Employers are showing some willingness to hire—but how much and how soon are the questions.
By Michael Beygelman
The December 2009 Bureau of Labor Statistics (BLS) jobs report was anxiously awaited to determine if the previous month’s report was an indication of a recovery or an exception. December’s job report headlined a loss of 85,000 jobs, which was higher than expected by most economists, but the national unemployment rate remained unchanged at 10 percent. The largest job losses were in construction, manufacturing, and wholesale trade. Unemployment rates varied across education levels ranging from 15.3 percent for people with less than a high school diploma, to 5 percent for college (or beyond college) graduates.
The November 2009 jobs report was revised from a loss of 11,000 jobs to a gain of 4,000. However, when we consider that the number of long-term unemployed (those jobless for 27 weeks and more) continued to trend up, reaching 6.1 million in December, any positive spin on November’s upward 15,000 jobs revision is just that—insignificant. One bright spot, however, could be that temporary jobs gained 47,000 in December, and average hourly earnings did increase .03 cents per hour.
President Obama recently announced $2.3 billion in tax credits for clean energy manufacturing as a way to stimulate job growth. The Obama administration believes that the tax credits will lead to an additional $5 billion of private capital investment in the clean energy manufacturing sector, with the credits being worth up to 30 percent of the project cost. It is also estimated that the tax credits will lead to the creation of 17,000 new jobs. Employers in clean manufacturing technology will be directly impacted by the new credit. Ideal projects for the credit include the manufacture of wind, solar, and geo thermal energy equipment, as well as fuel cells, electric cars, and carbon capture and sequestration technology. There is optimism that this will allow employers to hire additional workers for these ongoing projects.
How important is job loss or gain to the end of a recession? The unemployment numbers in the recent BLS report were higher than hoped for, proving that the recovery will not come quickly, and there may still be some stumbling blocks. While unemployment numbers are one of the most visibly tracked methods, other factors like productivity, retail sales, and consumer confidence all play a role in a recovery and the general health of the economy. It is true that meaningful job creation numbers are not yet visible, but employers are starting to display an increase in demand for workers. Some organizations might be nervous to bring on permanent employees in this slow and bumpy recovery, which can make temporary or contract employees a great option for companies with an increased need for workers.
On the political scene, the Obama administration and the Democrats were dealt a major blow when Republican Scott Brown won the senate seat in Massachusetts. Brown will be the first Republican senator from Massachusetts in more than 30 years. Ironically, the defeat came one day shy of the one-year anniversary of President Obama’s swearing in as president. The President promised us “change we can believe in” throughout his campaign, so on election day Democrat Barack Obama won Massachusetts by a 26 percent margin over Republican John McCain. However, while we as a nation want to believe in change, other than extremely colorful rhetoric there has been little measurable change in the past year. This served as a backdrop for reasons leading up to Republican Brown’s long-shot victory. People in Massachusetts were disappointed over continuing high unemployment, bailouts of various industries, an out-of-control increase in federal budget deficits, and questionable provisions in the attempted health care overhaul.
However, a renewed sense of competition within our government is not necessarily a bad thing. Having one party control all aspects of the government has allowed it to become complacent and unaccountable, something that our two-party system was meant to mitigate. Almost immediately after Brown’s victory, the Obama administration began to act with a renewed sense of commitment toward addressing the real problems we hoped the administration would address when it took office.
While unemployment will not go down overnight, President Obama received a wakeup call that has resulted in a renewed sense of accountability in helping to create new American jobs. After all, the right to work is an internationally recognized human right—people have the right to work, and they may not be prevented from doing so. We need to remain hopeful that President Obama will focus on the right things, and exercises his power wisely, so we can all gain a renewed sense of optimism that every unemployed American will have a legitimate opportunity at finding gainful employment in 2010.
Michael Beygelman is SVP, business development, with Adecco Group North America. He can be reached at michael.beygelman@adeccona.com.
Recovery’s Rocky Road
