According to Federal Reserve Chairman, Ben Bernanke, more than 40% of unemployed people have been unemployed for 6 months or longer and that it may take a long time for those individuals to return to "normal" working conditions (60 Minutes Interview - 12/5/2010 http://bit.ly/fH0hrZ). I offer this statistic not as a de-motivator, but as a reality check for both individuals and employers.
The 60 Minutes interview link above is worth a watch - it's about 14+ minutes in total, but was very enlightening and apparently rare. Bernanke seems to share expert information to the wide public in the hopes of educating and persuading. He makes us aware of some facts that seem germane to decision making for individuals and businesses and it also seems he's working to persuade the nay-sayers of his recent policy actions to see the economic situation more broadly and more long-term.
For individuals, particularly the unemployed, this report highlights the harsh reality of the overall state of employment or unemployment in the U.S. Highlights includes such fact as:
- 9.9% or greater unemployment rate for 16 months
- Unemployment rate not going down - same as mid-2009
- 8.5 million lost jobs from the peak of the downturn to the end of 2009; only 1 million jobs back since that time, not accounting for new employees entering the workforce
- Prediction that it could take 4-5 years to return to a 5-6% unemployment rate
Another assertion Bernanke makes is that individuals unemployed for longer periods of time can experience skill erosion and diminished attachment to the labor market. So the picture this all produces for the job seeker today is that it's imperative to have a thoughtful and long-term job search plan. To keep from the pitfalls, job seekers should plan for a longer than usual search. It was once thought that for every $10,000 of needed income it would take one (1) month of search - that's probably increased some, so keeping connected to job service organization, volunteer opportunities and other networks will mitigate the skill erosion and labor market detachment.
Remarks I think were more directed to business were Bernanke's assessment that the primary source of risk for another economic slowdown are related to unemployment. He states that if we continue to have high unemployment over a protracted period it could send us in the wrong direction. This seemed to be a call to action for business - lowering of interest rates is likely forthcoming and with that some stimulation to the economy - he talks about having faith in the U.S. and from the top financier of our country, which speaks to how businesses should consider adding jobs. He also acknowledges the educational gap contributing to unemployment - unemployment rate for College Graduates is 5%, while unemployment rate for High School Graduates is 10% or more.
The subject of education cuts across both the individual and business planes. If you believe this is a contributing factor to the unemployment situation then, job seekers need to keep skills current or potentially re-skill for job changes. Businesses in or connected to higher education could benefit from more job seekers returning to school. The dilemma is this: Where does the money come from to pay for higher education. Most grand (stimulus) funding is starting to diminish, unemployment benefits may or may not be extended and the only other alternative would be student loans. With the number of "baby boomers" and the percent of unemployment in that population, are they going to want to be saddled with new student loans?
This is no doubt a complex topic, but we have to talk about it at an individual level. If unemployment benefits are not extended, that might mean that nearly 15 million unemployed people would have no source of income come Christmas (U.S. Bureau of Labor Statistics). This is obviously a policy issue, but that starts with the attitudes and actions of individuals.
It's a difficult time for unemployed people. It's a challenging time for our country. What can you do - on a personal level - to make a difference? Refer a friend to a job, help a friend with his/her resume, agree to keep a position filled at your small business and contact your Congressman to show support for unemployment benefits extension. This is a long road. Some of us at at the end of it and some are at the beginning, but let's all appreciate this is still an issue that, according to Bernanke may last several more years.
People want to help you, but you have to tell them how! Like the Yellow Brick Road, job search is scary, uncertain and long, but there are people along the way who can help!
You can do this!