November 2010 Jobs Report and Wages

Here are the job market and compensation numbers for November 2010 (based on the job report):


Net gain
of 39,000 jobs in the month

  • Private sector payrolls increased by 50,000
    • Down from 160,000 last month
    • Worst performance in 10 months

  • Analysts expected an overall gain of 150,000
  • September was revised to a loss of 24,000 jobs from an original reading of 95,000 lost and a revised loss of 41,000
  • October was revised to a gain of 172,000 from an original reading of 151,000
  • The revisions for August, September, and October added 145,000 jobs to the economy
  • 6.1
    million people have been jobless for more than 6 months (long term
    unemployed) – virtually unchanged from August, September, and October

    • 41.9% of the unemployed are long term unemployed – inched up from 41.8% last month and 41.7% the month before
  • The main type of hire was for Temporary Help Service (+40,000) and since September of 2009 this employment has improved by 494,000
    • Its normally an indicator of an improving economic cycle, but a year of it indicates uncertain business conditions

  • Job Openings and Labor Turnover Survey (JOLTS), shows that job openings increased by 351,000 in October
  • The total number of job openings in October was 3.4 million, while the total number of unemployed workers was 14.8 million
  • The ratio of unemployed workers to job openings improved to 4.4-to-1 in October

Unemployment rate went up to 9.8%

  • Analysts predicted it would be 9.6%
  • The unemployment rate has been over 9% for 19 months – the longest such streak since the early ’80s
  • The employment to population ratio is 58.2% – relatively unchanged
  • The
    U-6 report, which is a broader group to count (workers who are part
    time but want to be full time and discouraged worker), stayed at 17.0%. This indicates the increase of the unemployment rate to 9.8% is a reflection of more people actively looking for jobs in November (these individuals are only counted if they are actively looking)
  • The unemployment rate for those with a college education is 5.1%
    • Highest in 40 years

  • PMI,
    a measure of manufacturing pace, is 56.6% and the 19th consecutive
    month of readings over 50 percent. Anything above 50% means the
    machines are running
  • Productivity, measured for the quarter, showed tepid growth of 2.3%

Specific Segment Job numbers:

  • Manufacturing lost 13,000 jobs
  • Construction lost 5,000 jobs
  • Retailers lost 28,100 jobs
  • Leisure and Hospitality Services gained 11,000 jobs
  • Government sector lost 11,000, Federal gained 2,000
  • Education and Health Services grew by 30,000 jobs
    • Health Care and Social Assistance grew by 34,000

  • Professional and Business Services grew by 53,000
    • 39.500 jobs added in Temporary Help

Wage (can be revised):

  • The average weekly paycheck (seasonally adjusted) is $642.87 – a decrease of $1.91
  • The average hourly earning (seasonally adjusted) is $19.19
  • Average
    weekly hours and overtime of production and nonsupervisory employees on
    private nonfarm payrolls by industry sector, seasonally adjusted is
    33.5 hours

Bureau of Labor Statistics

Job Report Stats Summary

Scared of Ideas or Open to Change?

He hears the alarm clock, hits snooze, and lays there for ten minutes somewhere between sleep and awake. “In the Hall of the Mountain King” by Edvard Grieg plays:

He does what I think is one of the hardest things in the world to do, he puts the first foot on the floor in the morning. He goes to the bathroom, runs the shower, and peers into the mirror. Everyday its the same. Same time, same song, same struggle. Everyday.

Routines are good for many aspects of our lives. We need to focus on what is different in our environment and routines keep us safe to do so. But the comfort of a routine can be disabling as well. For instance, there’s a field of study called Terror Management Theory and it describes what people do to repress an awareness of mortality. Here’s an excerpt from HarvardBusinessReview.com called Employees See Death When You Change Their Routines which enumerates three means for warding off these thoughts:

Studies show that we create three existential buffers to protect us from this knowledge: Consistency allows us to see the world as orderly, predictable, familiar, and safe. Standards of justice allow us to establish and enforce a code of what’s good and fair. Culture imbues us with the sense that we have contributed to, and are participating in, a larger and enduring system of beliefs.

