Chris Wodke
Remember the soup Nazi from the Seinfeld episode? One miss-step in line and he would yell “No soup for you!” The job hunt these days may feel like that. You may feel like you have been kicked out of the job search line. Your lack of job may not be your fault. The job market is the worst since the Carter administration. Here are some reasons why you job search may be so tough right now:
Job Creation
While the pace of layoffs has slowed, job creation remains sluggish. There are not enough jobs out there to employ the laid off workers. According to the U.S. department of Labor 3.98 million jobs were created in May, while 4.36 million workers were laid off, quit, or were fired. Job openings in May declined 36% from the previous May. This number would be even worse if the government was not doing so much hiring. They account for the biggest number for job creation. The government added 326,000 jobs in May. Gallup reported recently that July job creation was down 40% from a year ago. So the trend continues.
Consumers
Fewer people are quitting their jobs stalling new job openings. Consumer spending is stalled. Consumer spending accounts for 70% of the American economy. Retail sales posted a 5% drop last month over last year. Spending lead us out of the last two recessions. Our economy is largely consumer driven. Consumers have been paying down debt and saving. The savings rates are up for the first time in years. While this is good long term, is has the economy stalled. Spending will likely remain depressed until job numbers improve since many people are nervous about their own jobs.
Business
Gallup reported in July only 24% of organizations were hiring new employees or expanding the size of their workforce. Job creation is worst in the West and best in the South. GDP has fallen for four straight quarters. Until businesses start producing, they won’t be hiring. GM is currently using only 40% of their capacity.
Government
All the spending (stimulus, bailout, tarp) is making businesses and consumers nervous. Only about 10% of the stimulus has been spent. When the massive amount of spending starts to hit, inflation may be triggered. Many organizations are reluctant to add staff with the uncertain economy. Companies are also nervous about potential spending on health care. Benefits currently offered may mean an additional tax from government.
There has also been a lot of anti government rhetoric and talk of higher taxes for business and high income individuals. Companies are reluctant to expand their business and hire when the potential for many new taxes are out there. The Regan administration had it right. They cut taxes and the capital gains and it spurred a huge expansion in the economy.
What can you do in the face of this news? It is even more important to use your network and get a have a good resume. Use your network to find out about openings and get recommend. A recommendation can make all the difference. It minimizes the risk a company takes to hire you. Good luck and keep hunting.
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