Blame Employers for the Jobs Crisis

Did you know 72% of all employers claim they cannot find qualified candidates to fill positions? I kid you not! Below is a clip from the usually sane Dylan Ratigan show that had me throwing shoes at the screen. Bill Clinton, no less, is making this claim. It's ridiculous.



Do these statements have any validity? The claim that there is a skills shortage in America? No.

Firstly we have never ending horror stories on employers and their discrimination tricks:

A surprising number of Craigslist job ads are automatically disqualifying the long-term jobless by including the stipulations, "Must be currently employed," "No unemployed candidates will be considered," or "must have been employed within the last 6 months." Other job postings specify that if an applicant is recently unemployed, he or she should include a "good reason" for his or her layoff along with a resumé.

Right there, employers are out of the box rejecting people needing a job, because....they need a job.

The reality is job losses are across the board. Below is an animation of the percentages different industries make up of the total job market. Across 12 sectors, the animation moves from September 2006 to September 2010.


break down of job market by percentage of occupations and industries from 09-2006 to 09-2010


Notice while construction has shrunk (blue), originally it wasn't that large of the labor market in the first place. Manufacturing on the other hand, (bright red), has shrunk significantly. Notice that the skills of the future, information (pink), has shrunk this recession. Most industries associated with trade have shrunk. The point of this animation is to show, in terms of percentages, there really is not any major structural change to the labor market and types of jobs. There just ain't any jobs.

Boston Federal Reserve President, Eric Rosengren, gave a speech speaking directly to the state of the job market today. He says the problem is a demand one.

In rather stark contrast, the most recent recession is far less a reflection of dislocation in a few industries but rather reflects a general decline in almost all industries. As the chart [reproduced below] shows, in this recession there has been a peak to trough loss of employment of 5 percent or greater in construction, manufacturing, retail trade, wholesale trade, transportation, information technology, financial activities, and professional and business services. To me, this does not suggest that the driver is structural change in the economy increasing job mismatches – although no doubt some of that exists – but instead I see here a widespread decline in demand across most industries.

While we have Pundits and even former Presidents claiming there is a skills shortage, from Rosengren's speech, we have proof positive companies are not having a hard time finding the right type of skills. Below is a graph, from the Boston Federal Reserve, showing the current difficulty reported from businesses on finding workers. Notice it's at record lows.


hard to fill jobs


Of course it is absurd to claim America has a skills shortage. We have sky high unemployment rates, across the board, relative to their past rates, with highly skilled and educated people.

Below is a graph from Rosengren's speech which shows industry structural jobs change during this recession, along with past recessions.


structural change employment


Notice how information and manufacturing started to be decimated with the China trade agreement and advances in telecommunications. This is when the great offshore outsourcing of jobs started, in 2001.

Below is the graph for the lowest unemployment rate (official), college graduates. It is over double what it was at the beginning of this decade and this is for people with some work experience.


unemployment rate college


Rosengren makes this observation:

The first year of the recovery has an employment pattern similar to shallow recessions, indicating just how weak the recovery has been so far.

While the NBER claims this is a recovery cycle, most notice the job market hasn't quite got the message. Could this be similar to 2001, where labor arbitrage was enabled on steroids? 2.4 million jobs were lost to China from 2001-2008 alone and the tech related people in Silicon valley numbers dropped by 50%. These people were pushed entirely out of the field, their jobs offshore outsourced, under the excuse of the dot con bust.

While Boston Fed's speech is on the total labor market and further action recommendations for the Federal Reserve, the claim there is a skills shortage is simply insult to injury.

EPI estimates half a million jobs will be lost to China in this year alone.

Offshore outsourcing companies are seeing double digit growth:

India's big three software outsourcing firms are set to regain double-digit growth rates during the second quarter, as customers in the US and Europe revive technology spending for addressing new markets and start offshoring their IT and back office projects to halve their costs.

Tata Consultancy Services, Infosys Technologies and Wipro, which count Citibank, Dow Chemicals, JP Morgan and BP Plc among their top customers, are expected to grow their quarter to September revenues by around 20% compared to the same period last year, at least five analysts tracking the sector told ET.

"We are getting 'large deals' , but maybe not as large as we would like. We are getting discretionary and transformation deals. In some sense, it's business as usual in the short term but we have to wait and watch over medium to long term," said S 'Kris' Gopalakrishnan , chief executive of Infosys.

He added that Infosys has started adding customers in US and Europe. "We traditionally define large deals as $100 million-plus for outsourcing deals and $50 million-plus for transformational deals—it's lower than that at this point," said Mr Gopalakrishnan.

Public citizen gives us a new layoff tracker, showing job losses directly related to trade and offshore outsourcing.

The AFL-CIO has put together a new website and database, which allows you to see who is exporting jobs by zip code.

