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Stock Ideas Investors Daily Edge Unemployment Is Only Part Of The Problem, What About Underemployment?
Stock Ideas Investors Daily Edge Unemployment Is Only Part Of The Problem, What About Underemployment? 
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| Unemployment Is Only Part Of The Problem, What About Underemployment? |
| Thursday, 08 January 2009 | ||||||||
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“Alcoa to cut 13,500 jobs”… another recession headline confirms unemployment will continue to get worse for a while yet. Outright cuts make the big news. But some companies hitting rough times have taken a gentler approach. Their workers have kept their jobs… But their paychecks are shrinking. More and more Americans have become involuntary part timers. Some of these half-fortunate workers looked for full time work, but were only able to find part-time employment. Most of them are still in the same job but working less. Goodbye to the rich time-and-a-half overtime work. These involuntary part-timers are even losing straight-time hours. An involuntary part-timer, also known as an “underemployed” person in the statistics, is someone who wanted a full-time job but works 35 or fewer hours per week. In the past 12 months, involuntary part-timers have increased 62% to over 7 million U.S. workers. The Bureau of Labor Statistics keeps the records. Once a month, BLS reports the employment conditions and we’re all made instantly aware of part of the story—how many people are unemployed and whether that number rose or fell. The unemployed are headline news. The underemployed are doubly forgotten, slipping behind the economic race and unnoticed by most newscasters. In addition to underemployment, BLS also keeps track of the number of workers compared to the number of working age people. That ratio spells trouble, too. In December 2006, the employment-to-population ratio was 63.4%. It was down to 61.6% in the latest data, for November 2008. Underemployment and the employment-to-population ratio both began to get worse in late 2006 to early 2007. This was well before the December 2007 date that the National Bureau of Economic Research set as the beginning of the current recession. This is a typical pattern. The bad news quietly comes early to a few. But the good news is that these two measures usually improve before everyone is aware that a recession has ended.
 Coming out of a recession, as work and orders pick up again, employers are still cautious. They are apt to expand current employees’ working hours and grant more overtime… they hesitate to take on additional employees too soon. If you’d like to avoid the industries and parts of the economy that are most adversely affected by these trends, it’s pretty easy. Retail, restaurants and construction are the hardest hit areas. And if you think you can escape it all by beefing up your non-U.S. investments, you could be fooled. Manpower’s global employment outlook predicts lower hiring rates in India, Singapore and Taiwan. Manpower surveys 71,000 international CEOs to come up with its employment outlook. Thus the survey gives a very broad picture. If you plan to diversify globally, it might be a good idea to take note of where the outlook is strongest. Employers most likely to increase hiring in the coming quarter are found in Peru, Costa Rica, Canada, Romania, Colombia, South Africa, Australia, Poland, the United States and China. Looks like sticking close to home is again a good idea. As the world follows the U.S. into recession, it is likely to follow the U.S. out as well this time around. [Ed. Note: For more companies that can protect and grow your wealth, check out Lynn Carpenter's Rising Tide Letter. She recommends companies that consistently deliver outstanding results. Click here for more info.] P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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