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| RISING UNEMPLOYMENT | |
 May 4, 2001  |
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A panel looks at the nation's new unemployment figures, the highest in two-and-a-half years.
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Well, Alan Krueger, let me start with you. When you look at today's numbers, what do you see and what do you make of it? |
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RAY SUAREZ: When you look at a wider time frame, though, four-and-a-half percent is still pretty good. Should we -- or should we look to pay a lot of attention to one month's numbers? ALAN KRUEGER: Well, I think you're absolutely right. One shouldn't pay too much attention to one report. But this -- and four-and-a-half percent unemployment is a very low number in historical perspective. On the other hand, the last couple of months have been soft, and this report weakens my view of how the economy is doing. RAY SUAREZ: Cecilia Conrad, in California, the last recession hung on longer. The jobs recovery took a little longer to get here. Is California still out of cycle, or is it leading the way this time?
RAY SUAREZ: So did the temps get hit first? Is that one of the places the canaries in the coal mine that you look for…. CECILIA CONRAD: Definitely. I think when you look at this sector, because they have relied quite a bit on outside labor to help supply some of the gaps that they've had historically, just a year ago we were talking about shortages in this labor market, and I think that's not something we're going to hear a lot about this summer. RAY SUAREZ: Jerry Jasinowski, as we look at the country as a whole, is it your members who are shedding a lot of these jobs?
RAY SUAREZ: When you refer to 100,000 out of the total number, that's 100,000 out of 223,000 jobs lost nationwide. Are these jobs that you'll likely be rehired if things show a sign later in the year, or will companies be slower to rehire and quick to shed at the sign of trouble. |
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| The hiring question | |||||||||||||||||||||||||||||
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RAY SUAREZ: Marilyn Mackes, the last time you were on this program, you were hear to talk about the white hot employment market for college graduates. For those people who are hitting the labor pool this week, next week, into June, what's waiting for them?
RAY SUAREZ: Last year there were reports of sort of an employment equivalent of panic buying, companies snapping up graduates that they weren't even sure how to use yet, people being a little bit more cautious this spring? MARILYN MACKES: Absolutely. It's going to be a little bit tougher for candidates -- they need to market themselves more effectively, and obviously, as some of the other panelists here have described, and employers are going to be more selective. I will say that even in times when there have been cuts in industry and business and services areas, etc., there has still been new hiring because it's very important to keep that fresh blood coming into the organization, bringing in new skills and capabilities, but at the same time obviously what we're seeing is that employers are going to take a little bit more conservative approach.
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| The numbers in perspective | |||||||||||||||||||||||||||||
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One thing I would add is an interesting development this month and last month is that the unemployment rate for college graduates has increased. Now ordinarily the unemployment rate is quite low for college graduates, even in a downturn. And usually when the economy starts to slow down, the unemployment rate increases most for high school dropouts, high school graduates. The last few months we've seen a sharper increase in the unemployment rate for college graduates who are 25 and older, so this might be related to some of the tech slowdown issues, and it's something to watch because I think it makes this current phase of the business cycle unusual. RAY SUAREZ: Cecilia Conrad.
RAY SUAREZ: So trickle down meaning that the job cuts are seen first in the white collar, managerial, technical ranks, and then only after in other places in the work force? CECILIA CONRAD: That seems potentially what's going on here. RAY SUAREZ: Do you see that, Jerry Jasinowski?
RAY SUAREZ: Marilyn Mackes, you were going to jump in before? |
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| Recent college graduates | |||||||||||||||||||||||||||||
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I think one of the interesting things that is going to come about is that there's been a lot of question about these new hires that have gone to work in these kinds of organizations, and their sense of loyalty and all that sort of thing, that we're in a whole new world of employment. I think it would be interesting to see what happens as a result of what we're experiencing now in terms of people's approach to work and the kinds of organizations that they want to be a part of.
MARILYN MACKES: Yeah. Actually, surprisingly, even though we are in this kind of slowdown economy, the starting salaries for many of the disciplines that are out there, like, you know, computer science and computer engineers, some of those are in the eight to ten percent increase range. Our business majors are making somewhere between five and eight percent, accounting, finance, marketing, and even our liberal arts graduates -- it's a little early to say at this time -- we usually get that data in later -- even they are experiencing pretty good increases in terms of salary. RAY SUAREZ: And Alan Krueger, why don't you take us home. What should we be looking for? What numbers should we be paying close attention to in the coming weeks?
