It’s better in to live in your mother’s basement, drink beer and play video games all day than to major in English or sociology, go into debt and then live in the basement, says Aaron Clarey, author of Worthless: The Young Person’s Indispensable Guide to Choosing the Right Major.
Discouraged by long-term unemployment, more Americans are dropping out of the workforce, at least for awhile, reports AP. Some are taking early retirement or applying for disability benefits. Others are enrolling in community college — or graduate school — in hopes of returning to the job market with stronger skills.
. . . the number of Americans in the labor force — those who have a job or are looking for one — fell by nearly half a million people from February to March, the government said Friday. And the percentage of working-age adults in the labor force — what’s called the participation rate — fell to 63.3 percent last month. It’s the lowest such figure since May 1979.
The unemployment rate dropped to a four-year low of 7.6 percent in March from 7.7 in February, but only because people who’ve stopped looking for a job aren’t counted as unemployed. The unemployment rate would have risen to 7.9 percent in March if 496,000 workers hadn’t given up their job search.
Even Americans of prime working age — 25 to 54 years old — are dropping out of the workforce. Their participation rate fell to 81.1 percent last month, tied with November for the lowest since December 1984.
. . .Young people are leaving the job market, too. The participation rate for Americans ages 20 to 24 hit a 41-year low 69.6 percent last year before bouncing back a bit. Many young people have enrolled in community colleges and universities. That’s one reason a record 63 percent of adults ages 25 to 29 have spent at least some time in college, according to the Pew Research Center.
Doug Damato, 40, who lives in Asheville, N.C., lost his job as an installer at a utility company in February 2012. That fall, he began studying mechanical engineering at Asheville-Buncombe Technical Community College. When his unemployment benefits run out in July, he hopes to find a night job so he can complete his degree.
Recent four-year college graduates are struggling in the job market, but it’s a lot worse for job seekers with only a high school diploma or associate degree, concludes a Pew report.
Before the recession, just over half of young adults with a high school degree (HS) were employed, compared to almost two-thirds of those with an associate degree (AA) and nearly three-fourths of those with a bachelor’s degree (BA).
Job losses during the recession made existing employment gaps even worse. The employment declines for those with HS and AA degrees were 16 and 11 percent, respectively, compared with 7 percent for those with a BA degree.
Pew did not find “a sharp increase” in four-year graduates taking low-skill or low-wage jobs — or going to graduate school.
The “skills gap” is no big deal now — but it could be in the future, if we don’t take steps to train new workers, writes Harold Sirkin, a Boston Consulting Group partner, in Businessweek.
The shortage of skilled welders, machinists, and industrial machinery mechanics represents less than 1 percent of U.S. manufacturing workers, Sirkin estimates. Only seven states and five cities – Baton Rouge, Charlotte, Miami, San Antonio, and Wichita — have significant shortages.
However, that could change in the next 10 years as manufacturing grows and baby boomers retire. The average high-skilled manufacturing worker in the U.S. is 56 years old, according to government data.
Technical and community colleges are working with employers to train workers in some parts of the country, Sirkin writes.
In Georgia, for example, a program called Quick Start provides companies with customized workforce training and retraining, free of charge, in partnership with the state’s technical colleges.
Here in Chicago, the Austin Polytechnical Academy teaches students all aspects of industry and has its own manufacturing training center.
“Most high-skill manufacturing jobs require only a high school education and on-the-job training,” yet few companies recruit in high schools, Sirkin writes. And manufacturing doesn’t appeal to young people seeking bachelor’s degrees, even though half of recent college graduates are unemployed or underemployed.
The question we need to ask bright young people today is this: Would they be better off with a college degree in mass communication, “poli sci,” or sociology that gets them a job as a retail clerk or waiting tables, or would they be better off with a real skill that qualifies them for a high-paying manufacturing job?
After years of high unemployment and rising college costs, students are wising up about borrowing for a degree in what we used to call “fuzzy studies.” But advanced manufacturing — and other technical careers — may not be open to students with weak math and science skills.
