How Bad is the Employment Situation – Really?

The rules for receiving unemployment compensation are warped. People receiving UC only get a fraction of their prior income, yet if they accept any work to try to make ends meet, their UC benefits are cut. The system they've paid into for years penalizes them when they need it the most. It's a dis-incentive to work.

Adding to the unemployment mess, 'Obamacare' and the Obama administration's uneven message on the economy leave many employers uncertain about their overhead costs for current employees as well as for new hires. Thus, some manpower needs aren't even addressed.

Republicans in congress have done everything in their power to stop any recover so they can say "look, no jobs... elect us".

Democrats don't have a super majority. If they did then I would agree fully in your statement. Its hard to get a 2/3 count in the senate when you only have a little over 50% of the seats.

More on the topic my wife has been out of work for 2 years now. She has 20 years as a senior insides sales manager, with a BA in Business Management and her MBA. Right now she volunteers 30-40 hrs a week at our child's school, plus runs her own part-time business. Her biggest problem with getting work is that she is too over qualified, and employers are afraid to take her on because of a chance of her leaving for the next big job. I also think employers have been getting away with normal or above-normal work loads with fewer employees so why hire someone if you really don't need them?

57 Democrats and 2 independents in the Senate is not barely 50%. That's up for a change next year when newly elected candidates get sworn in. However, most voters see the current administration and Congress as directly responsible for the current economics. Even though most believe it is an inherited problem, the lack of positive results has generated a large wave of voter resentment.

You wrote, "I also think employers have been getting away with normal or above-normal work loads with fewer employees so why hire someone if you really don't need them?"

That is correct. The other half of the equation is the uncertainty of what's to come economically. Unless you have deep pockets, you are better holding on to cash reserves for any rough seas ahead than investing in risky ventures.

Even with 59 members (including independents) it is not a super majority, which is still necassary to pass a bill and overcome a fillabuster and/or Presidencal veto.

Just look at the last unemployment extention it was held up for over a month by one vote. Even though a majority voted for it. There are a whole host of tricks that both parties use to make sure that nothing get done.

I have not bothered to invest in a 401K in the present company I work for. They don't offer to put anything in to it and requires 10 years to be vested. Who knows how long I'll be here.

This country and government is rotten to the core and has been for a long time. Neither party is worth the money that businesses waste on advertisement, which they should be investing in themselves. Nothing will get done no matter who's in charge. I'm a registered independent and this election in PA all the candidate aren't worth the time of day. No one in politics is going to be able to increase jobs the companies themselves will have to work on it themselves.

I think your incorrect in your statement that a major of citizen don't want health care reform. The majority doesn't want "this" health care reform which I agree is garbage. I think we all know something needs to be done to curb rizing insurance cost and we need to have cheaper insurance for individuals that end up going to the emergency room for their "free" health care. That's where health care reform should be geared towards but neither party seems to want to go there. Making it another burden on business.

Personnally I really don't care who has control, it's doesn't mater. Neither Republicans nor Democrats are going to speed this up. I don't feel the Republicans are going to hold enough of a major to affect anything, but to make it a dead lock. So it will be business as usual in Washington, another do nothing term. Maybe that's a good thing, it will give businesses a chance to recoup.

I'll try and find the op-ed piece I found from a local economics expert. He has show over the last 100 years each recession we go through it takes longer and longer to get job growth back to normal. The last recession took six years for it to get back to 4.5%. This one he was predicting at least 8 years. We have gone through four so far, half way there.

I've noticed the mining and construction industries have both starting making a profit which is good since we are one of the keystone industries that help out many other industries.

"The majority doesn't want "this" health care reform which I agree is garbage."

Yes, you are correct. That was what I meant to say, but did not articulate it very well. ;-)

It's too bad since they had the the chance to really fix they just didn't have the guts to do it.

It was that way by design, I think.

59 seats in the senate does NOT allow the stoppage of a filibuster. Have you been paying attention?

What bills have been filibustered with this Congress?

Oh, dear you are slipping from my list of heroes because of muddy thinking.

I would have marched up to the barrier/filibuster and made them show their colors, but the Democrats decided to take the best that they could negotiate. The fact that they didn't charge the barrier to try to break through doesn't mean it wasn't there, or that it had no effect.

