Are We In An Employer’s Market?

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employers-marketI am sure you heard we are in a buyer’s market in Real Estate.  It seems we are in an employers market in the job arena.  Unemployment rates are creeping up to around 9.8% up from 6.1% a year earlier while job loss is expected around 180,000 jobs.  Layoffs are slowing down, but hiring has not taken off which means there are hundreds or even thousands of applicants for a single job.

This is good news for employers.  Now they can choose the ideal candidate for every position from entry level to upper management, but what does this mean for the unemployed?

First let’s take a look at how the unemployment numbers are calculated.  Many people believe that the numbers are taken from those collecting unemployment benefits.  This would obviously not be an accurate number because it would not count those still unemployed after the benefits run out.  It would also not count those waiting for benefits to kick in and those that choose not to collect unemployment benefits.

The number comes from surveys of 60,000 homes across the nation.  They are chosen from geographical categories numbering 2,025 in order to get a wide sampling.  The age considered to qualify for the survey is 16 years and above.

Many argue that the rate is actually lower because the survey does count high school students age 16 and above and also counts the retired.

More job loss every month means more people looking for the few places that are hiring.  Other than competition, there are other factors that come into play such as wages.

Over the last 10 years the federal minimum wage has increased from $5.15 to $7.25.  What has this done?  It has made many teenagers unemployable.  With a teenage unemployment rate of 24%, fast food is not longer a sure thing. (Many fast food restaurant now require employees to be bilingual)

Many professionals are finding they no longer qualify for the executive jobs they once held, but are over qualified for lower paying jobs.  That doesn’t make much sense to not hire somebody because they are too qualified for the job, but if the employer is looking for someone that will stay with the company for several months or years they would have better luck hiring someone that just qualifies rather than someone that is taking a 75% pay cut and can do the job of the interviewers manager.

Because the supply of employees is abundant, but the demand is small wages have gone down.  Wages had to come down to help businesses survive.  Now employees are expected to do more for less money than before and the employers can find someone to do it.

What can the unemployed do?  The common answers are go back to school and get more education and that is good advice for a solution in the future, but doesn’t do anything today or even this year.  Now people have to accept lower wages to try to get into a company that allows growth.  They have to start at the bottom of the corporate ladder and work their way back up.  The problem again is they are too qualified to start at the bottom and there are few jobs at the middle or the top.

Self-employment is another answer.  It can often take time and money to get started, but it can also be more rewarding and lucrative for those willing to put in the work.

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