September 3, 2010
If only it looked like “up” from here…
First, viz. the U.S., the BLS reported this week:
Nonfarm payroll employment changed little (-54,000) in August, and the unemployment rate was about unchanged at 9.6 percent, the U.S. Bureau of Labor Statistics reported today. Government employment fell, as 114,000 temporary workers hired for the decennial census completed their work. Private-sector payroll employment continued to trend up modestly (+67,000).
The ever-illuminating Calculated Risk puts those numbers (which are being reported as a pleasant surprise to the extent that they weren’t as bad as many feared) into perspective:
… suggesting that any light at the end of this particular tunnel is likely a pretty distant glow at this point… and thus that any real recovery– a restoration of employment, and the consumer purchasing power and confidence that would accompany it– may be a while in coming.
Second, lest we imagine that the disappearance of Europe and the PIIGS from the front page mean that all’s well, a chart from Clusterstock all-too-aptly titled “Europe’s Crisis Coming Back In 3…2…1…“:
While the financial problems of Europe’s periphery ‘PIIGS’ economies (Portugal, Italy, Ireland, Greece, and Spain), has receded substantially from business headlines, this doesn’t mean that their crisis is over, or even getting better.
In fact, the creditworthiness of nations such as Greece, Portugal, and Spain is looking worse than ever, as represented by % spread between the yield demanded by bondholder for ten-year PIIGS government bonds and the ten-year bonds of Germany (Germany is Europe’s version of a ‘risk-free’ yield to compare things against). For all of the PIIGS, it is worse off than before the European Unions’s one-trillion-dollar affirmations of support for the PIIGS, or before the much bally-hooed bank stress tests.
The frenzy surrounding the Eurozone crisis may have ebbed, but it’ll be back…
Japan? Their economy, already in shaky shape, has been rocked by an unexpected rise in the value of the Yen against the dollar (and thus unanticipated– and unwanted– pressure on exports).
The governments of the developed world seem to be behaving as though this is all a kind of “hurricane season” through which they need simply to batten down.
Filed in Competition and Industry Structure, Economic, Political, Scenario Planning, Social
Tags: BLS, Bureau of Labor Statistics, economics, economy, employment, Euro crisis, European economic crisis, European economy, government employment, Greece, Ireland, Italy, Japan, PIIGS, Portugal, private employment, Private-sector payroll, Spain, Unemployment, Yen
The Bureau of Labor Statistics reminds us that it’s smart to stay in school:
But as Calculated Risk reports, while unemployment among the best educated is still lowest, it’s increased as much in percentage terms for them during this current recession as for any other group.
One notes that all four groups** were slow to rebound after the 2001 recession– not an encouraging reminder if one is hoping for a brisk employment-led, consumption-fueled recovery this time around.
But in some ways more striking is a difference we might expect, but that hasn’t yet emerged. Calculated Risk:
I’d expect the unemployment rate to fall faster for workers with higher levels of education, since their skills are more transferable, than for workers with less education. I’d also expect the unemployment rate for workers with lower levels of education to stay elevated longer in this “recovery” because there is no building boom this time. Just a guess and it isn’t happening so far … currently the unemployment rate for the highest educated group is still increasing.
Clearly, from an individual’s point-of-view, it’s still smarter to get more education than less. But the perturbations of past periods remind us that the gearing between between academic degrees and financial success isn’t always perfectly tight… Indeed, those with sharply-defined professional credentials in fields– e.g, finance– that are unlikely even in the intermediate term (if ever) to recover their bubble-fueled growth rates, may find their advanced degrees at best unhelpful; at worst, downright prejudicial.
Economic recovery and growth will be driven to some large extent by innovation; that innovation will create new– and new kinds of– jobs. Looking even just five years out, much less ten, one has to admit that it’s just not possible to predict what these emergent jobs, nor their requirements, will be. (Consider, e.g., the hottest topic– and job category– in marketing/advertising these days: “social media marketing”… which wasn’t even a glimmer a decade ago, and was just being born five year ago.) This is a challenge for those new to the work force, who have to wrangle the product of their schooling and their personal experience into a shape that can fit the entry-level positions they seek. It is a much bigger challenge for those mid-career who find themselves needy of making a move: these more mature folks have not only to learn new fields, they also have to re-direct the considerable momentum of perception and habit that characterized their old– and they have to do those things, usually, in ways that justify salaries way north of entry-level.
All of which underlines for your correspondent the extraordinary value of a liberal arts education. When one is faced with a “working adulthood” that is one transitional challenge after another, no skill is more valuable than the capacity to adapt. And no capability is more central to that adaptation than the ability effectively and efficiently to learn.
This is precisely what, at its core, a liberal arts education is about: learning to learn.
There are many, many other reasons, rooted in personal and societal benefits, to pursue a liberal arts education, and top support a strong foundation of liberal arts in higher education. But the lessons of the last couple of years– indeed, of the last several decades– suggest that the economic rationale is plenty strong as well…
And besides, it’s fun.
* “Education is what remains after one has forgotten everything he learned in school.”
- Albert Einstein
** To put these cohorts into perspective, the Census Bureau suggests that, of these folks “25 yrs. and over” (in 2008):
- 13.4% had less than a high school diploma.
- 31.2% were high school graduates, no college.
- 26.0% had some college or associate degree.
- 29.4% had a college degree or higher.
UPDATE: Reader JK directs our attention to another treatment of the data, in the NY Times. As he suggests, even more dramatic.
Filed in Economic, Political, Scenario Planning, Social
Tags: 1933 Banking Act, Albert Einstein, Bank Holiday, Banking Act of 1933, Banking Holiday, Bureau of Labor Statistics, Census Bureau, Congress Federal Reserve, Depression, earnings, economic crisis, economic recovery, education, Emergency Banking Act, employment, FDIC, Federal Deposit Insurance Company, Franklin Delano Roosevelt, Great Depression, higher education, income, liberal arts, liberal arts education, New Deal, professional education, Recession, Unemployment, unemployment rate