As a manager it’s important to know which of your employees are lulled into this perceived safe zone and will need some coaxing when change is on the horizon. They’ll want to hold onto the way things are – they’re good at them, they understand what’s expected, and they are familiar – but it’s counterproductive. You’ll need to invest in re-establishing these buffers for them…

Unless they are risk takers. Many entrepreneurs don’t like routines. They want constant change with a little bit of chaos mixed in. Companies like Google seek them out because they tend to be disruptors and a disruption can be a money maker. Just last week the NY Times ran an article about how Google gave 10% raises across the board. Google’s growth has brought with it the bureaucracy of a big company. Some entrepreneurs are fleeing the company. The reason is because they can’t affect change quick enough. Their supply of patience is sapped.

Both types of worker, the comfort in routine and the risk taker, must answer this question posed by Bob Brennan of Iron Mountain to this employees:

What do you recommend we do?

You can get a real sense for who’s invested in moving the company forward, and who’s watching the company go by, with that very simple question.

Q. Why?

A. People lay out problems all the time. If they’ve thought through what should be done from here, then you’ve got somebody who’s in the game, who wants to move, and you can unlock that potential. Bystander apathy or the power of observation, in and of itself, is not very valuable. There are amazingly eloquent diagnosticians throughout the business world. They can break down a problem and say, “Here’s your problem.” But it’s prescriptions that matter. So how do we move from here, and what specifically do you recommend?

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Inspiration and Institutions

Malcolm Gladwell, the author of several best sellers including a favorite of mine The Tipping Point, wrote a New Yorker article last week about the bonds of Social Networking tools like Twitter and Facebook. To explain his point he describes the fears and risks of the “sit in” generation of the 1960s. Social change at that time required a particular type of nerve: courage and restraint. It was needed because the threats, occasionally deadly, were often carried out. They knew they had to endure because their weakness would lead to weakness in others. Gladwell calls these strong bonds.

6.2 million people have been unemployed for more than six months. Being without work for that long is troubling to the mind. Being available in case something comes up and the instability of simply not knowing is tough. Plus it’s lonely. But 6.2 million is a big number and it means there’s probably someone within your community who is in the same predicament. That is where a site called Unemployed-Friends.com comes in. It’s a means for those without work to exchange messages, thoughts, and prospects. But besides the fringe benefits of venting, it’s a market for helping each other. That’s the genius of it, these people have time and unused skills available. And this is just the short term benefit. Strong bonds might be the long term benefit.

When I was about eight years old, I remember the pull the professional wrestling. “Who won Wrestlemania?” I’d ask my dad because it was too late for me to stay up. This was the ’80s and wrestling wasn’t obvious about the scripted action yet. People like Hulk Hogan would get the crowd going with their back stage interviews. In the late ’90s a resurgence followed and people could smell what The Rock was cooking. The camera would pan the stands and see signs with clever sayings like “Hogan was a Flintstone” and “This Space for Rent.” Everyone would chant the catch phrases and nothing would be better than Jerry Lawyler’s high pitch announcement of a surprise wrestler “WHAT?! That’s Stone Cold Steve Austin’s music!” Simply exciting.

But this type of connection is weak. It’d only last while the entertainment was going and then it was time to move on to something else. I think this is what Gladwell was trying to get across with his New Yorker piece. That Twitter and other Social Networks are forms of entertainment and have no lasting kinship. But we are also in a society where the threat of an act is all that is needed. It’s pretty powerful. So getting a few thousand signatures via facebook isn’t the same as a “sit-in” but it sends the message to the offending party that they could be in a costly confrontation. And then they have to decide if it’s worth it.

