Mother Nature as a Job Creator

There was a great video posted today at the Wall Street Journal that talks about the five fastest growing occupations in the US. You can view the video here: http://live.wsj.com/video/the-five-fastest-growing-jobs-in-america/88998944-9BFB-4972-BF56-CB6C3285F7AD.html?KEYWORDS=Fastest+growing+jobs#!FC145421-D572-46D6-A510-42A28184CE3F

It is a quick video, under five minutes, but informative. One interesting detail is how two of the top fastest growing occupations are in natural resource extraction (petroleum engineers and equipment operators).  Natural resource related industries, when growing, produce numerous employement opportunities.  However, if the price of the resource drops, then the opposite can happen. This article on gold mines from NPR (which can be found here http://www.npr.org/2013/08/21/214065337/colorado-gold-mines) shows how one mine is trying to avoid that fate, but it is helped by a favorable economic structure.

It is important that as we look to improve job creation nationally that we recognize the importance of natural resource industries as a catalyst, but always seek to diversify our growth portfolio to avoid the impact of price drops.

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Helping the Long Term Unemployed

A recent article by Matthew O'Brien at the Atlantic describes recent research by Josh Mitchell of the Urban Institute on who are the long term unemployed.  You can view the article here: http://www.theatlantic.com/business/archive/2013/08/who-are-the-long-term-unemployed/278964/

For those who are not familiar with the term, long term unemployed, it is used to define those individuals who have been out of work for more than six months. Many of them have been out of work for several years.  One of the most distressing aspects of our recent recession and current recovery has been that the number of long term employed has grown significantly and has stubbornly remained high, even as jobs are being created throughout the economy.

The demographic information shows that, as Mr. O'Brien put it, the long term unemployed "1) are a bit older, and 2) got laid off from their last job".  According to the charts, in other areas such as race and education, they are roughly similar to the wider workforce. The scene that unfolds from looking at this data is that those who are part of the long term unemployed, on average, were potentially forced out of their previous positions due to age (in manufacturing, technology, or certain service industries that prize youth) or were forced out due to lay offs in shrinking or cyclical industries (manufacturing again, construction, others).

This scenario implies that job creation could be assisted by a couple of different methods, some of which are already available.  Job re-training exists in many forms and has long been a stable of governments looking to assist constituents that have lost jobs due to structural changes in an industry.  In fact, there are special benefits to those who lost jobs due to overseas competition.  Perhaps these programs are being under marketed or under utilized?  If more people were able to be re-trained, it may help those who were laid off due to industry wide reasons find gainful employment.  However, it is very easy to say that in abstract, far different to say that to someone who has performed and mastered the same job for 25 years and may not be eager to learn or take a risk spending a few years to learn a new skill and start at the bottom of a profession.

This leads to a separate suggestion: encouraging an increase in job training tied to short term employment contracts.  These programs exist and are widespread for young people and others, often called internships and/or apprenticeships.  Companies take on interns for a limited time, and as long as its a paying internship, the intern receives revenue and job experience. This is critical for those starting out as they may rapidly realize the career they started on was not for them, or that more  education is required for them to succeed in the industry their internship was in.  Perhaps if retraining programs for those who were laid off or who were "aged off" of a job were tied to a short term employment program people would have greater willingness to try a new career and employers would have a greater risk tolerance for hiring them.  Oftentimes it is a fear of risk on both sides, employees who do not yet know exactly what they want to do and employers who do not want to hire someone with little or no experience, that keep these people out of the workforce.

By designing programs with time limited employment contracts developed to encourage employee growth and limited long term risk to companies, perhaps some of these long term unemployed can begin the process of returning to gainful employment.  As always, we welcome any and all comments on this.

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McJobs are the future?

Jordan Weissman of the Atlantic has an article up wherein he makes the following case:

"McJobs Are Probably the Future

During the recession, the economy shed millions of middle-income jobs in fields like construction and manufacturing. During the recovery, they've mostly been replaced with low-wage service work, exacerbating a trend that dates back to the turn of the century [...] the food services industry now accounts for 7.6 percent of all jobs, up from about 7 percent pre-recession, and about 6.2 percent around 2000. And, in all likelihood, they'll account for even more in the future. The BLS projects that food services will be among the fastest growing source of jobs for Americans with no more than a high school degree -- right behind retail and home health aides. So maybe working at McDonalds doesn't usually amount to a career today. But it might tomorrow."

The article deals with the issues attached to low wage service jobs and some popular conceptions regarding them (a recommended read), but this bullet stood out to me particularly.   This was mostly due to the fact that I question his assertion and partially because of how if he is correct, what does that mean for the future?  

I specifically question whether or not the number of food service jobs is really steadily increasing since 2000, or is it that its numbers have not decreased to the degree other industries has during that period.

The numbers he cites indicate that there has been almost 25% growth in jobs over the last 13 years in the food service industry.  While there has been an increase in food service businesses, its hard to believe the total number of business has increased that  much.  Additionally, that kind of expansion would have seen wages increase as demand draws employees from other, higher paying sectors.  

An alternative (and I think correct view) is that food service employment as an absolute number remained steady over time but other industries dropped dramatically. These sectors, such as construction, often employ high school educated workers, the same workers who work in the food service industry. This steady strength in food service would cause any expansion in this industry to draw employees from the collapsing sectors, which would explain the continuance of low pay in the face of any increase in demand.

What is the take away?  The take away is that Mcjobs may or may not be a career path in the future, but if we would like these jobs to pay better we need to create greater demand in other industries for the same types of workers.  Demand ultimately drives pay, and Mcjobs get away with such low pay due to underwhelming demand for these workers from other sectors. 

 

This article available online at:

http://www.theatlantic.com/business/archive/2013/07/mcjobs-are-the-future-why-you-should-care-what-fast-food-workers-earn/277863/ 

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Welcome to the Job Creator Spotlight!  I hope you are coming here because you are as driven as we are by the question of our day:  How do we create jobs? 

This website, by analyzing current job creation news and commentary as well as periodically meeting with actual Job Creators, will attempt to help you find that answer.

I hope you stay with us throughout this journey!

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