Those of us in STEM know what skills shortage really means. It means enabling more outsourcing, more foreign guest workers and more immigration. The evidence is overwhelming these techniques labor arbitrage Americans and give a strong disincentive to even bother with difficult subject areas such as engineering. Why bother to bust your butt on difficult topics when your career won't even start or be gone due to labor arbitrage and discrimination in 10 years?

There is no skills shortage, there never was a skill shortage. There is a shortage of good employers who do not discriminate, age discriminate, ship jobs to India, China, Brazil and treat their workers like cannon fodder. There also is a shortage of jobs, pure and simple. Put U.S. workers first. Demand these employers quit their inane, harsh, wage repressing, discriminatory labor practices. Put a few of of these traitorous employers in jail and sue 'em. Deal with trade and offshore outsourcing, invest in America and Americans. Then and only then will we might actually get somewhere to putting people back to work.

Stop the bubble mentality and get America back to producing things again. Real goods, real services, not Dutch Tulip bulbs, financial fiction or quarterly cost reductions.

During WWII and throughout the history of the United States, employers trained their own workers. At the height of the depression, employers trained their workers. They even sent them to college. Nowadays large corporations want prefab workers for $10/hr that they can dispose of like a fast food wrapper. This mentality must change and it could by passing legislation as well as enforcing current labor law.

Government must force employers, particularly large, multinational corporations, to hire America. It is their patriotic duty as well as vital to our economic future for employers to provide jobs to all Americans.



Eric S. Rosengren's speech

His speech, you should read in it's entirety, (at link) and the pdf is where all of his graphs are, at the bottom. It's a very concise, clear and accurate speech with data to back it up.

(the animated gif was done by yours truly)

The point of this is while it's clear the Fed wants to Stimulate the economy further, I don't see how it's going to do that much, for I strongly suspect these labor arbitrage/globalization issues are hammering the middle class, as they have been for the last decade (30 years actually, but the last 10 have been severe). Maybe they can do something on currency, but I believe that's just to debase ours.

Pointers at other sites

wow, you pulled my rant too

I think most people have if not experienced one beyond reality absurd job treatment, have witnessed it happening to others, by the age of 25 if not sooner.

This should go viral - let's get it around

I'll post my links here. THANK YOU Robert. Speaking for the people eloquently and with the facts. I'm a bit struck with the comprehensive nature of your rebuttal to the functionaries like Clinton and Peterson. it's a scam and the people are the victims.

And what about withdrawing those tax breaks for companies that outsource? We'll never see that.

Go viral!

It seems reddit and then other blogs and sites in comments helps.

I agree, there must be some sort of labor arbitrage something push out there, probably planned for the lame duck session to see this.

I went hunting for this 72% figure, even in corporate lobbyist propaganda papers and I could not find any metric like that whatsoever. But the "skills shortage" usually comes from the NASSCOM, ITAA, "Compete America" and U.S. Chamber of Commerce lobbyists because they want to ship more jobs overseas and want to bring in more foreign guest workers to displace Americans.

That's my guess. I like Ratigan, big fan, but sometimes I really think he listens to some corporate agenda and doesn't realize where it is originating from. I think this is one of those times for this story. On the surface, who can argue with good education? I sure can't, but this is one of those trojan horse issues.

This just burns my ass because over and over again we see the American worker poo pooed. Give me a break, the U.S. worker works harder, we have less vacation days, we simply bust ass. Then, this idea that one cannot learn on the job.

Then, employers are just absurd. They won't hire older people, they will not hire disabled people. Depending on the occupational sector, they don't like black people, or in STEM, the force out rate for women is 53% in just a 10 year time window! What's wrong with this picture! Then they all hate older people. It's ridiculous, we need all of the older people and this country needs to change it's attitude fast because a. they need the money and b. they have years of experience and it really makes a difference.

Part of the age discrimination is perceived health care costs, which should be brought down, the rest is just ...well, attitude.

How about young people? It used to be there were college programs, PAID, co-ops, PAID internships which pretty much could take care of your living expenses plus tuition for the rest of the year. This was standard practice to take newbies under the older workers wing and help them get their sea legs.

All of this worker culture has been decimated.

As a techie, I can tell you a main STEM skill is the never ending ability to learn and self-teach. You'd be dead in the water without that ability for technology changes every 6 months. That said, acting like people cannot learn new skills on the job, when the entire United States learned skills on the job to become the biggest military machine in history and win the war...

just infuriates me. I mean come on, the entire planet is currently addicted to iphones and facebook. All of that requires learning new skills...i.e. the younger crowd is all thumbs, literally. Think they cannot learn some skilled manufacturing trade if they can figure out how to text at 80wpm with just their thumbs? What is wrong with these corporations and politicians?

Spread it around just for the animated gif! I'm working on adding more graphics and displays to illustrate ideas/data/concepts better, but I had to learn how to make one, which took forever, esp. trying to represent the "job pie" in one shot.