President Obama touts job retraining at community colleges to enable laid-off workers to close the “skills gap.” Mitt Romney agrees that job retraining is the answer. But job training may not help — in fact, it may hurt — if there are few jobs in the local economy, writes Amy Goldstein for Pro Publica.
When the GM factory closed in Janesville, Wisconsin, Blackhawk Technical College stepped up to the challenge.
. . . instead of preparing some students to go on to universities, (Blackhawk) offers only vocational programs, teaching its students to be welders, IT specialists, and medical lab technicians, and to go into advanced manufacturing – precisely the skills that Obama has been touting for retraining programs. As the president and others urge two-year colleges to become partners with local businesses, to try to navigate laid-off workers into fields in which jobs are most likely to exist, Blackhawk already has been doing that for years.
. . . Trying to allay the anxiety of workers coming back to school, the college held a community picnic for families with games for the children and a chance for the adults to talk with deans and instructors over hamburgers and hot dogs. It added 88 class sections, hired extra instructors, borrowed financial aid officers from other schools and, when it ran out of classrooms, added Saturday sessions.
About one-third of workers who lost jobs in the recession have pursued some form of retraining—at two-year colleges and elsewhere— Goldstein estimates. But research on job retraining’s effectiveness is “thin and mixed.” A large federal study found displaced workers who trained under the Workforce Investment Act took years to catch up with similar people who hadn’t gone back to school.
In Janesville, the laid-off workers who took job training classes at Blackhawk are working less and earning less than their laid-off co-workers who didn’t go back to school.
Those who didn’t retrain saw their pay fall by 8 percent. Retrained workers who found jobs lost 36 percent of their former paychecks.
One possibility is that the laid-off people best able to get another job did, while those who were less desirable to employers went to Blackhawk. Or it could be that the advantages from retraining are just slow to materialize . . .
Another possibility is that people who didn’t invest a year or two in education snapped up jobs that were gone by the time those who went to Blackhawk began searching for work.
“If you don’t have enough jobs….you cannot train your way to victory,” Laura Dresser, a University of Wisconsin labor economist told Goldstein.
Only a third of dislocated workers who enrolled at Blackhawk managed to graduate, but graduates were no more likely to be working than drop-outs. (Some people dropped out to take a job offer.)
Blackhawk used a $2 million federal grant to create a special program for 125 students. The college-ready were steered into training for information technology or clinical lab technology, both considered high-demand fields. Remedial students spent a semester in class learning basic skils with lots of tutoring and “handholding.” Then they got 10 weeks of training to earn a certificate to work as a nursing assistant or welder, or in business.
Graduates in clinical lab technology and welding are finding jobs, but overall Blackhawk students who studied in high-demand fields are no more likely to be working than other students. One ex-factory worker earned an IT degree, but discovered there’s no need for IT specialists in Janesville. He’s working in a grocery store deli.
Years ago, when I reported on welfare-to-work programs for the San Jose Mercury News, I learned that welfare recipients who were pushed into entry-level jobs worked more and earned more several years later compared to similar people sent to education or training programs. “Work first” became the mantra of welfare reform. You’d think job retraining would be more effective for laid-off workers, who have lots of work experience already. But not if they’re training for nonexistent jobs.
Under pressure from an online petition, Sallie Mae, the nation’s largest private student-loan provider, will stop charging a $50 quarterly fee to unemployed borrowers who’ve asked for forbearance, reports the New York Times.
The “good faith deposit” now will be credited to the borrower’s account.
Stef Gray, 23, a New Yorker who owes $600 a month on four loans, saw it as a predatory effort to squeeze blood from a generation of turnips — graduates already buried under a mountain of student debt. In November, she started a petition, “Tell Sallie Mae: Stop the Unemployment Penalty,” with Change.org., a group based in San Francisco.
“Sallie Mae is preying on people like me and cashing in on the fact that we need more time to find work before we can repay our student loans,” it said.