I think that this Congress passed everything they wanted without help from Republicans. The exceptions were immigration reform and a budget. Well, maybe "Card Check", too.

Congress didn't want to attack either of those before the elections because there would be a run on pitch forks, torches, tar, and feathers.

Nevertheless, they are fair game after November 2nd and before the next session swears in. After that I suspect that nothing will get done for the next two years, which may turn out to be a good thing, in one way.

If Congress is deadlocked for the next two years I would think that the Democrats would emerge as the winners in 2012 because they would really have someone to blame besides George Bush, which is getting a little stale. I am starting to believe that this is indeed their (Democrats) strategy and it would be a good one!

They didn't get any where near the Health Care Reform they wanted, and that was the biggest on the agenda.

What did they not get or what compromise did they have to make?

I wasn't being political regarding Obamacare, I was stating a fact. Even the legislators who passed it hadn't read the entire bill and didn't know everything that was in it. Likewise with the 'stimulus' bills. So it's no surprise that businesses have taken a wait-and-see attitude toward hiring, or doing much of anything.

And as AH pointed out, the Republicans don't really have much power now so the blame-the-Republicans message is kind of lame.

Oops. Nothing to add.

Sure!... Believe that and you are part of the problem.

If I may move back to the original discussion which I interpret as "why are companies having a hard time filling positions with so many unemployed?"

Both AH and USB made valid and true points (if i may refer to you by initials), but the article makes good reasoning for the situation also. However there are a few more reasons 1) in the article a company states it cant find any $13/hr machinists, thats because no true Machinist would work for that wage. So given the down turn companies think they can hire for less, this is a well know and accepted strategy and acknowlaged by both employer and employee. 2) We have become a service society and have lost these skilled workers, period. The reason home building has lead us out of recession the last 2 decades is because home building is the last large heavy industry in the US. 3) Our schools dont promote education in high skilled "hand skill" jobs anymore, shop classes have disappeared because the jobs went overseas, so no one has the hand skills anymore. 4) Hand skills are not as much a part of our society anymore, fixing and making things cause "you had to", everything is disposible or made not to be fixed anymore. 5) Our own companies have sabotaged the American reputation of quality, at this point I would rather buy a Toyota or Honda than any American made vehicle. This planned poor quality by our Manufactures shames me to the core, I have a printer made in china, but designed here that prompts you when it thinks you need to replace the tonner or the "something" cartrige, ingnoring these idiot lights has allowed me to make things last 3 times longer, it wasnt broke, it didnt need fixing, the company just wanted me to buy more of their product. The idiot light without an actual need is a lie and indicates where we are now, and that things will not get better unless we go back to our roots. I am not a Christian but they do promote honesty and as a country we have lost that.

Spacecannon

I know I will be in hot water with most Americans but I will add an interesting twist to your problem with unemployment. I was in a recent discussion on another thread dealing with education and I was espousing some social advantages of an educated society. In that thread I was extending social advantages with health care and was given comparisons with Russia, China, Cuba, etc.

Here is my take on social education and social health care. The current American system of post secondary education is simply too expensive. I would ask where all the money goes and demand a better system from the providers. A person who wants to be a tradesman/woman should not have to incur large debts. I have heard of debts reported as high or higher than most university education. These high costs are considered a structural deficit on the economy of USA. The trades/person must demand a high price to compensate and working for minimal wage or slightly more will not cut it.

The fact that it costs employers so much money for health care to employ one person is an onus on American companies most other western countries do not face. I live in Canada and we have had universal health care for years. As an employer, my total cost per employee for health care has been less than $100.00/yr with no fee to the employee. The cost of family health care in the USA is about $13K/year for family coverage/employee. In Canada there are no limitations on the coverage and that includes long term. Employers often provide additional coverage such as LTD or long term disability, private hospitalization, dental, travel, etc. These additional perks are often negotiated and sometimes with shared costs. If you owned a company and were to start a business where would you locate for advantage? The structural problems with health care are obvious to most in the west that have universal health care.

Before someone says its not free I will agree. Our taxes are directed to cover health care but they are shared by most everyone (at least those without creative accountants). Businesses in most western democracies are not similarly disadvantaged by the same costs. When attracting business to a country this is a major factor as it strikes at the bottom line. Further, corporate tax in Canada, is currently the lowest of all G20 countries.

