Is America's high jobless rate the new normal?
- 10 August 2012
- From the section US & Canada
After years of high joblessness, America's unemployed legions are unmotivated and increasingly unequipped to fill the jobs that do come open, analysts say. And they may have to contend with a permanent low-employment economy.
Avril Wilson, a 59-year-old resident of Newark in the north-eastern state of New Jersey, has some good news. She's back at work.
She lost her job as a senior administrative assistant with pharmaceutical firm Hoffman LaRoche when it relocated its office to San Francisco in 2009.
The job hunt was a trial. Now she's back at work as an administrator with a non-profit.
"I felt angry," she says. "I felt humiliated.
"You sort of lose your confidence. You question, 'have I lost what I had before, where I held a job and a position and it was recognised and I worked efficiently there?'"
America has traditionally been quick to shed jobs when the economic times get tough, but just as swift to make new positions as things pick up.
It's been different this time around.
The recession has been over since June 2009. Yet unemployment is still above 8%.
Reasons for optimism?
In New Jersey, joblessness hugged the national rate until recently; now it is a stubborn percentage point over the US figure of 8.3%.
"People may not have current skills," says George Echeverri, manager of New Brunswick's One Stop Career Centre.
"They have been working in the company say 15, 20 years, and they find that their skills are somewhat obsolete for the current job market demands."
State officials say they have grounds for guarded optimism - they are convinced things are at last turning around.
The good numbers in manufacturing and, more recently, property, are re-building confidence, they say.
Ahead of cuts to unemployment benefits, the state is putting all its long-term unemployed through a job-hunting refresher course.
The two-hour programme run by Mercer County College reminds job hunters about the need for a good CV - and tells them they may have to travel to maximise their chances.
North Dakota, where an oil boom has pushed down the unemployment rate to 3%, is mentioned, only partly in jest.
More than 40% of the US unemployed have been out of work for more than six months.
And the longer people are out of work, the harder it becomes to find a new job, says Mike Glass, who teaches the course.
Their skills degrade, Mr Glass says. They lose motivation, and as the months drag on, employers become more and more wary of taking them on.
But for the two dozen or so rather bored and understandably cynical attendees, he also some good news: the number of job fairs held in the state has risen since the beginning of the year.
"When big employers are prepared to send staff out to job fairs to collect resumes," he says, "you know they are looking to start hiring people."
Jeff Scheininger, for one, is about to hire again for his metal-hose manufacturing company.
The expansion will take him to 19 employees. But he doesn't go so far as to describe himself as optimistic.
"I am guarded," he says.
"I believe that we are stuck in a cycle of very low growth. The situation in Europe is very dire.
"We have not fixed our banking issues. The American consumer is certainly not going to spend money he doesn't have. I don't think they are going to do that anymore."
US economic figures are difficult to divine. But for some time now, many companies have been piling up big profits without hiring new staff.
"A lot of the business bounce-back has been by cutting costs," says Tom Bracken, president of the New Jersey Chamber of Commerce. "The biggest cost to any company is labour."
Companies, Mr Bracken says, are running leaner and meaner.
In New Jersey and in other parts of the US, there is strong talk of a rebound in employment. But how far it will go is unclear.
A rise in the number of de-skilled and demotivated long-term unemployed may coincide with a reshaping of the American labour market.
"I think there is a new normal," Mr Bracken says.
"I don't think you are ever going to get back to very low unemployment. I think we can have a vibrant economy and a higher unemployment rate than is historical."