I mention all this because I think a real test of these tools is underway. The US election cycle for 2012 will begin in about six weeks. About a year later we’ll begin to see a lot of movement around a third party candidate. Thomas Friedman in the NY Times writes about the idea in a Op-Ed piece called Third Party Rising . He should have used a former wrestler as an example – Jesse Ventura ran a grass roots campaign in the mid ’90s, about the time the Rock was cooking, and became governor of Minnesota. Michael Bloomberg might give it a shot, we’ll see, but I don’t think a third party can win, but he can get close, and the mere threat should send shock waves to the Democrat and Republican Parties. From a business perspective, the time is right to capitalize on the on coming need and use of the strong and weak bonds.

Working Thoughts 10/4/08
September 2008 Jobs Report and Wages

He Quit His Job and the World Got Richer – The Khan Academy

There are 1440 minutes in a day. That’s 120 opportunities, in one day, to consume a video from Salman Khan. He’s a game changer for education. He started The Khan Academy , a video tutorial service using only Youtube and his knowledge base. There are 1600+ videos and each one usually runs a little more than 11 minutes.

I often rebuke the notion we are failing at math and science. We can improve, that is for sure, but testing memorization isn’t really learning. Videos like Khan’s help students get their feet on the ground. They can rewatch it, ask questions of their teachers, and cross reference it with Google, Wikipedia, and other traditional resources.

Bill Gates has taken notice as well. The reason is because the teaching methods are simplistic. And because of that, the distribution can go wide. The relative cost and investment is so low that it creates a novel not-for-profit business.

I’m curious about the net positive effect of this type of education. The aggregate benefit of short videos for tutorials, video games for problem solving, music for creativity, and blogs and twitter for cleverness is immense. The structure of learning is not only a class room.

TED Talk: David McCandless from Information is Beautiful

My last post was from the Information is Beautiful website that I’ve used in past. Well coincidentally, David McCandless did a TED talk and his sentiments about the value of data are right on par with my thoughts on it. I recommend watching the video below. You’ll see some interesting stats about fear, military size, and volcanoes.

http://video.ted.com/assets/player/swf/EmbedPlayer.swf

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Billions of Dollars: Giving, Spending, Fighting, Accumulating, Owing, Losing, and Earning

The smart people over to Informationisbeautiful.net created something called a The Billion Dollar-o-Gram . Its a Treemap. I don’t visually get why its called that, but it’s the method for displaying heirarchical data by using nested rectangles.

What I like about it is the relationships. Understanding proportions when talking about big numbers is difficult, so an illustration like the one below helps immensely, especially when people mention a few billion spent on this or a few billion going on that.

I suggest checking out a book by them as well. It’s called The Visual Miscellaneum and it’s $17.81 over at Amazon.com .

One more item about their work, they provide a link to all their supporting data .

Showing the Economy Through Illustrations

The above illustration shows the ramping up of volume of trades on the FSTE starting in late 1997. There is an economic purpose for these markets, but at that volume is it really weeding out the wheat from the chaff which is the point?

But I really wanted to call out the blog Visualizing Economics . It, like Flowing Data , shows stats in an illustrative way. It helps tell the story of the stats.

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“The Gap is Between Doing Nothing and Doing Something”

Clay Shirky in the video below hits on themes that run throughout this blog. His 13:08 of audio/video is time well spent. He mentions:

  • Free Time
    • Couch Potatoes
    • Good at Consuming
  • Creativity – People like to create
    • Cats
  • Intrinsic Motivations
    • Kenya
    • Design for Generosity
  • Tacit Information
    • Crisis Map
  • Communal Value
  • Civic Value
  • Humor

http://video.ted.com/assets/player/swf/EmbedPlayer.swf

The blog Information Is Beautiful did a fun illustration using a stat from the speech – 200 billion hours of Watching TV a year and the time spent working on Wikipedia. Quite the comparison.

What Do You Know about Your Produce?

My last entry talked about how the unemployment numbers were not evenly distributed across education bases. I don’t imagine anyone thought it would be, but my point is that those who lack an education, especially younger workers who lack experience, should be the focus of job programs. I’d like to see education and training programs help this group get meaningful jobs .