(ah, an example of learning a new skill now that I think of it!)

Don't lose the outrage

It's absurd, beyond words. The very people that they laid off, who presumably were doing at least adequately, are still there. Now they're not good enough to hire.

This is a huge issue, much easier to grasp than the notarization story, which is in incredibly important. But Clinton let the cat out of the bag - there are 5 million jobs a begging. They're probably waiting to see if Obama's link of tax breaks to businesses that don't outsource goes through. That would explain why they're waiting. Of course, it hurts the employers by delaying recession ending acts - like hiring their damn employees back!

We have the fools in charge after decades of nepotism and a ubiquitous corporate requirement for Quislings at the top.

50 Million jos a begging

Show me. Show me the job postings.

I don't believe it.

Atlanta Fed Blog

Has a more in depth post on this "structural" employment debate. There is a new index, the recruitment intensity index, which shows employers are being absurd in their "hyper" requirements.

Unfortunately the NBER wants $5 bucks to get to the paper (aren't they government funded?).

Journalists, bloggers and press people

I just saw a slew of articles pop up on major news sites, very similar to this post, about 12-16 hours after this post was published.

That's all fine and good, maybe great minds think alike, or maybe the great Kahuna God in the Ether implanted in a host of media minds the idea employers were not exactly acting above board. But isn't that kind of synchronicity just a little bit interesting?

If you are a journalist, paid, professional media, but how about linking or citing this article?

I sure cite and link up the original information, including the Boston Fed, the Atlanta Fed and whatever else I find, give hat tips, acknowledge the original, or link to the inspiration. Can ya all do the same thing?

Individual workers take the risks, employers reap the rewards

Sigh ... same old whining from employers that want to reap the rewards of a well trained work force without having to INVEST in employee training.

Why is it that if an employer buys some new machine that they assume there exists a large pool of well trained individuals capable of operating that machine?

Another example of the GREAT RISK TRANSFER from corporations onto individuals. You're shifting the cost of training from the corporation to the individual. Individuals take on the time and money risks of acquiring new skills - hoping such skills will remain relevant and in demand.

So you invested 5 years and $80,000 in an Electrical Engineering degree and can't find a job? Too bad but during those 5 years business found out it was much cheaper to outsource.

So you have 15 years on-the-job experience as a Computer Engineer and find you've been laid off at the same time your employer is screaming to Congress that there is a "skills shortage"? Too bad, your skills are old and crusty. Although you have years of experience with technology X, technology Y is now hot. And it doesn't matter that you tell your employer that you'd love to learn technology Y ... that you'd put in extra time of your own to learn it. They'd rather scream "skills shortage" to Congress.


Dylan Ratigan is not "normally sane." His show always makes me want to throw my shoes at the TV screen.

Other than that, I agree with you.

Ratigan & Clinton Also Sellouts on US Job Availability?

Thank you, Robert, for doing this research for us.

May I quote you and run links to your site at my blog?


We live for sharing

Sure, anytime. Just not complete articles or posts without explicit author permission. Teasers are fine even.

I would not claim Ratigan is a "sell out" by any stretch, more this is just one little clip and this argument is a common trojan horse, so in order words, unless one is familiar with the history of corporate lobbyists shouting labor shortage or "skills mismatch" and so on, might not get it initially.

I like Ratigan, he left CNBC when he saw the beyond belief Ponzi scheme going on in the financial meltdown and is clearly trying to get the issues out there.

Maybe he doesn't hit a home run every time, but that's what blogs are for.


Ratigan the Challenger

He was talking about the outrageous AIG scam before it ecploded. CDOs and Default Swaps -- he was quick to point out that this amounted to writing insurance on bets at a casino, except AIG did not have the assets to cover the "insurance" they were writing. He was brave enough to ask "Why aren't these guys in jail?" when it was considered not polite to mention such things. And the taxpayer got stick with the bill for their bonuses. Dylan, will you please run for office?

Frank T.

Trade policy website down?

I was "overqualified" 40 years ago. Labor shortage has always been a sham.
P.S. shut down?

The requested URL /wp-content/plugins/mailpress/mp-includes/action.php was not found on this server.
Apache/2.0.52 (CentOS) Server at Port 80

trade reform website

You're right, it's completely crashed. I sent off some emails to some of the folks associated with that group to find out what's happening. Hopefully it's just a crash.

Ya know, we need people to pipe up on the sham, their experience, what they saw. This is classic to claim someone "isn't qualified" for a job, to actually offshore outsource jobs, discriminate and so on. (because if they confessed the real reason, they would be sued)..

supply and demand

If there were a shortage of skilled workers, we'd be seeing a rise in wages in certain sectors. We did in the 1990s. We aren't seeing one, so there is no shortage of skilled workers. Supply and demand come to the rescue.