Unemployment: Good News and Bad News

unemploymentThe jobs report for June, released today by the Labor Dept., has some welcome good news: Employers added 288,000 jobs last month, which is well above the rate of hiring recorded during the first five months of this year. The unemployment rate has ticked down to 6.1 percent, according to the DOL, which is the lowest it’s been since 2008, when the financial crisis hit.

This good news does not, of course, mean that we’ve finally left the economic doldrums behind. Two thirds of the jobs created in June were part-time, the DOL reports, and no doubt many of the employees who took those jobs would rather be employed full-time. As for the unemployment rate, that doesn’t include people who’ve simply given up looking for work. If these people were included in the official unemployment rate, it would actually be 9.6 percent instead of 6.1 percent, according to the Economic Policy Institute.

More distressing still (apologies for being such a gloom-meister right before the national holiday) is a new study from the Boston Consulting Group, which projects that the U.S. will be one of the few economies that is projected to struggle with high unemployment through 2030. It is expected to have a “worker surplus” equal to between 10 percent and 13 percent of its labor force in 2020 (between 17 million and 22 million people) and of 4 percent to 11 percent in 2030. The U.S. must “find ways to better utilize its workforce or it will continue to face relatively high unemployment,” according to the BCG report. “Improvements in training and education, as well as incentives for individuals and businesses to produce workers with the necessary skills and education, are needed to counteract this trend.”

This is one area where our do-nothing Congress (which currently has a sky-high approval rating of 16 percent) might actually do something: As Kecia Bal reported this Monday on HREOnline, the Workforce Innovation and Opportunity Act would reauthorize and amend the Workforce Investment Act with the intention of making it easier for states and local communities to match unemployed workers with the skills and training needed by today’s companies. As we’ve learned the hard way, there’s no magic wand that will solve our current unemployment problem, but maybe if we make better use of our existing resources so that jobs requiring specialized skills no longer go begging even as so many Americans have gotten too discouraged to look for work, we can at least make some serious progress.