If you are having a hard time finding a job, you are not alone. In some areas of the country, the rate is 10 percent or higher. Below are the four main answers to the question that everyone looking for a job right now is asking.
1. The Great Recession Had A Negative Impact
The Great Recession started in 2007 with the decline of the housing market, the mortgage crisis, and then continued into 2008 with the collapse of several large financial institutions including Lehman Brothers and AIG. The collapse of the housing market was the major consequence of these failures. As a result, consumer spending and earnings decreased, banks started restricting access to credit, and companies began to lay off employees. At its peak, the national unemployment rate was hovering at 10 percent.
Almost five years after, the recession has been declared to be over, but unfortunately, hiring has not rebounded in the way that the stock market and housing market has. This is partially because businesses utilized the great recession to layoff workers who had been replaced by technology and automation solutions, but had not retired or been fired yet. Many layoffs were not only to save money, but businesses now had an excuse to layoff what they referred to as, “overpaid and older” workers. Those jobs are not coming back.
2. It’s Now an Employers Market
In real estate, when the home prices are high, it’s a “sellers” market, since there is a higher demand for homes that is pushing prices higher. It works the same for the job market, since there is such a high demand for jobs and companies have so many applicants for a single position, employers can demand more work, lower wages, and contract employees instead of regular employees.
During the great recession, companies had the advantage and were able to have their employees work harder for less pay. Employees now continue to work harder with longer hours since the job market is difficult and it would be hard to find another job. This decreases the need for new hires and keeps the job market more difficult. It’s a vicious cycle. Additionally, since businesses of all sizes have had to learn to get by with fewer employees, they had to learn how to get similar levels of productivity out of a smaller workforce.
3. Experienced is Scarce, General Skills are Plentiful
Despite the increasing number of college graduates, there are millions of positions that are going unfilled due to a lack of experience. Many college graduates do not want to do trade jobs or learn a trade. This increases competition for entry and mid-level jobs requiring general college degrees and unspecific skills, and decreases competition for trade related jobs. Trade labor has been discouraged throughout the last two decades and positions that require a four year degree have been emphasized.
Also see video: How To Get A Job When Unemployment Is High
This means that a lot of technical jobs are up for grabs for anyone who wants to take the time to learn the skills. There are a shortage of mechanics, plumbers and other labor intensive positions available that go unfilled because no one has the experience, education, or skills needed to perform those jobs.
4. Consumer Demand Has Yet To Fully Rebound
Consumer demand is a large factor when it comes to the health of the economy. Businesses are hesitant to hire workers when there is a perceived lack of demand for their products. If consumer demand does not rebound, employers don’t want the negative press and negative employee morale from laying off the new hires. It creates another vicious cycle situation where consumers don’t have good jobs and so they don’t spend money to buy things, while businesses are reluctant to hire because there isn’t enough demand to do so.
The good news is that retail spending seems to be inching up while the housing market is starting to stabilize. Recently, US Household purchases (accounting for just about 70% of the economy) rose 0.5 percent, after a smaller 0.2 percent increase the month before.