Every week in the news, we are bombarded with more economic statistics. One week, the unemployment percentage looks favorable. The following week, more people are filing for unemployment claims than was anticipated. One month the manufacturing index signaling growth ticks upwards; the next month it dips downwards.
Productivity goes up; productivity goes down. The reported inflation numbers show that inflation is negligible, yet my food bill is significantly higher than it was a year ago.
What are we to make of all these confusing statistics? What do they mean? How are you impacted by them?
For the next several weeks, I’d like to identify an individual economic statistic, define it for you, and let you know how I (as a business owner) use it in terms of making business decisions.
This week, let’s focus on unemployment numbers.
The unemployment rate is a measure of the prevalence of unemployment and is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force. I went to the US Deptartment of Labor Bureau of Labor Statistics site and their May 1, 2013 posting said this: “Gross job gains decreased and gross job losses increased from June 2012 to September 2012”.
I think this is a roundabout way of saying that the amount of people that have jobs decreased from June 2012 to September 2012.
What the unemployment statistic doesn’t take into account is that people are moving out of the work force. Some are losing hope and quitting the job search; people are retiring (some feel they have no option but to take early retirement); others are moving from full-time to part-time; some are taking jobs at lesser pay (the so-called underemployed); some are on disability.
This is called hidden unemployment and many believe this is a huge problem in the US and our unofficial published unemployment statistics are much higher. Some published sites (Shadow Stats) believe that unemployment is well north of 10%.
The Human Element:
We all know someone who has been unemployed – either for a short period or for an extended period. The human pain cannot be quantified. Underlying these statistics are real people who are experiencing real hardship and economic restraints.
Here at TranzAct, a talented man left in January for his dream job. He worked with us in customer service and he wanted a job in internet marketing (we didn’t have any open positions in that area). He was at his new job for 4 weeks and was terminated in a mass lay-off. As of this date, he is interviewing but does not yet have a job.
I have a close friend who has been out of full-time work for two years - taking odd jobs here and there but nothing sustainable. She is very discouraged and does not have much hope for her economic future.
Haven’t we all seen the pictures from the 1930’s of the lines of unemployed people outside soup kitchens waiting just for something to eat? Could this again be a reality in our country? It’s a frightening concept and hard pill-to-swallow after we got used to the economic booms in previous decades. Some would argue that we’re currently in an economic correction - but what about before we’re finally corrected?
What unemployment means to me:
When unemployment is high, we have more applicants vying for the same job. We can find employees with skill sets we are looking for. We can be more patient in taking the time to find a qualified associate.
When unemployment is low, we may not be able to find an individual with the exact skill set we are looking for. We may have to hire individuals and train them in the skill sets we are looking for. The hiring cycle is much shorter, as a potential candidate may be talking to several interested companies. Simultaneously; if you wait to
make an offer, they may take another job.
What this means for job-seekers:
Just as the mantra in purchasing real estate is “Location, Location, Location”, my advice in finding a job is to select the right company. What does this mean? Look for a company which values its associates. Look for a company which values associates just like it values its customers. Look for a company which invests in its associates.
The bottom line is that there is hope! Get creative. A close friend of ours just landed his dream job by taking a few days off of work to attend a conference here in Chicago where his dream company had a booth. He invested in the travel and time to meet these people face-to-face. Just a few weeks later, he nailed the job and moved to Austin.
More Advice: Go above and beyond what most job-hunters are doing (sitting on their computers sending out virtual resumes). Use your network, call friends and relatives.
This is all a cycle our country and many others have gone through before. Hold tight and know that it will, in deed, get better.