Last Friday, the Department of Labor released the jobs report. And if you listen to the media, it is all doom and gloom. The unemployment rate held steady at 9.6%. Total nonfarm employment was reduced by 95,000. Blah, blah, blah. The media likes to play the role of Chicken Little and they do a pretty good job of it. However, there are some hidden gems in this report. Let’s look a little deeper at the numbers.
First, government employment decreased by 159,000 of which 77,000 were temporary US census workers. I think everyone can get behind a shrinking government at the moment. But, that means the private sector actually increased employment by 64,000. Now 64,000 isn’t a lot, but at least the graph is going the right direction.
Next, let’s dissect that 9.6% number. First the bad news. If you don’t have a high school diploma, you’re in even worse shape. People without high school diplomas have an unemployment rate of 15.4%, a sharp increase from last month’s 14%. If you do have a high school degree or even a little college, you’re not in much better shape with unemployment hovering around 9.5%-10%. However, if you have a college degree and are over the age of 25, the unemployment rate is 4.4%. That is the lowest rate in 19 months!!! Most economists consider unemployment under 5% as full employment. So that means that almost every college educated professional with any experience that wants a job, has a job! I can back this up from my own recruiting firm’s results over the last six months. We have been very busy and in some instances, candidates have been scarce (I recruit procurement professionals). In addition, I have talked to several of my colleagues at other recruiting firms, and they are all busy as well.
A College Degree Weathers the Recession Storm
4.4% vs. 15.4% Unemployment rate? Maybe it’s time to go back to school if you don’t have a degree. If you want any more proof, let’s look at what happened to the unemployment rate for high school graduates vs. college graduates over the last couple of years when this Great Recession happened. Let’s start back in June 2007 when everything was normal. The high school graduate’s unemployment rate was at 4.2% in June 2007. At the height of the crisis, their unemployment rate rose to a high of 11.2% in October 2009. Today it’s at 10%. For college graduates’, their unemployment rate was only 2.0% back in June 2007. It rose to a high of 5.0% in December of 2009 and is currently at 4.4%. Think about that. At the height of the Great Recession, college degreed professionals were unemployed at about the same rate as high school graduates were when times were great (5% vs. 4.2%). The message is clear. Degreed professionals weather recessions really well where high school graduates take the brunt of the storm. In addition, a college degreed professional makes $20,000-$30,000 per year more on average.
So in closing, if you have a college degree, get out there and interview. People are hiring. Things are getting back to normal and another talent shortage is on its way (I’ll talk about that in a later blog). If you don’t have a degree, don’t panic. I still think times are getting better. However, if you can, go back and get a degree. That way, the next time a recession comes, you will be in a position to better weather it.