TIME politics

Why the Government Is Terrible at Helping You Get a Job

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Vice President Joe Biden watches as President Barack Obama speaks during a signing ceremony for H.R. 803, the Workforce Innovation and Opportunity Act, on July 22, 2014 in the South Court Auditorium of the Eisenhower Executive Office Building, next to the White House in Washington, DC. MANDEL NGAN—AFP/Getty Images

Federal job training programs are stuck in time

This summer, Congress enacted the Workforce Innovation and Opportunity Act (WIOA), which governs the $3 billion or so spent each year by the federal government on job training. Secretary of Labor Thomas Perez announced that the Act would bring U.S. job training into the 21st Century.

I started in the public workforce system in 1979 with a community job training agency and have seen the system improve over the years. Today’s system is more focused on linking training to jobs, in involving employers, in making data on job placement rates more transparent. The new legislation helps nudge along these improvements.

However, WIOA will not significantly change the system or outcomes. Like its predecessors, the Job Training Partnership Act (1982) and the Workforce Investment Act (1998), WIOA involves modest adjustments to job training approaches (despite hundreds of meetings, conferences, and discussions). The same forms of recruitment, assessment, training, and placement will continue, usually by the same training and placement agencies.

Accompanying the enactment of WIOA, Vice President Joe Biden released a highly touted report on the future of job training, “What Works in Job Training: A Synthesis of the Evidence.” The report is mainly a rehash of the same ideas—sector-based training, employer-driven training—that were being discussed in 1979. It’s filled with empty job training government-speak, such as calls for “coordinated strategies across systems” or “flexible, innovative training strategies.”

In contrast to the limited change in the public workforce system, the private sector job training and placement system today is a frenzy of entrepreneurship, creativity, and energy. Much of this entrepreneurship is centered on Internet job training and placement tools.

A recent study by Transmosis, a nonprofit of tech entrepreneurs working on labor and employment, identified over 100 recently established websites aimed at improving the ability of job seekers to identify and apply for jobs, and/or improving the ability of employers to identify candidates who would be good fits. New websites are launching each week.

Some of these websites target specific industries and occupations, such as Doostang (finance) and Proven (hospitality). These sites can only succeed with the participation of employers, so their success hinges on deep knowledge of the industry and what businesses need. Other websites, such as MindSumo, Take the Interview, and Careerflo, enable job seekers to go beyond the traditional resume and supplement their applications with video demonstrations, interviews, and portfolios. Still others, like YesGraph and Work4, expand the ability of job seekers to draw on referrals.

There are websites that are trying to expand the opportunities for internships (InternBound, Koofers, LaunchPath Project) and ones trying to expand the opportunities for project-based work (TaskRabbit, Thumbtack). There are more than 20 major websites aimed at helping job seekers better set and manage career goals.

These Internet tools are aimed at generating revenues, as they must be. But talk to the entrepreneurs behind them and you hear a social mission: improving the labor exchange, matching job seekers and employers, or giving job seekers options beyond the black holes of traditional job boards.

For example, Workpop.com is a Los Angeles start-up founded by Chris Ovitz and Reed Shaffner, who see a better way than the online job boards to connect entry-level restaurant workers (busboys, waiters, bartenders) to job openings. Their site enables workers to apply for jobs through their phones, to store resumes on the site, and to make videos demonstrating what motivates them to do their jobs. Workhands.com, a start-up in San Francisco, is a type of LinkedIn for skilled workers in crafts such as carpentry, welding, and automotive repair. Akimboconnect.com, a start-up in New York and California, helps workers with disabilities better showcase their skills, and helps employers seek out such workers.

To be sure, many of these new websites will not be in operation two or three years from now. Employers have limited funds to spend on job placement, and the number of firms already competing for these dollars is far too many. Other attempts to monetize the job placement services have yet to gain traction.

Still, these entrepreneurs are trying to build a better system, and some will succeed, because they are not about meetings, process, forms. They are about enrolling job seekers, testing ideas, pivoting, adapting, moving on to the next idea.

Their enterprises will never replace the low-tech networking and one-to-one job counseling that remain the best route to employment today. Furthermore, they cannot replace the experience and knowledge that the public workforce has built over the past five decades.