I am not a raving socialist but consider myself pragmatic. I am an advocate of cheap(er) education and universal health care. These social graces are available to almost all western democracies. The insurance companies can be damned but in these health systems everyone is covered equally. It is not without its problems but even America is suffering the same aging population as in Canada. In Canada I am a raving conservative (small c). It is only to America's advantage to have fewer structural disadvantages in this age of globalization. If I am considered off topic no offense is taken.

Getting into the healthcare debate is getting off track and it is very complicated. The new system looks like it will be even more expensive with a lower standard of care, but I digress.

The real problem with getting people back to work has to do with an escalating appetite for private sector money by the Federal and local governments to pay for ever increasing entitlements and a damaged economy with an uncertain future.

What's unclear is exactly what taxes will be enacted on business and what will the economic situation be globally in the near future. Currency exchange rates threaten economic recovery on a global basis, which directly impacts our recovery. Businesses are taking a wait and see approach and gathering and holding as much cash as possible as a means to weather any additional storms and there are rumblings of the government enacting legislation to either force businesses to spend that money or face additional taxes as a punishment.

The idea that there is some issues with some job openings going unfilled is simply a tiny segment of the wider universe of the total job market. As such it is not a representative sample of the whole.

i agree with your point of view. If you are Human and compassionate this is in the future the way to address this problem for business Universl Health Care.

With the advantage of specialized education, improved awareness on job trends, pay scales and future opportunities responses to odd job/ special job calls do end up in poor responses, which means to state that-

* Calls from contacts of company employees is possible.

* Shifting the place of operation to potential human availability

*Attract by way of extra facilities transport, incentives etc.

*Develop in house human resource as multipurpose trainees.

* Relax qualification requirements, by way of inviting untrained personnel also and providing in house training.

* Part time jobs can be provided for students needing financial supports.

* Make a comfortable work conditions like free from noise, heat, pollution etc.

* Three shift operations can be diverted to two shifts by higher productive machine systems

*Working class population is shrinking everywhere, with people preferring white collar jobs or business lines or highly remunerative jobs.

Hence design your production system assuming minimum humans. All possibilities are to be tried out and no way out for future.

On wake of energy constrains 24 hours running of plants needs a reconsideration to cope up mwith sustainability.

I have been on both sides of the discussion.

I believe there is a lot of mileage in looking at transferrable skills (not necessarily employing a chief accountant because he/she can make the books balance in the household budget).

My background is engineering but I assume the following will apply in other areas.

When I was employing people, we could not find engineers with the right background in structural knowledge plus high temperature engineering plus a number of other requirements. I eventually employed a very good engineer with experience in crane design (minimal thermal knowledge). I knew we could teach him the high temperature stuff as we were experts in that (which was why we found it difficult to find people with similar expertise). Some time after he joined us he told me that he had been for a number of interviews and our company was the only one that did not immediately switch off when there was not a 100% skills match.

When I was in the position of looking for something many years later (the company I worked for was closed as part of a deal during a takeover as we were taking too much market share from a competitor who was in the takeover companies group), I looked for the area of industry that was getting the most work (subsea oil and gas at the time) and put down all the experience from my cv that related to that industry. The combination of my experience (which turned out to have about a 90% match although before thinking about it I thought would be a 5 to 10% match) landed me a job. (I had to live away from home for a while). Needless to say it worked out and I am still working in the industry and getting about two to three times as much money as before.

Another point to give some hope to those who are over the hill. I was fity three years old when this happened. I did not think I would work again.

I must admit I was very lucky and things dropped into place. But it can work out for both employers and employees. For employers - think flexible. For employees - treat job hunting as a work project and apply the same principles

A September, 2009 issue of "Manufacturing and Technology News" has pointed out a problem that may be more widespread in the west, than we care to recognize. I copy a link to the article for your perusal.

The article seems to hit on the point of lost talent to off shore manufacturing. A lot of manufacturing is surrendered to the Rising East. It has been happening for a long time but the Chinese seem to have revealed flaws in this position. How do you turn off the domestic buyers of small cheap items. Everyone will want to make their money go far. The big box stores have taken advantage of this position but it seems to be at the peril of employment and domestic talent in all countries. It seems the west should demand fairer access to Chinese markets and be wary of these monopolies. Perhaps some key industries should be retained, if only to keep a good talent pool. The incongruencies of employment can in part be explained by these monopolies. I would soon expect to see countries like China surpass the west in technology.