But the second part of my last entry was about how many illegal immigrants are doing agricultural work, specifically field work. There’s an idea that illegal immigrants take jobs from American’s. It’s true, but not in every case. The farming example is one where many unemployed American’s haven’t applied.

What I observed about my own thinking on the subject is that I had little idea how produce reaches my grocery store. Some of it could come from local growers and some can come from China or somewhere like that. I’m not trying to sound ridiculous, but for some reason I also think of farming like I do manufacturing – automated. For grains that is probably true, but for fruits it isn’t. Someone has to bend over and pick the strawberries, blueberries, or tomatoes .

I was recently reminded about a NYC law requiring menus at some eateries to display the calories of the dish. The idea being an informed public would make better eating decisions. The notion is correct but the implementation is off. If someone is out to eat, they are purposefully out to enjoy a meal. Calories are down the list of considerations.

What I’d like to see is a narrative on the produce like a label on a cereal box. A short factual story about how the fruit arrived at the grocer. For instance, if it came from 20 miles away I’d like to know. I;d like to know the day it’s picked. If the person who picked it is 34, a female, and works a 35 hour work week, I’d like to know that too. The idea is that if I compared a subsidized bag of apples from China, which is 30 cents cheaper to a locally grown bag, I’d probably go with the locally grown. Even if I’m price sensitive I’d still have to assume the local produce is fresher and therefore higher quality.

Narratives with data in it will help guide decisions. Once the market adjusts to this digestable (pun intended – ha ha) data format, the local demand should increase and jobs too. A win-win for everyone.

Matching a Job Opportunity with the Appropriate Labor

We are in earnings season and so it’s a reasonable time to take the pulse of the economy. Three stalwarts – CSX, Alcoa, and Intel – have already reported strong results and the expectation is for it to continue. If earnings are strong, the next question is when will jobs return?

But is it the right question? I’m not sure it is. The distribution of joblessness is not even and never really is. However, the elevated unemployment numbers are up across the board. There are some stats showing improvement, but it’s slight.

June 2009 Feb 2010 March 2010 April 2010 May 2010 June 2010
Less than a HS Diploma

15.4

15.6

14.5

14.7

15

14.1

HS Grad,  no college

9.8

10.5

10.8

10.6

10.9

10.8

Some college, associate degree

8

8

8.2

8.3

8.3

8.2

Bachelor degree

4.7

5

4.9

4.9

4.7

4.4

And the stats for young workers (under 25 years old) are very high as well.

I often comment that I feel educational resources are not worthwhile for our population of less knowledgeable workers. I generalize the group as the local workers – those that fill roles in the employment ecosystem that have to be performed in a specific location. Construction work is an example. But one angle I haven’t considered in a couple of years is the idea that certain jobs are undesirable and are left to illegal immigrants.

The United Farm Workers labor union is running a campaign called Take Our Jobs which is an effort to highlight the situation of unemployment and illegal workers. It’s easy to think these workers are taking an opportunity from an American, but the reality is the conditions are so tough that very few US Citizens will perform the work. This is literally field work in occasionally 100+ degrees for 40 plus hours a week.

These jobs, as they stand today, keep food prices low, but we can’t have it both ways. We can’t expect to end illegal immigration like what Arizona has proposed, give Americans the jobs, and keep the conditions the same. Improving conditions will entice more American applications for this work, but it will increase the cost of the output – food. Acknowledging these market forces and allowing “guest” laborers is the right path to incrementally improving the conditions and slowly making this job attractive to those that account for the 10%+ unemployed. Or maybe things just aren’t desperate enough?

Here’s a video from The Stephen Colbert Show

The Colbert Report Mon – Thurs 11:30pm / 10:30c
Arturo Rodriguez
www.colbertnation.com
http://media.mtvnservices.com/mgid:cms:item:comedycentral.com:340925
Colbert Report Full Episodes 2010 Election Fox News

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