Gordon Report, May 2016
Behind the Employment Numbers
The U.S. Employment and Talent Situation
As the current state of the U.S. job market is a central
focus of the Gordon Report, attached we present our extrapolation of figures
from the U3 Unemployment Report from the Bureau of Labor Statistics (BLS) and
the A38 "Not in the Labor Force" data from the Current Population
Survey of the Census Bureau.
Our estimate of "Low Skilled, Weak Work Ethic, and
Badly Educated" people is derived from reports issues by the Organization
for Economic Co-operation and Development, and data from the National
Assessment of Adult Literacy and the National Assessment of Educational
Progress, both conducted by the U.S. Department of Education.
In short, the official April U.S. unemployment rate (U3) is
5 percent and shows 7.9 million Americans looking for a job. The broadest BLS
measure of unemployment (U6) that includes persons marginally attached to the
labor force raises the rate to 9.7 percent. However, combining the U3 and A38
which gives us a broader view of the U.S. labor market, we conclude that about
28 million Americans could potentially joint the labor force, which would then
yield a 17.55 percent unemployment rate. (See attachment.)
The number of jobs filled, the labor participation rate. and
worker productivity have declined. This recent fluctuation can at least
partially be attributed to rising political instability. Regarding
productivity, while organizations have been hiring in 2016, most offer their
workers little or no training to fill in worker skill gaps. Thus, the
skills-job disconnect continues to hurt the U.S. economy. More employers need
to recognize the interrelationships of the "three "Ps" in a
knowledge-driven workplace -- that employee training can raise not only
productivity, but also performance and profit.
Understanding the Talent Crisis
The Spring 2016 issue of Employment Relations Today
(Wiley Periodicals) includes my White Paper, "Understanding the
Talent-Creation Crisis." Its aim is to offer a better analysis of the
broad range of socioeconomic forces shaping the present shortage of skilled
talent. Based on our on going research and consulting, it explores some of the
best practice public-private community initiatives for better preparing
students for in-demand jobs and careers and updating the skills of incumbent
workers. They are developing cross-sector solutions for reinventing regional
education-to-employment service-delivery systems.
Current data continues to reinforce the White Paper's key
contention that the current labor market suffers from a lack of people with the
appropriate education and career preparation for jobs in today's over $17
trillion advanced economy. An antiquated 20th-century-based education-to-employment
system is leaving too many Americans under-prepared for a more demanding
21st-century labor market.
Three 2016 reports are particularly notable. An April 2016
Conference Board report, "Help Wanted: What Looming Labor Shortages Mean
for Your Business," warns that constraints in the U.S. labor supply seem
likely to depress overall economic growth. Two occupational areas, health care
employment and skilled trade jobs, are identified as having an especially
elevated probability of facing qualified worker shortages. "The 2016
Construction Hiring and Business Outlook" of the Associated General
Contractors of America reported that 70 percent of its members are experiencing
difficulty in finding qualified workers and 69 percent expect that these shortages
will continue or get worse during 2016. The National Federation of Independent
Business February survey found that 42 percent of its respondents reported that
they had few or no qualified applicants for jobs they were seeking to fill.
Twenty-eight percent of these small business owners could not fill open
positions during this month.
The entire White Paper can be accessed on Imperial
Consulting Corporation's website. To read it click, Understanding the
Talent-Creation Crisis.
Edward E.
Gordon is president of Imperial Consulting Corporation - www.imperialcorp.com. His latest book is
Future Jobs: Solving the
Employment and Skills Crisis (Praeger, 2013), which is a 2015
Independent Publisher Book Award winner.
Broader Unemployment Rate
I. U3 Unemployment
Report (Numbers
in Thousands)
(Bureau of Labor Statistics)
1.
Available Workforce
158.9
2. Number
Unemployed 7.9
3.
Unemployment Rate 5.0%
II. A38 Not in the
Labor Force (Census Bureau)
A. Age
Levels
1.
Retirees (+55) 52,975
2.
Aged 16-55)
41,481
TOTAL
94,481
B.
Potential Labor Pool
1.
Do Not Want a Job (16-54) 37,319
2.
Wants a Job (16-55+) 5,617
3.
Discouraged Workers (15-55+) 568
TOTAL
43,504
C. Low
Skilled, Weak Work Ethic &
Badly
Educated (Estimated)
23,500
D.
Potential Trainable Workers (B – C) 20,000
E.U3
Officially Unemployed (D + E) 7,900
III. Broader Unemployment Rate
Unemployed 27.9
Available Workforce 158.9 = 17.55%
Available Workforce 158.9 = 17.55%