Despite working while in college, Gray borrowed $40,000 to earn a bachelor’s and master’s degree in geography. With interest, she now owes more than $65,000. Despite her expertise in geographic information systems, she’s been unable to find a job analyzing census or health statistics.
Orphaned as a child, she didn’t understand the difference between federal and private loans when she borrowed, she said.
Tell Sallie Mae: Stop the Unemployment Penalty demands a Change.org petition by Stef Gray, a recent public college graduate who borrowed at 9.75 percent to pay college costs.
I graduated in May with honors, but even with an advanced degree in a technical field, I still haven’t found full-time work. I’m doing everything I can to avoid defaulting on my loans, but Sallie Mae has charged me hundreds of dollars in extra fees because I’ve had to delay my payments (called forbearance).
While federal loans let the unemployed defer payments without fees, Sallie Mae charges $50 per loan every three months, writes Gray, who has three loans that can’t be consolidated. Meanwhile, interest is accruing.
If I don’t find full-time work before the end of January, Sallie Mae is going to charge me another $150 in “forbearance fees” — while my total debt continues to grow by approximately $1,200.
Please join me in asking Sallie Mae to stop double-dipping. Sign my petition calling on Sallie Mae CEO Albert Lord to stop charging forebearance fees to unemployed students wishing to avoid default.
Sallie Mae spokesperson Patricia Christel described the fee as “a good faith deposit that acknowledges the importance of and commitment to resuming payments in the future,” reports the Chronicle of Higher Education.
“When I pay a deposit on my apartment, I get my money back at the end of the lease,” Gray responds. “If this were a ‘deposit,’ borrowers would either get their fees back at the end of the forbearance or the money would be applied to the loan’s balance. Neither of these is true.”
It’s bad out there — very bad — for laid-off workers seeking new jobs, reports the New York Times. Only 7 percent of people who’ve lost jobs in recent years have regained their previous incomes and lifestyles, concludes a study released Friday by the John J. Heldrich Center for Workforce Development at Rutgers. Fifteen percent believe their drastically reduced incomes probably will be permanent.
Though unemployment fell to 8.6 percent in November, most of that came from people leaving the workforce. Employers added only 120,000 jobs. Less-skilled workers — especially men — ave been hit very hard.
After 22 years on the job, (Bill) Loftis, 44, was laid off from a company that produces air filters and valves in Sterling Heights, Mich., three years ago. . . .
Despite applying for more than 100 jobs, he has been unable to find work. He has drained most of his 401(k) retirement fund, amassed credit card debt, and is about to sell his car, a 2006 Dodge Charger. “It’s looking hopeless,” he said.
“The news is strikingly bad,” said Cliff Zukin, a professor of public policy and political science at Rutgers who compiled the study.
What is Happening to America’s Less-Skilled Workers?, a project of Brookings’ Hamilton Project, looks at the importance of education and training, especially for men without a college degree.
The employment rate for male high school graduates has fallen from 96 percent in 1970 to only 75 percent today, as shown below. Median annual earnings are just $26,000 today—about half of the $50,000 the median man with a high school diploma brought home forty years ago.
Workers with only a high school degree now earn about 20 percent less than high-school graduates did 40 years ago.
A Hamilton Project forum advocated two approaches to job training:
Raising Job Quality and Skills for American Workers calls for $2 billion in competitive grants to fund job training for 250,000 disadvantaged workers each year. Community and technical colleges would collaborate with employers to train workers for jobs in well-paid sectors such as truck driving or nursing.
Policies to Reduce High-Tenured Displaced Workers’ Earnings Losses through Retraining focuses on helping experienced workers transition to new careers that pay well.
Some 787,300 associate’s degrees were awardedin 2008-09, a 41 percent increase in a decade. One third of degrees were in liberal arts and sciences, general studies, and humanities; another fifth were in health fields. While psychology degrees more than doubled in 10 years, engineering and engineering technologies, a heavily male field, showed an 8 percent decline.
About 57 percent of all bachelor’s degrees conferred in 2008–09 were awarded to women, the report found.
Long-term unemployment has hit hardest at men with a high school diploma or less. The trends are not good.