but a lot cheaper.

So I am betting a percentage of those jobs are still being done they are just off the radar so to speak.

 

[charrison]

Originally posted by: Rainsford

Originally posted by: charrison

Originally posted by: WhipperSnapper

To those of you getting big raises and/or new jobs--what fields do you work in and how much experience do you have in your field? Why do you think your employers are willing to pay you more or hire you and not just hire new college grads (or folks who are qualified but have been rendered unemployable as a result of being unemployed or underemployed-out-of-field for too long)?

College grads a cheap, but they also lack experience. If you a college degree, you below to a group of people that has about a 3% unemployment.

Are you drunk or something?

I really wish i had an excuse for that post, but I dont. I must have been in a hurry or something...

 

[charrison]

Originally posted by: WhipperSnapper

Originally posted by: Rainsford

I think that charrison is trying to say is that being employable isn't about having some piece of paper as often as it is about knowing what the hell you're doing and having some experience doing it. If you're skilled at all in your field, the point is that while your employer could hire a new college grad, they can't hire a new college grad to do your job. He could sit at your desk and answer your phone and get assigned your tasks, but he's not going to be able to perform them worth a damn.

Right. Well, newbies can always be trained, even those who've been involuntarily-out-of-field. The point I'm trying to get across is that many of the people who are getting new jobs and raises might be protected from the greater economy by having the barrier-to-entry of experience between them and inexperienced people in their fields, which doesn't mean that there aren't lots of people who have the education needed to do to the work and who would love to work in the field, even for lower wages, but can't. So, if you can't land a job in the field soon after graduation, you might be SOL and end up unemployable in the field you trained for.

But that scenerio you describe is just not happening, at least not on any significant scale. The more education you have, the better you do this country as a general rule. IF you have a college degree jobs by a fairly easy to come by, if you are high school dropout, life is pretty much going to suck for you.

 

[WhipperSnapper]

Originally posted by: charrisonBut that scenerio you describe is just not happening, at least not on any significant scale. The more education you have, the better you do this country as a general rule. IF you have a college degree jobs by a fairly easy to come by, if you are high school dropout, life is pretty much going to suck for you.

But is the conventional wisdom becoming dogma? Back in the Sixties and Seventies that may well have been true, but today everyone and their brother goes to college. Consider this thought experiment:

If we double the number of engineers, will the number of jobs for engineers at currently prevailing wages also double? What if we did that for computer programmers? Ph.D. scientists? MBAs? Lawyers?

We already have oversupplies of MBAs, lawyers, and even Ph.D. scientists; they're a dime-a-dozen, and those folks have advanced degrees. Is it thus possible that the nation could suffer a large economic inefficiency as people spend time and money on college education for non-existent positions and for fields where there is an oversupply of labor?

I think it's time for us to begin questioning education. Our politicians and the media are trying to sell us on the notion that education is the solution to our nation's economic problems as opposed to having good economic policies. Sadly, Americans are guzzling the Kool-Aid; it's working.

 

[charrison]

Originally posted by: WhipperSnapper

Originally posted by: charrisonBut that scenerio you describe is just not happening, at least not on any significant scale. The more education you have, the better you do this country as a general rule. IF you have a college degree jobs by a fairly easy to come by, if you are high school dropout, life is pretty much going to suck for you.

But is the conventional wisdom becoming dogma? Back in the Sixties and Seventies that may well have been true, but today everyone and their brother goes to college. Consider this thought experiment:

If we double the number of engineers, will the number of jobs for engineers at currently prevailing wages also double? What if we did that for computer programmers? Ph.D. scientists? MBAs? Lawyers?

We already have oversupplies of MBAs, lawyers, and even Ph.D. scientists; they're a dime-a-dozen, and those folks have advanced degrees. Is it thus possible that the nation could suffer a large economic inefficiency as people spend time and money on college education for non-existent positions and for fields where there is an oversupply of labor?

I think it's time for us to begin questioning education. Our politicians and the media are trying to sell us on the notion that education is the solution to our nation's economic problems as opposed to having good economic policies. Sadly, Americans are guzzling the Kool-Aid; it's working.

Education is no guarantee for success, that has always been the case. But if you college degree, you will still enjoy much higher wages over you lifetime than someone without. You will also enjoy low unemployment rates, compared to those without degrees.