RAY SUAREZ: Guests, thank you all. |
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RAY
SUAREZ: For a closer look at today's numbers and the people and the
companies behind them, we turn to Cecilia Conrad, an economist at Pomona
College in Claremont, California; Marilyn Mackes, executive director
of the National Association of Colleges and Employers; Alan Krueger,
professor of economics at Princeton University and an economic writer
for The New York Times; he's also former chief economist for
the Department of Labor; and Jerry Jasinowski, economist and president
of the National Association of Manufacturers. 
ALAN
KRUEGER: Well, today's numbers were very weak. It's hard to find the
silver lining in the numbers that came out today. The unemployment rate
increased to four-and-a-half percent; the loss in total employment was
almost a quarter of a million jobs; manufacturing led job loss, but
job growth was soft outside of manufacturing; temporary help; temporary
help sector had a big loss, so this was quite a grim report.
CECILIA
CONRAD: Oh, it's still a little bit out of cycle, but I do see some
trouble in these numbers. Some of the softening, as Alan mentioned,
has taken place in the services sector, although there was job growth
in computer programming services; it's much softer and much smaller
rate of growth than we've seen in the past. And even in the temporary
help supply, which most people don't realize a big part of that is actually
high tech labor, people who are being hired out as computer programmers
and so on; that drop off for me spells trouble.
JERRY
JASINOWSKI: Well, manufacturers have been shedding jobs for some time,
but what's particularly disturbing about this report is how big the
number is, how 100,000 of it's in manufacturing layoffs, but a lot of
it's also in electronics and technology as was just referred to. And
then you've got the temporary help, so it's now clear that the manufacturing
layoffs have come to technology and they've come to the service sector.
And, as a result, I think we're looking at very slow growth in the first
and second quarter of this year, and that's very troublesome.
JERRY
JASINOWSKI: It's a very good question. Basically, we rehire people in
the American economy. We've seen that. But in order to do that, as you
know, you've got to have high growth, and growth is now one percent
or 1.5 percent, and you've got to be substantially over two percent
growth in order to get decent employment gains. So I don't see people
picking up their hiring soon -- because it's going to be the third quarter
before you get any kind of decent growth and maybe even fourth, and
I wouldn't look for employment to strengthen this year very much at
all.
MARILYN
MACKES: Well, this year's class of 2001 is experiencing a different
market than the classes for the last two years. Obviously, we had a
white hot market, and it was a very robust economy. Even in the fall
-- when we surveyed employers across the country that are hiring college
grads, and they projected about a 23 percent increase in their hiring.
When we surveyed them again in March, that was decreased down to 18
percent. But that still does represent an increase. Now, what we've
seen on the campuses in terms of real interviewing and offers is that,
in fact, the fall was an incredibly busy recruiting season and the spring
has slowed down somewhat. We're still finding, though, in a recent survey
that we did with employers that they're still describing the college
market as still very competitive. They're rating it at about a four
out of one to five, five being the most competitive in terms of getting
the kind of candidates that they need for the marketplace.
RAY
SUAREZ: Alan Krueger, help me with these numbers a little bit. When
you get a monthly unemployment report where the job losses are four
times higher than the previous month, from a statistical point of view,
do we throw that out as an aberrant month; do we wait till next month
to get a more typical track for this job market?
CECILIA
CONRAD: I was just going to add in a way there's a possibility here
of sort of a trickle-down economic slowdown. We usually think of trickle
down in the context of economic advance, but what we're seeing here
is that in the sectors like computer programming services and in the
high tech, these are sectors that have put high demands on college educated
labor. And as Alan pointed out, we've seen a little bit of unemployment
rise there, and as a consequence of that, it took a while in California,
but the growth in that sector spurred growth in other sectors because
people started to demand services. They started to eat away from home,
this printing and publishing, and all those types of auxiliary services
that tended to use less skilled labor. So what we see now happening
to college graduates may be an ominous sign for people with less education
as we look to fall.