Morici: Jobs Growth Tanks in March
The headline unemployment rate is 7.6%, but adding in adults who are discouraged and quit looking for work and part-timers preferring full-time positions, the jobless rate becomes 13.8%. For many years, inflation-adjusted wages have been falling and income inequality rising.
Sluggish growth is one culprit -- the Bush expansion delivered only 2.1% annual GDP growth. That's about the same as the Obama recovery after 42 months. However, globalization and technological progress have wrought fundamental changes that rapid growth alone can't fix.
Cheaper natural gas and rising wages in China make the United States more attractive for manufacturing. However, new factories require very few workers. Engineers have applied the wizardry of handheld devices to factory automation with amazing results.
Similar progress has reduced many business support positions ranging from secretaries to travel agents -- slicing demand for workers with a general high-school education.
Over the last decade the same thing has happened to college graduates occupying middle management and similar professional positions. Consequently, college graduates have been taking jobs once predominantly filled by high school graduates -- insurance agents and adjusters, retail managers, to name a few -- and the earnings advantage of college graduates over less educated workers has narrowed.
Well-paying jobs abound for college graduates in technical areas such as accounting, engineering and nursing, but not for those with degrees in liberal arts and general business. Similarly, high school graduates with some additional training, often through a community college, can find good jobs, for example, in the energy, medical and hospitality sectors.
All this gives rise to widening income inequality between those who have specialized skills and those who don't, and it imposes particular burdens on the two bookends of the labor force -- recent grads and workers above 50.
Recent liberal arts graduates face particular difficulty getting that first decent job such as in finance or the media,--where employer training and entry-level experience combine to impart job-specific skills that permit them to climb the ladder.