At the beginning of December the Bureau of Labor Statistics announced that unemployment had dropped from 9% to 8.6%, and that the economy had seen a surge of 120,000 new jobs added in November. Although this sounds like great news for the American economy, analysts don’t have the same sunny outlook as the BLS, attributing the drop in unemployment to workers giving up on their job search. Estimates by some analysts predict that about half, or 0.2% of the 0.4%, drop in unemployment can be explained by these discouraged job seekers.
The unemployment rate itself is not what it seems. It’s calculated based on people without jobs who are available to work and who have “actively sought” work in the prior four weeks. The “actively sought” part is a bit hazy, but it includes people who have contacted an employer, employment agency, job center or friends, sent out resumes or filled out applications, or answered or placed ads.
Once a total based on the above is established, it is divided by the total number of people in the labor force, and the result is the unemployment rate. The rate doesn’t include people who are no longer eligible to receive unemployment benefits, or unemployed workers who aren’t put into the “actively seeking” group, as defined above. Because of these factors it is believed that the unemployment rate at any given time is grossly underestimated.
Despite its shortfalls, the unemployment rate is a widely used statistic that won’t be going away anytime soon. Currently there are 14 million unemployed Americans, not including those who have stopped their job search due to frustration. However, it is estimated that up to 600,000 jobs in the manufacturing industry remain unfilled due to a lack of qualified candidates.
To combat the problem of matching qualified workers with employers struggling to find the right candidates, the state of Connecticut launched the Connecticut Manufacturing Job Match Initiative in early November. The Connecticut state Department of Labor received hundreds of applications from unemployed workers with manufacturing skills or a desire to work in the industry; 90 of the applicants were deemed to be “job-ready,” containing the right skills and training to be matched with an employer. The remaining applicants are encouraged to participate in training programs to get them ready for a manufacturing career. More than 40 companies looking to find skilled workers signed up for the program.
The success of the initiative has the Connecticut Department of Labor planning to run the program again, and possibly looking to expand it to other industries. Perhaps more states should follow suit, especially those where manufacturing makes up a large chunk of the economy.
See how we’re helping job seekers prepare for a career in manufacturing through our Manufacturing Scholarship Program with the Cleveland Cavaliers.