Indeed, the most promising path for better job placement is to integrate the old government workforce system with the innovation of private-sector entrepreneurs. This is starting to happen in Southern California. The South Bay Workforce Investment Board (SBWIB), which oversees the public workforce system in nine cities in south Los Angeles County, has joined with Workpop.com to increase hospitality industry placements, especially for entry-level workers. Workpop is not receiving any public funds—but it is drawing on SBWIB’s research on the hospitality sector and its ability to identify job seekers. SBWIB and its jobseeking clients benefit from Workpop.com’s Internet and mobile tools.

SBWIB director Jan Vogel has been in the training field for nearly 40 years. Rather than be dismissive of the new entrants, he welcomes them. “Partnering with these entrepreneurs enables our job centers to reach more companies and individuals faster and more effectively,” he said. “The new companies optimize the technological spirit that is exploding in California. ”

Michael Bernick is the former director of California’s labor department, the Employment Development Department, and has been involved in job training and placement since 1979. He currently is a Milken Institute Fellow and a contributing editor at Zocalo Public Square, for which he wrote this.

TIME Careers & Workplace

10 Companies That Are Hiring Like Crazy Right Now

Great companies with great job openings

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This post is in partnership with The Muse. The article below was originally published on The Muse.

MONEY The Consumer Economy

The Real Reason You’re Not Shopping at Walmart

Female shopper in Wal-Mart store aisle
Patrick T. Fallon—Bloomberg via Getty Images

Despite the improving job market, workers still don’t have that much walking around cash, which means they have less to spend at retailers.

The summer has not been kind to some of America’s largest retailers.

Traffic at Wal-Mart’s U.S. locations, for instance, was down, while sales at stores that had been open for at least a year failed to grow. Macy’s lowered its full-year sales growth projection, and sales at Kohl’s dropped 1.3% in the last three months. Nordstrom’s earnings per share were basically flat.

If you’re noticing a trend, that’s because there is one: Merchants are struggling.

The Commerce Department recently announced that retail sales decelerated in July for the fourth consecutive month, despite the fact that more workers are finding jobs, and the unemployment rate is hovering around 6%. So what’s going on?

Well, one potential answer is that you, the consumer, just don’t have that money to spend. Yes, employers have added more than 200,000 workers a month to their payrolls since February. And yes, the unemployment rate has dropped to 6.2%—about the same as in September 2008. But workers really haven’t seen the benefits of job growth in their bottom lines.

For instance, take a look at real disposable income for U.S. workers. The year-over-year change in disposable income is only 3.9%, below pre-recession levels. “While stronger job growth has played a role in sustaining consumer spending, the slower income growth has served to keep a lid on real spending activity over the past several quarters,” per a recent Wells Fargo Securities economic report.

disposable income

 

Another way to gauge the plight of workers is a metric called the Employment Cost Index (ECI), which is published by the Bureau of Labor Statistics. The ECI measures what it costs businesses to actually employ their workers—so, wages, salaries and fringe benefits like medical care. Before the Great Recession struck in 2007, the ECI gained nearly 3.5% over the prior 12 months. Since the economic recovery, however, employee costs have not risen above 2%.

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Rising wages are a lagging indicator; people only see raises after the jobs picture improves. Which is happening now. Fewer people are filing unemployment claims, and the number of job openings continues to nudge higher. (And traditionally, job openings have an inverse relationship with wage gains.)

So, hopefully, sometime soon demand will pick up, businesses will start giving their workers substantial raises, and those workers will go out and spend their newfound dollars. (After all, my spending is your income.)

What’s good for the economy is sometimes what’s good for Wal-Mart.

MONEY Employment

Youth Employment Enjoys Summer Surge

Jason Priestley as "Brandon Walsh" working at The Beverly Hills Beach Club in 90210
A summer job at the beach club helped Jason Priestley's "90210" character save money for a new set of wheels. ©Aaron Spelling Productions—Courtesy Everett Collection

The number of employed youth increased by 2.1 million this summer, as many young people took summer jobs or began looking for full time work.

From April to July of this year, the number of employed youth between the ages of 16 and 24 increased by 2.1 million, according to a report released Wednesday by the Bureau of Labor Statistics. The total number of youth employed increased to 20.1 million.

July is usually peak employment time for young people, and the numbers reflect that. At the same time, as the number of 16- to 24-year-olds looking for work increases, so does their demographic’s unemployment rate. The number of unemployed youth also spiked from April to July, rising by 913,000 to 3.4 million, down from 3.8 million last summer.

