A friend of mine shared this recent article from The Motley Fool, "3 Things Holding Back Jobs You Didn't Know About" and I wanted to pass along to our readers. With everyone clamoring for job creation by stimulus, reduction of government or some combination of the two, this article describe three reasons for unemployment that, I would venture to bet, few are considering when searching for a solution.
1. Clingers“Think of the jobs market as a conveyor belt. People start on one end in menial jobs, and then move on to better things, making room for younger generations who jump on the belt and take up menial jobs, eventually going on to become supervisors, managers, entrepreneurs, so on and so forth… If you have a job, you're clinging to it for dear life. Part of this is out of necessity: There simply aren't many new job opportunities to pursue. But a good part of it is pure fear... The focus isn't on getting ahead; it's on making sure you don't fall behind. Not a good recipe for growth.”
2. Should-be retirees“At the end of the jobs conveyor belt, older workers retire, making way for younger generations to fill their old positions… Today, that's happening at a much slower pace than it did in the past. There could be a few reasons for this. People are living longer, for one. Pensions are becoming scarcer, being replaced by woefully inadequate private savings accounts… Regardless of the reason, more older folks staying in the workforce hurts the prospects of younger workers trying to move up. The economy needs to add about 100,000 jobs a month just to keep up with population growth. Anything less, and the unemployment rate rises.”
3. A handful of awful states“If you remove just three states with the worst unemployment (California, Nevada, and Michigan), the overall unemployment rate for the remaining 47 states drops by half a percentage point. So one-eighth of our employment gap is attributable to just three states. Sure, this is basically just saying that if you ignore what's bad, things looks better. But it highlights an important point: Unemployment is far, far worse in some states than in others. The unemployment rate for the 10 worst states is over 11%. In the 10 best, it's 5.8%. North Dakota's unemployment rate is just 3.5%. What do states with the highest unemployment have in common? They were deeply reliant on one big industry.”
So it appears we have psychologically-driven paralysis, deep effects of the financial crisis modifying well-laid plans and proof of why we should all be working to diversify our economies.