K, GA,

Couldnt open the link, but I have been seeing the same thing happen, jobs going overseas for decades. The really freightening thing is that we dont have enough of an economic manufacturing base to do what we did in WW2. We could not fight that war today. we have become a nation of couch potatos, me included. I fear someones going to come along and mash us.

Thanks Spacecannon Sorry for the link problem.

Here is the complete article as a paste.

China’s Complete Control Of Global High-Tech Magnet Industry Raises U.S. National Security Alarms

By Richard McCormack
richard@manufacturingnews.com

Reports of China's impending decision to restrict exports of rare-earth minerals has suddenly awoken the U.S. government to its dependence on China for virtually all of the permanent magnets and rare-earth materials used throughout the defense industrial complex. China controls more than 95 percent of the world's supply of rare-earth permanent magnets.

High-profile articles in major newspapers describing China's intention to restrict or end exports of rare-earth minerals have thrust a critical light on the Pentagon's policies that have embraced cheap global production and that downplayed or ignored the potential negative national security implications of the loss of U.S. industrial capabilities.

Executives working in the U.S. rare-earth metals industries have been warning the Pentagon for years that the country no longer had the ability to produce the powerful magnets that are used in virtually every weapon system and a vast array of consumer and industrial goods. The rare-earth magnet industry is the most vulnerable, since the U.S. has lost almost its entire production capability over the past six years.

Congress has perked up, barely and belatedly, calling for a study. In the Senate version of the Defense Authorization Bill for 2010 (S-1390), Sen. Evan Bayh (D-Ind.) has requested a report from the Pentagon's Defense Science Board to determine the extent to which weapons systems are currently dependent upon rare-earth materials "by sources that could be interrupted." He wants the Pentagon to describe the risks involved in U.S. dependence on foreign sources of these materials, and any steps the Department of Defense has taken or plans to take to address risks to national security.

According to those in the industry, it won't be any time soon before the United States rebuilds an extensive and technically complicated supply chain for rare-earth minerals, especially for the powerful neodymium-iron-boron permanent magnets used throughout the defense, industrial and consumer goods sectors.

The main problem, they say, is that the U.S. manufacturing knowledge base has virtually disappeared along with the industry. Most of the knowledge of how to manufacture high-tech magnets was in the heads of the people working the industry, and they are gone. "Without the ability to manufacture, we lose the ability to innovate," says Ed Richardson, vice president of Thomas & Skinner, an Indianapolis producer of permanent magnets made from alnico (aluminum, nickel and cobalt).

Those doing the study "are going to be shocked because it is going to be much easier to find where these materials are not being used than where they are being used," says Richardson. The strongest of all permanent magnets is neodymium-iron-boron, for which there is not a single U.S. producer. By contrast, there are 100 producers of these magnets in China, according to Peter Dent of Electron Energy Corp. of Landisville, Penn.

Neodymium-iron-boron magnets are used in every computer hard drive. "What doesn't have a hard drive?" Richardson asks. "They are going to find that these rare-earth magnets are used everywhere and then they are going to say, ‘Uh, oh, we have to do something.' "

The industry has been warning DOD for years of its vulnerability. But to no avail. The most recent "Foreign Sources of Supply" report produced by President Bush's Undersecretary of Defense for Industrial Policy claims that "the Department is not acquiring military materiel produced overseas to the detriment of national security or the U.S. defense industrial base….The record indicates there has been no difference in the reliability between the Department's U.S. and non-U.S. suppliers." It goes on to state: "The Department incorporates foreign items and components into many important systems, and in some cases the Department may be dependent upon foreign suppliers for these items. However, this does not mean the Department suffers from a foreign vulnerability. Foreign dependence usually does not equate to foreign vulnerability. The Department is not vulnerable if it is dependent on reliable foreign suppliers, just as it is not vulnerable when it is dependent on reliable domestic suppliers. The Department of Defense is not aware of any foreign vulnerabilities within its supply chains."