Overall, youth unemployment declined year over year, but only slightly. Since last July, this group’s unemployment rate declined 2 percentage points, to 14.3%. The labor force participation among young people—the total number working or looking for work—was 60.5%, the same as the previous two summers.

As far as where these young people are working, traditional summer jobs remain the norm. One-quarter of employed youth worked in the leisure and hospitality industry, which includes food services, and another 19% worked in retail.

While summer jobs remain popular, they’re a lot less common than in previous generations. Prior to 1989, the July labor force participation rate for young men was in the 80% range, and the participation rate for young women peaked that year at 72.4%. Since then, however, the labor force participation rate among young people has drastically declined, decreasing by about 20% for men and roughly 15% for women.

 

MONEY Raises

7 Reasons It’s a Great Time to Ask for a Raise

John Gillmoure—Corbis

The sluggish job market is finally kicking into high gear, and that's good news if you are itching for a decent raise this year.

Stocks have been on a bull run since 2009, corporate earnings are soaring, and the housing market is surging. Now the latest economic reports show that the sluggish job market is finally catching up to the rest of the economy.

If you’ve been thinking about making your pitch for a raise, here are seven reasons why now might be the right time.

1. Job openings are highest in more than a decade. After rising for five straight months, the number of available jobs hit 4.7 million, the highest since February 2001, according to the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey, out Tuesday.

2. Competition for jobs is less stiff. There are two unemployed workers per job opening, down from three in the fall and seven during the height of the financial crisis.

3. The number of people quitting jobs—a sign that workers are more confident in landing a new one—is at 2.5 million, the highest since June 2008.

4. The number of jobs being created rose by more than 200,000 for the sixth straight month in July, the longest string of gains since 1997. Meanwhile, unemployment is the lowest since 2008, at 6.2%.

5. Raises are bigger. According to Mercer’s 2014/2015 US Compensation Planning Survey, the average raise in base pay is expected to be 3.0% in 2015, up slightly from 2.9% in 2014, 2.8% in 2013, and 2.7% in 2012. Workers rated above average, a group that accounts for 36% of the workforce, will get salary increases between 3.7% and 4.8% this year, according to Mercer.

6. Temp jobs are turning into full-time gigs. Conversions (giving full-time jobs to temporary workers) are at a three-year high, according to staffing agency Manpower.

7. Employers are really worried about losing talented workers. Turnover is up dramatically: 51% of employers are seeing workers leave, vs. 30% in 2012, according to OI Partners. Nearly three-quarters of employers say they are worried about losing highly skilled workers.

Of course, some of the optimism depends on what industry you’re in. For example, the average raise in the energy sector is projected to be 3.5%, vs. 2.8% for people who work in consumer goods, according to Mercer.

And while the picture is brightening for the long-term unemployed—the number of people without a job for six months or longer fell to 3.16 million in July, vs. 4.25 million a year earlier—it remains twice the number it was before the recession in 2007.

Still, economists are optimistic that salary increases, absent from the rebound in the job market, will finally kick in.

Wage growth is likely be “one of the big stories over the next 12 months,” says Capita Economics chief U.S. economist Paul Ashworth in his latest research note. Among positive signs: a sharp increase in the proportion of small businesses saying that they are planning to raise compensation. And a rising proportion of households in the Conference Board’s consumer confidence survey saying that they expect their incomes to rise, while fewer are saying they expect their incomes to fall.

Tomorrow: We’ll tell you the right moves to make to land a raise as the job market improves.

MONEY Jobs

What’s the Deal with America’s Declining Workforce?

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The dwindling percentage of Americans who are employed or looking for work is partly due to the economy—but mostly not. Here's what that means for the recovery and you.

If you feel like the economy has finally started to gain steam, you’re not alone. U.S. gross domestic product (GDP) grew by 4% last quarter, and today the Labor Department announced that employers added 209,000 jobs in July, after posting 298,000 in June and 229,000 in May.

One theme, though, that has persisted throughout the slow recovery: The share of Americans working or looking for a job is dropping, despite the improving employment picture.

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While this trend has been used to illustrate how sluggish the rebound has been, it actually predates the Great Recession. Today 62.9% of Americans participate in the labor force, compared to 66.1% six years ago and more than 67% in 2000.

So, what exactly is going on?

The White House’s Council of Economic Advisers set out to answer that very question.

