From a small northwestern observatory…

Finance and economics generally focused on real estate

Unemployment — better, or worse?

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Great article in CNN.com today about the new employment numbers, up 120,000 in the most recent report (slightly better than projected) and the unemployment rate is down to 8.6%.  While the stock market reacted positively on the news, the response wasn’t overwhelming.   Why?  First, creating 120,000 new jobs isn’t very good — our economy really needs to be creating about 200,000+ jobs/month to sustain really healthy GDP growth.  Second, the drop in unemployment was a manifestation of a large number of “employable” workers simply leaving the hunt and, for the time being, giving up.  That is terrible news, in the long run, for the economy.

November jobs report: Hiring up, unemployment down – Dec. 2, 2011.

Also, the bulk of the new job creation was in retail and hospitality.  Sadly, not all jobs are created equal, and while a person in a retail position is better for the economy than a person in the unemployment line, it’s still not the same as a person in science, engineering, or technology.

That same article deals with one of the big ironies of our economy — many jobs are vacant for lack of applicants, mainly in — double irony — science, technology, engineering, and math (STEM).  One would think that students would flock to major in those fields, and indeed about 22% of all college students start out in STEM majors.  However, nationwide, the STEM majors have a huge drop-out rate, and only 14% of college students end up graduating in those fields.  Columbia University, arguably one of the toughest in the nation, bucks this trend with a 96% completion rate in Engineering.  Of course, Columbia does a huge vetting process — simply getting into the program is tough.  However, they take a very pro-active stance at keeping students engaged and active.  Student-dropouts at other schools point to lack of preparation as one of the contributors to non-completion.

Economists are nearly universal in recognizing that the biggest key to a healthy economy is education.  K-12 needs to do a MUCH better job at preparing students for these technical majors, and colleges and universities need to work harder at engaging the students once they get them.  These are really critical issues, particularly at this juncture, for moving our economy forward.

Written by johnkilpatrick

December 2, 2011 at 10:43 am

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