That policy, which has benefited the large defense contractors, has riled American producers of basic industrial products like printed circuit boards and specialty metals. This "market view of reality [was] installed in the heart of our Defense Department," says Jim Kennedy, president of Wings Enterprises, a company that owns the only known heavy rare-earth oxide deposit in the United States in Washington County, Mo. The free-market orientation of the government in the area of military security "has no historical precedent and is a total farce -- an ideology that feeds financiers and multinational corporations and has led to America being a ‘service' wasteland," says Kennedy.

The U.S. industry has been "decimated by China's unfair trade practices," adds the recently created United States Magnetic Materials Association. "Currently, China dominates the magnet materials industry and has successfully manipulated the rare earths metals market."

China is acting it its own best interests. With growing global demand and China controlling 97 percent of the global market for mining rare-earth metals (and nearly 100 percent of the conversion of ore to metal), China could reach its production capacity by 2012. Its Ministry of Industry and Information Technology has issued a draft industrial policy that calls for a "total ban on [the export of] some rare-earth elements in the near future, cutting off the international community's access to vital materials," says the Magnetic Materials Association. By doing so, China will supply only Chinese users, which means that foreign manufacturers that use rare-earth minerals in their products will be induced to open manufacturing operations in China.

According to a September 2009 report from the United States Geological Survey ("2007 Minerals Yearbook Rare Earths [Advance Release]") rare-earth minerals are used in rechargeable batteries that are in camcorders, cell phones, PDAs, laptop computers and other portable devices. Rare-earth minerals are used in wind turbines, drinking water filters, petrochemical catalysts, in polishing powders, hydrogen storage, fluorescent lighting, flat panels, color televisions, glass, ceramics and automotive catalysts. They are used in fiberoptics, dental and surgical lasers, MRI systems, as medical contrast agents, in medical isotopes and in positron emission tomography scintillation detectors. They are important in magnetic refrigeration and in the fast-growing world of rechargeable batteries used in hybrid vehicles. Permanent magnets make electric motors more efficient and light.

In the military sector, rare-earth permanent magnets are used in internal guidance systems, microwave communications systems, radar and motors and generators that power aircraft and ships. They are used in actuators for electric propulsion, in space systems and in nuclear reactors -- in pumps and control rod actuators. They are found in missiles (Trident, Minuteman, Patriot, AIM, AMRAAM and Tomahawk); in the Aegis destroyer radar; in M1A1 Tanks; and in the Bradley, Paladin Howitzer, Apache Stryker, Humvee, F-15, F-16 F-18, B-52, towed decoys, Joint Strike Fighter and Predator weapons systems.

"Existing production is currently not sufficient to meet world demand," says the U.S. Geological Survey. In the second sentence of its report, the USGS states: "Rare earths were not mined in the United States in 2007." It also notes that "the last of the U.S. government stocks of rare earths in the National Defense Stockpile was shipped in 1998."

In 1999, Chinese president Jiang Zemin stated that China would "improve the development and application of rare earths and change the resource advantage into economic superiority." In 1992 Chinese president Deng Xiaoping said: "There is oil in the Middle East; there are rare earths in China. We must take full advantage of this resource."

The total worldwide market size for rare-earth magnetic materials was $9.1 billion in 2007 and is projected to grow to $12 billion in 2011 and to $21 billion by 2020, according to Peter Dent of Electron Energy Corp.

In the 1990s, U.S. magnetic materials producers employed 6,000 workers. There were five alnico magnet producers; five samarium-cobalt magnet producers; four neodymium-iron-boron magnet producers; and many suppliers. But the industry has unraveled. By last year, there were only 500 workers remaining in the U.S. industry, with three alnico magnet producers, one samarium-cobalt magnet producer and zero neodymium-iron -boron magnet producers.

The U.S. industry has long warned of potential supply disruptions, but China's recent plans to curtail exports makes the situation "dire," says Richardson of Thomas & Skinner. "We've been talking about this since the Mountain Pass [Calif.] mine closed [in 2002] and the last neodymium-iron-boron magnet manufacturer closed in 2005," he says. "Once that happened we knew we were in trouble."

