Let’s start with the good news first. Wall Street analysts and jobs forecasters were (pleasantly) surprised by the government’s official job’s report released yesterday, which indicated that the American economy created an estimated 236,000 jobs last month. These numbers were a surprise to analysts because “they expected hiring to downshift in early 2013 because of ongoing U.S. budget disputes, the onset of higher tax rates and the looming threat of federal spending cuts that took effect in March” (“U.S. Economy Adds 236,000 Jobs In February”). According to the U.S. Department of Labor, the biggest increases in hiring occurred in professional services (73,000), construction (48,000), health care (32,000) and retail (24,000). On the surface, this is good news, as it infuses those seeking jobs a level of hope that employers are actually picking up the pace in hiring, and that they might actually land a much-coveted job in this still tough economy. However, these numbers provide a cautionary tale of how facts, figures, and semantics can often obscure the reality for—for example—job hunters on the ground.
Yesterday’s government jobs’ numbers routinely reflect a complicated mix of official projections, estimations, and tangible numbers that are calculated (from the Bureau of Labor Statistics) to reach such conclusions. And despite calls from conspiratorial quarters which suggest that presidential administrations can actually fudge the numbers to their political benefit, the government uses the same criteria for assessing projected jobs numbers that they've been using since the 1940s. Today’s revealed 7.7% unemployment rate represents the aggregate the 12 million people who are known to be actively looking for work, but cannot any. This is what the government refers to as the “official” unemployment rate known as the U-3 rate. However, many Americans who struggle to find work know that there is a different reality other than the “reality” monthly official government numbers represent (I allude to this point in some part on one of my sister blogs, “Employers…Shut Up And Listen”). Take the hiring process. More and more employers are employing the practice of many multiple interviews in order to fill limited slots with qualified job candidates. One former human resources insider reveals that the well-known and increasingly used practice is known as “chasing that purple squirrel…a human resources term for an impossibly qualified job applicant” (See: “With Positions to Fill, Employers Waiting For Perfection”). And with the current economy representing an employers’ market,
But there’s also little pressure to hire right now, so long as candidates are abundant and existing staff members are afraid to refuse the extra workload created by an unfilled position. Employers can keep dragging out the hiring process until they’re more confident about their business — or at least until they find the superstar candidate.
Much in the way of the current hiring process seems to be more of a drain on employers’ resources than a legitimate screening process for a legitimate job applicant. One out-of-work video editor recalled the hurdles that he had to circumvent 8- and 9- round job interviews for a position which precisely matched his skills and experience. The applicant had
taken several video-editing tests, which he says he aced. But he has also been subjected to a battery of personality and psychological exams, a spelling quiz and even a math test (including a question that began, to the best of his recollection, “If John is on a train traveling from New York at 40 miles per hour, and Susie is on a train from Boston...”). He passed the math test with a 90 percent score.
This stringing-along-the-applicant process (with no call-backs) contributes to job searchers in many instances finally giving up looking for work. The unemployment rate that includes these disgruntled job searchers as well as those part-time workers looking for full-time work is what’s known in government circles as the U-6 rate. This rate is said to represent the true unemployment rate as it reflects the 8 million more individuals from these latter categories. Factoring in these job seekers that employers’ hiring practices dissuade means that the actual unemployment rate is an estimated 14.3%, as opposed to the 7.7% reported yesterday (See: Bureau of Labor Statistics website for rates that include these numbers).
The upshot is that the government’s reported numbers—particularly in the case of employment—should be taken with a little scrutiny, and great deal of due diligence on the part of the American citizen in order to sort the fact behind them. In many cases, there are statistics, and there is a level of inconsistent reality on the ground which tends to render such figures almost abstract. Shrinking unemployment numbers are good, but too many employers are making it too hard for job seekers to find work. According to a survey from Manpower, some 3 million jobs go unfilled from any given year-to-year because of employer’s inability to find qualified individuals. But such a figure seems to stand in contrast to the reality when employers are requiring qualified candidates to return for multiple rounds of interviews, only not to be offered a position; clearly many job applicants have the skills employers are seeking if employers are requiring job seekers to spent so much of their precious time and expense (such as high gasoline costs) to jump through hoops. The video editor who went through the multi, multiple-round interviews calculates that the three positions he applied for cost him $520.36 in parking fees, two parking tickets, gas and trips to Starbucks while waiting for his interviews. Clearly employers don’t take such details into consideration when requiring job applicants to go through such rigors for a coveted position.
What's more, data from Glassdoor.com, a site that collects information on hiring at different companies, shows that the average duration of the interview process at other major companies like Starbucks, General Mills and Southwest Airlines has roughly doubled in the last couple of years. So it's not just high-tech, specialized employers who are requiring more in the way of excessive prospect weeding-out.
Another disproven aspect of the unemployment numbers is the notion that infusing American businesses with more tax-breaks in order to spur both growth and hiring is a non-factor. According to most recent figures, American companies are sitting on trillions of dollars of cash reserves, many of them holding back on hiring new workers until the economy stabilizes to a satisfying level (“The $5 Trillion Stash: U.S. Corporations' Money Hoard Is Bigger Than the GDP of Germany”). If companies are not reinvesting their already ample case reserves into growth and hiring, there is no rational expectation that an infusion of more cash reserves in the way of (more) tax breaks would spur them to do the same. Such thinking almost defies common sense.
When it comes to the monthly employment numbers, Americans should—as they should any other statistic from the government, the various political parties, and employers themselves—take the time to look below the partisan hype and promotion of “great times” or “doom-n-gloom.” Solutions are simple; implementing them is a matter of will and clear thinking, not policy.
See also: "A Criticism of Employers in America," "Employers…Shut Up And Listen!," and "Employers…Shut Up And Listen, Too!").