May Unemployment Data Confirms Slow Job Growth – AnalysisVW Staff
Unemployment changed very little in May according to a Bureau of Labor Statistics summary released on Friday. Overall, the changes in unemployment were minor in the United States. Nationwide unemployment increased by .01% over April numbers, up from 8.1% in April to 8.2% in May.
The somber outlook portrayed by last month’s unemployment discouraging, and points to a slowing economy that does nothing to revitalize the economy. In May, rates of unemployment went down slightly (down 0.3%) for people ages 16-19, and for people with a bachelors degree or higher (-0.1%). Many other demographic categories had little or no change from last month.
The sector breakdown indicates that some non-farm sectors decreased, while some increased. Many sectors have been shedding jobs for moths (government positions, leisure and hospitality, and information providers) and some sectors are recently shedding jobs as a result of the prolonged recovery.
Total non-farm positions grew in May by only 69,000 jobs. Mining and logging, and construction sectors were hardest hit, decreasing by 15,000 and 28,000, respectively, followed closely by government positions, which have decreased by 13,000 over April. Government positions have generally been decreasing each moth, as the government tries to shed excess positions to decrease the looming budget deficit.
The private sector fared the best in April by adding more jobs this moth after declining briefly in April. Education and health services led the private sector with the strongest increase in positions (+46,000), with temporary help services (+9,200 jobs) trailing far behind.
Although many of these figures are still lower than year-ago figures, we still see staggering unemployment, even after years of macro policy put in place to encourage job creation. The number of long-term unemployed people increased this month from 5.1 to 5.4 million people. Overall, long-term unemployment makes up 42.8% of the current population without work.
Average weekly working hours and average weekly earnings stayed flat, following the trend for the past months. The number of discouraged workers increased this month at a slower rate than last month, but May brought an additional 830,000 discouraged workers out of the labor force (not seasonally adjusted).
Many aspects of unemployment are troubling, but two numbers we should pay particular attention to is long-term unemployment (over 27 weeks) and the number of discouraged workers. Discouraged workers, people that believe there are no jobs for them so they stop working, are usually people that have previously been underemployed or marginally employed, decreasing their skill set.
As with long-term unemployment, discouraged workers (and underemployed and marginally employed workers) are usually pushed to the periphery when it comes to hiring due to the lack of up-to-date skills and experience. According to a Gallup Wellbeing survey released in July 2011, the higher a persons’ educational achievement, the less likely they are to rate their life as “Thriving” when underemployed compared to people with less education. The difference between employed and underemployed that rate their lives as “thriving” increases with education. Workers with some college, vocational school, or technical training have a 10% difference, while workers with a college or postgraduate degree has a 17% difference.
The Wellbeing poll illustrates the resounding impact on quality of life that underemployment (or consequential long-term unemployment or marginal employment) takes on the workers. The poll indicates that people who are underemployed and are midway through their career are more likely to be negatively impacted by underemployment than those who are just starting out or closer to retirement.
Overall, the significance of underemployment shows that the higher the educational attainment—and in turn the more money invested—the more likely people are to rate their lives as “struggling” or “suffering”, instead of “thriving”. As the price tag on college degrees increases, the emphasis on employment increases, as does the number differentiating between the amount of people that rate their lives as “thriving”.
Gallup uses categories to gauge how American’s view their lives: Thriving, struggling, or suffering. These categorizations depend on how they rate their lives now and five years into the future based on the Cantril Self-Anchoring Striving Scale. The scale is numbered 0-10, with those who rate themselves a 7 or higher as thriving.
Thriving — wellbeing that is strong, consistent, and progressing. These respondents have positive views of their present life situation (7+) and have positive views of the next five years (8+). They report significantly fewer health problems, fewer sick days, less worry, stress, sadness, anger, and more happiness, enjoyment, interest, and respect.
Struggling — wellbeing that is moderate or inconsistent. These respondents have moderate views of their present life situation OR moderate OR negative views of their future. They are either struggling in the present, or expect to struggle in the future. They report more daily stress and worry about money than the “thriving” respondents, and more than double the amount of sick days. They are more likely to smoke, and are less likely to eat healthy.
Suffering — wellbeing that is at high risk. These respondents have poor ratings of their current life situation (4 and below) AND negative views of the next five years (4 and below). They are more likely to report lacking the basics of food and shelter, more likely to have physical pain, a lot of stress, worry, sadness, and anger. They have less access to health insurance and care, and more than double the disease burden, in comparison to “thriving” respondents.