But things got worse. In 2003, the former GM subsidiary Magnequench plant closed in Indiana, laying off 225 workers, and moved its equipment to China. Shortly thereafter, VAC closed its Elizabethtown, Ky., operations. In 2004, China National Offshore Oil Corp. tried to purchase Unocal, the owner of Molycorp and the Mountain Pass mine. In 2005, Hitachi closed its Edmore, Mich., production facility, which it acquired from General Electric in the 1990s.

What is to be done? "We can't just fly out and do something without some basis for it," says Richardson.

DOD's study on rare earths is a good first step. It needs to include the U.S. Geological Survey and the Department of Energy, since the next generation automobile depends on the availability of rare-earth minerals. "They have to determine a baseline before they can develop a strategy," says Jeff Green of the magnetics trade association. At some point there will need to be a combination of public and private invest-ment to reestablish the North American supply chain

"If you look at what is left of the North American industry, all of the players exist," says Green. "It's a matter of bringing them together in a way that creates a competitive marketplace." Incentives will have to be put in place to entice private investment, and there will need to be new policies "that deal with trade or domestic preference regimes or the Defense Production Act," says Green. "Unless there is a strategy that creates some type of sustainable market, then it won't work."

Mark Smith, CEO of Molycorp Minerals LLC, which owns the Mountain Pass mine, says "federal leadership is required." Congress and President Obama must "commit to directly addressing the capability gaps between rare-earth mining and magnet production." They can do this by promoting science, technology, infrastructure investment, direct capital assistance and loan guarantees.

Richardson says what he finds "disturbing" is that there are U.S. producers claiming they can solve the problem "just by having the government give them a whole big chunk of money." Such an effort would likely fail. "It is not accurate for one company to say they can solve the problem of the entire supply chain," says Richardson. It's one thing to mine ore, it's another to process it and refine it for use by industrial companies. "It's going to be many years and a lot of money -- millions of dollars to reconstruct this value chain," says Richardson. "If we don't talk about our industry as being a cluster of businesses that need to work together to enable the United States to manufacture magnets, and that this cluster needs a comprehensive industrial policy that takes all of the elements into consideration, then we will be flailing in the water."

It would be nice if there were industrial policy specialists in the Pentagon who could do the hard work of crafting viable strategies for an industrial revival, Richardson notes. "Don't get me wrong, it's a monumental job, but if it's something you work on every day and you have good ideas of what the risks are and where the weak points are, then after several years you might get good at it and maybe after five or 10 years you might have something that is pretty valuable. Unfortunately, there is nothing. We have been fighting with the very people who would do this just to keep alive what we already have."

The USGS study is at http://minerals.usgs.gov/min erals/pubs/commodity/rare_earths/myb1-2007-raree.pdf.

Wow, Kevinm, good article, thx

after reading it though I find myself even more despondent on the employment outlook, nothing like facts to help one get a good idea of what the future has in store for the US.

Perhaps we should start a blog on bunker building and survival engineering?

Spacecannon

Opportunity will change that if enough people demand it by insisting on on-shore manufacturing.

After several bad production parts from off-shore I finally put my foot down and demanded our buyer stop sourcing machined parts from China. Some of the parts were excellent, but the quality has not been consistent and varies from excellent to absolute junk. Coupled with the long lead time for shipping and any savings have totally evaporated.

We are now using local machine shops to turn our parts and the quality and service is first rate.

A.H.,

I respect you man, but who is going to demand on-shore Mfg? The public, they are only loyal to the product they themselves happen tobe manufacturing, too many support wallmart. Our mfgrs? some will, like yourself, but on the whole they are too small of a percentage of the aggregate to have an effect. We might bring jobs and Mfg back if the dollar is devalued enough and our quality of life drops to that of mexico or china, then our labor costs will drop also, but then no-one will be able to afford the inflated cost of housing, its a vicious circle with a catch 22 at the end. Hope you have something soft to land on.

Spacecannon

China is one of a few countries that are artificially manipulating their Yuan and not letting it float with the rest of the world's economy.

This is great for China's export, but it tilts the playing field unfavorably for the rest of us. There are ongoing talks to fix this. We will have to wait and see if they bring fruit.

However, many companies (mine included) are not finding a pot of gold at the end of the Chinese rainbow. I don't know the magnitude of that shift, but there is a shift. I doubt it will be enough to rescue or economy, but it should at least help.