The Herman Trend Alert enewsletter (sorry, no link) takes a look at last week’s unemployment numbers. Some interesting items in there (emphasis mine):
This increase in unemployment continues to mask the real situation. Looking at the BLS’ Household Survey, in the month of May, the national unemployment percentages among adult men and women were 4.9 and 4.8. At the same time, the rate for teenagers, ages 16 to 19 jumped from 15.4 in April to 18.7 in May, an increase of 21.4 percent. While part of this increase is due to high school and community college graduations, these new job seekers do not account for this huge increase. Rather, we believe that something else is happening.
We believe that employers are holding on to their skilled, experienced workers and those with lower skill levels are considered more expendable and easier to hire back—as employees or contractors—when conditions improve.
What these data reflect is that the US has a real problem with its under-resourced schools—schools that are either not engaging students enough to keep them there or preparing them for the job market.
I think that last sentence is right – schools are not doing a good enough job preparing students for the job market. One other note – how can these numbers be analyzed without taking into account the increased minimum wage? The minimum wage is scheduled to increase again so I suspect companies are not hiring entry-level employees (16 to 19 year-olds) at the same level.
Whatever the explanation, 5.5% unemployment is a historically low number despite what the media reports.