That being said, a college degree is not required for success either. There are more than a few college dropouts in the forbes 400. I also think our education system really cheats those that are not on the college track. There is severe lack of marketable skill training in our schools. Lets face it heavy equipment operators, plumbers, hvac repair, mechanics(and the list goes on) all make good money, so let such apprenticeships start freshman year in high school.

 

[Farang]

OP, your username paints a disturbing picture.

 

[cumhail]

Originally posted by: Farang
OP, your username paints a disturbing picture.

My username is from Celtic myth and legends:
http://en.wikipedia.org/wiki/Fionn_mac_Cumhaill
http://en.wikipedia.org/wiki/Cumhail

 

[Genx87]

Originally posted by: WhipperSnapper

To those of you getting big raises and/or new jobs--what fields do you work in and how much experience do you have in your field? Why do you think your employers are willing to pay you more or hire you and not just hire new college grads (or folks who are qualified but have been rendered unemployable as a result of being unemployed or underemployed-out-of-field for too long)?

Information Technology.

For the stuff I am working on they couldnt hire a college grad unless they want a disaster.
I have 7 years in the field since graduation.

College grads typically get stuck on helpdesk for 2-3 years then move up. 99% of us had to do it. And I will add it is the best education anybody can get in this field.

Qualified candidates in this field can still find jobs even in a recession. While the tech bubble of 00-02 was a horrible time. It also weeded out a lot of people not qualified for the work they were doing and set the supple\demand curves back to normal.

 

[Genx87]

Originally posted by: WhipperSnapper

Originally posted by: charrisonBut that scenerio you describe is just not happening, at least not on any significant scale. The more education you have, the better you do this country as a general rule. IF you have a college degree jobs by a fairly easy to come by, if you are high school dropout, life is pretty much going to suck for you.

But is the conventional wisdom becoming dogma? Back in the Sixties and Seventies that may well have been true, but today everyone and their brother goes to college. Consider this thought experiment:

If we double the number of engineers, will the number of jobs for engineers at currently prevailing wages also double? What if we did that for computer programmers? Ph.D. scientists? MBAs? Lawyers?

We already have oversupplies of MBAs, lawyers, and even Ph.D. scientists; they're a dime-a-dozen, and those folks have advanced degrees. Is it thus possible that the nation could suffer a large economic inefficiency as people spend time and money on college education for non-existent positions and for fields where there is an oversupply of labor?

I think it's time for us to begin questioning education. Our politicians and the media are trying to sell us on the notion that education is the solution to our nation's economic problems as opposed to having good economic policies. Sadly, Americans are guzzling the Kool-Aid; it's working.

Where are you getting this information? An oversupply of MBA's? Is that why a couple of years ago the avg salary of an MBA right out of school was 91K?

I cant say anything about Lawyers but doctors, scientists, and any other advanced degree in a technical field is definately in short supply.

 

[LegendKiller]

Originally posted by: Genx87

Originally posted by: WhipperSnapper

Originally posted by: charrisonBut that scenerio you describe is just not happening, at least not on any significant scale. The more education you have, the better you do this country as a general rule. IF you have a college degree jobs by a fairly easy to come by, if you are high school dropout, life is pretty much going to suck for you.

But is the conventional wisdom becoming dogma? Back in the Sixties and Seventies that may well have been true, but today everyone and their brother goes to college. Consider this thought experiment:

If we double the number of engineers, will the number of jobs for engineers at currently prevailing wages also double? What if we did that for computer programmers? Ph.D. scientists? MBAs? Lawyers?

We already have oversupplies of MBAs, lawyers, and even Ph.D. scientists; they're a dime-a-dozen, and those folks have advanced degrees. Is it thus possible that the nation could suffer a large economic inefficiency as people spend time and money on college education for non-existent positions and for fields where there is an oversupply of labor?

I think it's time for us to begin questioning education. Our politicians and the media are trying to sell us on the notion that education is the solution to our nation's economic problems as opposed to having good economic policies. Sadly, Americans are guzzling the Kool-Aid; it's working.

Where are you getting this information? An oversupply of MBA's? Is that why a couple of years ago the avg salary of an MBA right out of school was 91K?

I cant say anything about Lawyers but doctors, scientists, and any other advanced degree in a technical field is definately in short supply.

He has no idea what he's talking about. MBAs garner a premium, as doe PhD scientists. Lawyers on the other hand...

 

[WhipperSnapper]

Originally posted by: Genx87
Where are you getting this information? An oversupply of MBA's? Is that why a couple of years ago the avg salary of an MBA right out of school was 91K?