Last month, it issued a report dryly titled: “The Labor Force Participation Rate Since 2007: Causes and Policy Implications” in which economists cite three key developments:

#1) America is just getting older

About half of the decline in worker participation over the last seven years is due to demographics — the workforce is simply aging. About one-sixth of the population was at or above retirement age in 2009, according to the report. By 2029, that number will increase to 25%, per the Social Security Administration.

Older workers generally work less than their younger counterparts.

But, interestingly, this group is working more than it used to. From 2007 to 2014 the only age group that saw labor-force participation rates rise was the 55-and-older crowd.

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Why? One reason is this generation of older workers is better educated than its predecessors. In fact, “between 1876 and 1950, the average years of schooling for each birth year cohort increased steadily every year,” per the CEA. More education means higher wages and less physically demanding jobs.

#2) Normal post-recession issues

When the economy is going well, labor participation rates tends to increase. Faster growth means businesses are more apt to hire, which means individuals without jobs feel more confident in their chances of finding work — and hence send out more applications.

When the economy shrinks, this virtuous cycle turns vicious.

“Economic contractions historically result in both greater unemployment and lower labor force participation, as nonparticipants become less likely to enter the labor force and the unemployed (who always exhibit a higher tendency to exit the labor force) become more numerous relative to the unemployed,” per the report.

The CEA estimates that about 16% of the drop in labor force participation rates can be attributed to the fact that fewer people work and look for jobs when the economy is shaky.

#3) Other Stuff

The last third of the decline is traced to two elements — one of which predates the recession, while the other may be a result of it.

The bit related to the Great Recession is long-term unemployment. Right now, more than 3 million workers have been without a job for 27 weeks or longer. While that’s down from almost 7 million in 2010, it’s still 2 million more than before the downturn.

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The other rationale is a combination of long-term trends affecting different groups of workers.

For instance, younger Americans (aged 16-24) — especially those from lower- and middle-income families — have eschewed entering the work force for going to college for years now. As the value of a college education for future earnings increases, more youngsters are hitting the books.

Also, older workers who’ve been hit by the dearth of middle-skilled jobs, according research from Fed economist Christopher Smith, are now taking jobs that would have normally gone to younger workers.

After growing dramatically for the better part of 50 years, the rate of female employment has leveled off and begun to fall since the end of the 20th century, down almost three percentage points.

What’s going on? Well more women are staying home to care for their children, according to the Pew Research Center. In 2012, the percentage of stay-at-home moms increased 6 percentage points to 29% from 13 years earlier.

This is a phenomenon that’s uniquely American.

Since 1991, the participation rate of prime age working females in the Netherlands, Germany, Canada and Japan has all made significant gains, while the U.S.’s has remained flat. “Research has found that family-friendly policies are partially responsible for the rise in participation in other advanced countries, and the lack of these policies explains why the United States has lost ground,” according to the CEA.

women labor force prime

While a higher percentage of women entered the workforce after World War II (until the 2000’s), pretty much the exact opposite is true of males. In 1948 almost 97% of men aged 25-54 worked or were looking for jobs. That number has been declining for over 60 years and is now closer to 88%.

male rate

The causes of this precipitous drop are not exactly clear, although some research shows that the decline is in part due to the fewer jobs based on brawn.

manu

The implications

This picture of the labor market complicates recent reports showing an accelerating economy and increased employment. It also helps explain why the Federal Reserve, led by chair Janet Yellen, isn’t that eager to quickly raise interest rates despite positive economic reports and slightly higher inflation.

And while a certain percentage of the decrease in labor force participation rate can be attributed to the recession, a lot of the decline is bigger than that.

The question now is will Americans return to the labor force in greater numbers without new policies by the Congress and the White House that address long-term headwinds facing American workers?

MONEY

Report: U.S. Adds 209,000 Jobs in July, Unemployment Rate Remains Steady

The U.S. added 209,000 jobs in July, but the unemployment rate remains steady

The U.S. economy added 209,000 new jobs in July, according to the latest employment report from the Bureau of Labor Statistics. The number is slightly lower than the 233,000 jobs some analysts expected. Despite the increase, unemployment ticked up slightly to 6.2%.

The report also showed that the labor force participation rate—the percentage of the working-age population either employed or looking for a job—moving up only slightly to 62.9%, virtually unchanged since April. The number of long-term unemployed, who make up 32.9% of the total unemployed population, also changed little, moving from 3.1 million to 3.2 million.

