The new national unemployment figures came out on Friday and they present the usual mixed message. On the one hand, the jobless rate declined another one-tenth of one-percent. But on the other hand, the drop in the percentage came only because more people gave up looking for jobs than actually found one. It has been the main reason unemployment has declined at all in the last year-plus--fewer people are bothering to try.
The Associated Press had an article over the weekend detailing the stories of a few of the "workforce dropouts"--and it's pretty much the same situation: they really do want to work, they have just grown tired of not finding anything. But what we don't see in any of these articles is why there aren't jobs for these people. Where are the quotes from the business leaders on why we are having a jobless recovery?
Is it because we have learned to operate our businesses in more efficient ways? If 35-people are getting the work done that it used to take 40 or 45 people to do (whether through advances in technology or just plain old doing more work) why add more staff if the demand isn't there? Or is it because businesses are paralyzed by the upcoming overhaul of health insurance? Of all the things that we "needed to pass the bill to find out what was in it" the most important to employers was "how much is this going to cost us?" Unfortunately, those numbers weren't available in 2011--and they still aren't available today--thanks in large part to the Obama Administration's failure to realize how difficult it was going to be create all of these new levels of bureaucracy.
To put this into personal finance terms, if you had no idea how much money you would be making for the next two or three years, would you take out a car loan or a lease? Would you open a home-equity line of credit? Or would you take out a mortgage to buy that cottage on the lake up north? Of course you wouldn't--and that is why employers are so reluctant to take on extra staff now. They just have no idea what it is actually going to cost them.
And so we--and the millions of those unemployed and no longer looking for work--will sit and wait for 2014 and probably 2015 before we get any answers to our great "Social Experiment". That is a really long time to "Hope".