Average salary for those who found employment in the field. I guess I can't refer to any specific studies citing an oversupply of MBAs, but I have read articles about the field over the years. If it's true that the average salary is $91,000/year with a 99% employment rate in the field then I'll saddle up my wagon and go to B-school.

I cant say anything about Lawyers but doctors, scientists, and any other advanced degree in a technical field is definately in short supply.

Lawyers are in a tremendous oversupply and about half do not end up working in the field and many who do earn low incomes. The law schools are producing about twice as many as are needed.

Ph.D. scientists are definitely in oversupply as evidenced by the existence of poorly-paid, overworked, "gypsy scientist" postdoctoral researchers and large amounts of talk about "alternative careers for scientists" in the field. This issue has actually been acknowledged and discussed in various scientific journals. Even Science magazine (one of the most prestigious journals) reported that there were only about 49 job openings in academia for one year's crop of Physics PhDs. Yes, it is possible to produce more science PhDs than there are jobs for them. In the laboratory trenches the notion that science is a good career field is sometimes referred to as "The Myth". Now there's even an oversupply of patent lawyers--people who often have two advanced degrees--science plus law (that we could have an oversupply of people who are so well-educated must be almost unimaginable to some folks). Basically, many of those angry, disgruntled and underemployed scientists fled science for law school to make big bucks as patent lawyers and not all of them can find jobs in the field afterwards.

Doctors are doing well because the AMA and/or the government effectively limits the number of physicians that are produced. If everyone who were qualified to become doctors were able to attend medical school and become doctors, we'd have an oversupply of MDs too. Consequently, that's why getting into medical school is so competitive; folks know that they'll have excellent lives and careers as doctors compared to other fields as a result of the cap on MD production. "My father might be unemployed but I've never heard of an unemployed doctor."

So, anyway, to get back to my point, does it make economic sense to train people for fields where we already have an oversupply of qualified people? If everyone went to college would everyone be able to find a middle class job that makes use of their college education or would some people still end up working low-wage blue collar jobs and low-wage retail jobs?

Sadly, hundreds of thousands of Americans are having to confront the reality that an investment of time and money in education is not a guarantor of a middle class job nor a stable career even if they are intelligent, hard-working, and productive.

 

[WhipperSnapper]

Originally posted by: LegendKiller

He has no idea what he's talking about. MBAs garner a premium, as doe PhD scientists. Lawyers on the other hand...

Maybe I'm wrong about MBAs but I doubt it. If you can get a job that makes use of your MBA then you'll probably get paid well and we might even say that MBAs make a lot of money if we only look at the subset of MBAs who were able to find employment in the field while also ignoring the ones who ended up unemployed after age 50 and who couldn't find jobs in the field as a result of age discrimination. Do the MBAs who graduate from Podunk U really do well? Are they really better off career-wise than they were before they started B-School? I'm sure that most of the ones who come out of the top twenty business schools do well, but what about all of those graduates of lower-tiered schools? After all, they too have advanced degrees. I have a difficult time believing that the business schools either aren't producing enough or are producing just enough MBAs to meet market demand. My intuition tells me that like law school, people will also flood into the business schools in the hopes of being able to enter a field where they can have a stable and rewarding career and that the universities will be happy to take their tuition dollars and accommodate them.

As for lawyers; the ABA needs to cut the number of law schools in half since it's a huge tragedy when someone invests large amounts of money and three years worth of time studying their arses off only to discover that they can't find a job in the field and that there are too many solo practitioners to make it worthwhile for them to open up solo practices. Unlike the AMA which might work to limit the number of new doctors, the ABA does little to control lawyer overproduction.

Legend Killer, you have no idea what you're talking about with regards to Ph.D. scientists. I have an advanced degree in one of the hard sciences. I've come across articles in scientific journals and websites that explicitly discuss this issue and I've seen loads of talk about "alternative careers" and read articles about scientists fleeing the field for business school and law school. (The powers-that-be in the field like to talk about "alternative careers" to keep morale up amongst the grad students as they start to discover the reality of careers in science.) If we don't have an oversupply of Ph.D. scientists then why would anyone want to work as a postdoctorate researcher (60+ hours/week for about $30,000/year on a two or three year gig) instead of working as an assistant professor or an industrial researcher? I've known and met lots of American postdocs so I know that they exist and I'm very much aware of their plight; some find good jobs afterwards and others move on to the next postdoc.

<Edit> A Google search for "MBAs are a dime a dozen" and "unemployed MBAs" returned a number of results.