The BLS revised upwards its May and June employment growth figures, reporting 15,000 more jobs were added in those months than previously reported.

Job growth is always a closely-watched indicator of economic performance, but investors will be paying especially close attention to today’s numbers and what they might mean for interest rates. The Federal Reserve has shown increased confidence in the economy, and recently began phasing out its bond buying program known as quantitative easing.

While Federal Reserve Chair Janet Yellen announced on Thursday that the Fed still had no plans to increase interest rates, citing concerns with the housing market’s slow recovery, many economists believe that strong GDP growth in the last quarter combined with persistent job growth may soon force the central bank’s hand as it seeks to keep inflation from creeping over 2%. The beginnings of a return to pre-recession interest rates would be good sign for the economy as a whole, but some investors may stand to lose money if interests rates rise earlier than expected.

MONEY Raises

Why You Might Get a Raise Soon

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iStock

Good news for workers: Employers think the future is bright

If you’re looking for a raise — or a job — some good fortune might be coming your way. In the second quarter of this year, more employers reported rising wages and expanding payrolls, according to a new survey from the National Association for Business Economics. And businesses expect the economy will keep growing. A quarter of survey respondents now predict that real GDP will go up more than 3% next year.

For its quarterly business conditions survey, the NABE polls its members, which include business leaders, consultants and economists in a range of industries. They say they’re feeling more confident about the state of the economy — and that’s good news for workers.

Ken Simonson, chief economist for the Associated General Contractors of America, says as sales have gone up, businesses have finally needed to hire more employees to keep up with demand. Plus, now that Congress has averted a series of fiscal crises, employers think the economy will continue to grow, so they’ve started making investments again.

That includes investments in labor: This quarter, 43% of NABE’s respondents said their firms offered raises. That’s up from this time last year, when only 19% of respondents saw higher pay. A third of the respondents expect their businesses will raise salaries going forward. Also, 36% of respondents said their firms hired more people this quarter, and 37% expect their businesses to increase payrolls over the next three months.

“Employment has been rising, the unemployment rate has been coming down pretty sharply, so there’s no longer that deep bench of experienced workers,” Simonson says. “Increasingly, companies are having to pay a premium in order to have the best workers, to get anybody who has gone off to a competitor.”

The bad news? Overall demand for workers is still pretty low. Only 22% of respondents said they have a shortage of skilled workers. Compare that to before the recession: In January 2006, 44% of respondents needed more skilled workers.

But while the labor market remains slack, Simonson thinks the trends are positive.

“We’ve been hearing for the past year about companies having trouble finding workers,” Simonson says. “I do expect that at some point this year, we’ll see an acceleration in wage increases.”

MONEY Careers

POLL: How Do You Feel About Your Job?

Last year, less than half of U.S. workers were satisfied with their jobs, according to business research group The Conference Board. Are you one of the happy ones—or are you counting the days until you quit?

 

TIME Race

Study: Little Progress for African-American Men on Racial Equality Since 1970

Rates of incarceration and unemployment remain high

In recent years, the U.S. has celebrated the 50th anniversaries of the March on Washington, the Civil Rights Act and a number of other landmark accomplishments considered pivotal in making the U.S. a better place for African Americans.

But despite a deep reverence for those accomplishments, a new study suggests that African-American men today face such high levels of unemployment and incarceration that they are in little better position when compared with white men than a half-century ago.

The working paper, by University of Chicago researchers Derek Neal and Armin Rick, is based on preliminary findings and has not yet been peer-reviewed.

“The growth of incarceration rates among black men in recent decades combined with the sharp drop in black employment rates during the Great Recession have left most black men in a position relative to white men that is really no better than the position they occupied only a few years after the Civil Rights Act,” the study reads.

The study uses census data to show that more than 10% of black men in their 30s will be incarcerated at some point during a calendar year. This number was around 2% for white males of the same age group.

The study attributes the corrosive impact of incarceration on the African-American community, at least in part, to the institution of more punitive criminal-justice policies.

African-American men also appear to face a more difficult employment situation. More than a third of African-American men between the ages of 25 and 49 lacked employment in 2010.

“The Great Recession period of 2008–2010 was quite bleak for black men,” the study reads. “Recent levels of labor market inequality between black and white prime-age men are likely not materially different than those observed in 1970.”

[FiveThirtyEight]

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