Why are we having a jobless recovery?

The stock market is up, the economic news is cheerful, and people are calling an end to the recession by 2010. However with all of this, what has happened to the jobs that were to be created with stimulus? What has happened to new jobs overall? The ideas are numerous and the points of views countless on where the jobs are, when we will see them, and in some cases if we will ever see them again.

Searching for the north, the way out of this hole we have placed ourselves in is much more complex than most realize. Looking at the stats, the increased level in the stock market is pure hype with little raw data to justify the momentum. Many are expecting the double dip and the market to return to lower levels. Regardless of your thoughts on the latest news, the focus on newly created jobs in this economy has taken a back seat to the overall recovery. I find it interesting since job creation will fuel the country out of this situation. When a developed country moves away from a industrialized nation and into a consumer driven economy, job creation and growth is the largest single factor in coming out of a recession or down economy.

With all of that to say, where are the jobs? I think there a variety of reasons that drive this fact. Lets look at stimulus as there was hot buzz around all of the money being poured into certain programs and job creation was to surface. Look at the stats from the current administration and how they sold it. Unemployment would be 8.8% without the action of the government and the huge spending. Albeit, unemployment is over 9% nationwide and hovers between 10-12% within 14 states. So why didn’t the money work.

You cannot throw money at an issue with no plan and expect it to simply go away
The legislation around when and where the money was to be spent offered little to create jobs and fuel growth
When the government is looking to spend money, it must come from some resource pool. Whether borrowing or new taxes, this money is reduced from another entity and therefore does not fuel growth, it simply re-distributes where the money is going. FYI – governments are never the best decision makers when it comes to money.
The other large factor in the jobless recovery is efficiency, innovation, and technology. Companies are doing more with less, and now they have been doing it so long – it is becoming the norm. From increased hours, to limited benefits, to less people to achieve the same output – people are used to having and making due with less. The need is not there, therefore the jobs are not created with the same vigor as other post recession periods. Add in outsourcing and off-shoring models and you get the picture.

A jobless recovery is going to require some new innovation and new business segments to address the unemployment situation. Companies will need to expand, driving new initiatives internally and subsequently increase the need for talent. This process is slow and less drastic than simply increasing staff for output requirements. Since we have seen the latter will not occur, we must hope and pray for the creation of new business models that create jobs for today and the future.

Comment by Thomas Patrick Chuna on October 8, 2009 at 5:09pm: "FYI – governments are never the best decision makers when it comes to money."

Quoted for truth.

Several points - the bulk of the "stimulus" money doesn't begin to be doled out until 2010, and the economy is still shedding jobs because we aren't in a recovery.

We have a bunch of unsupervised children trying to take over every economic sector and industry - it's no wonder employers are paralyzed...nobody knows how much it'll cost yet to HAVE employees, or if the executives will be frog marched outside and sent to the gulag because their offices are too big.

Seriously, why try to grow your business when the gov't appointed czar will run it for you?

The plan is to fundamentally change the system.."recovery" isn't part of the plan.

Comment by Ron Rafelli on October 9, 2009 at 11:32am: The goal of this administration is to fundamentally change this nation to a European style of socialism, with some communist undertones. In order to get away with it, they need things to be bad. Rom Emmanuel said "You don't let a good crisis go to waste... it allows you to do things you wouldn't ordinarily be able to do." They don't really want a recovery, yet. What they want is enough time to get their agenda passed (Cap and Trade, Health Care, etc), then for the recovery to happen. That way, they can say "See, all these programs are the reason for the recovery... Socialism really is the way to go!" Fortunately, the silent majority is finally starting to wake up and see this.

Back to the point of the article, I agree whole heartedly. Without private sector innovation and small businesses creating jobs, there will be no true recovery. As long as this administration is in power, they will discourage, not encourage, that innovation and we will get nowhere.

Comment by Donald Knowles on October 9, 2009 at 12:02pm: Obviously the Bush doctrine of Unilateralism is to blame with its overtones of Facsism and spreading the gap between the have and the have nots throughout the world. The neocoons policys put us in this hole and the people screaming about Nobel Peace prize winner President Barack Obama turning the country communist is just Rush Limbaugh scare tactic.
Back to the article, its the fact people can not unload their homes is what is causing the jobless recovery. You can not go to a new job if you can not sell the house your in, noone wants to walk away from a home and ruin their credit.

Comment by Ron Rafelli on October 9, 2009 at 12:42pm: Don, typical liberal. Likes to toss about accusations and big words without anything to back them up. What specifically about the "Bush doctrine of Unilateralism" is to blame for the economic meltdown? What exactly did Obama do in his first eleven days in office to earn the Nobel Peace Prize? (the judging period for this year's prize ended January 31st)

Barak Obama wants to re-distribute wealth. He has said so on many occasions. This is the most basic tenet of socialism/communism. In and of itself, it is not a slight against him. Socialism and Communism are forms of government/economic systems. They are neither good nor bad in a vacuum. It is each person's right to want to live under that type of system or not. Many of us just don't happen to like that form of government and do not want this country to go that way.

Back to the article, 97% of the people in this country who get new jobs get them locally (they don't have to sell their house and move), so that actually has very little to do with the jobless rate. The earliest beginnings of this mess stretch back to Ronald Reagan's de-regulation of the banks in the early 80's. Sounded like a good idea at the time... it wasn't. Then, in the mid 90's Barney Frank, along with several others in Congress, started bullying banks into issuing mortgages to people who had no business getting them, because they did not have the means to pay the money back nor the credit history to justify the loan. Then Fannie and Freddie started backing these junk loans and the greedy bankers on Wall Street started packaging and selling this junk as "safe investments" and even backed it by selling an unregulated form of insurance (CDO's). When the loans went bad and they couldn't pay off their insurance policies, they faced collapse, which is what really sent us off a cliff. So, Don, as you can see both parties (government in general) is to blame for this mess, along with a few greedy jerks on Wall Street who were more concerned about this quarter's bonus than the safety of the investments they were peddling. Obama had nothing to do with creating this situation and I don't think anyone, including Rush Limbaugh, ever accused him of such a thing. What is clear, however, is that his administration is using this crisis to move things as quickly toward the Socialist/Communist model as they can. Again not a slam against him, it just is what it is. If you are a Socialist or Communist, then it is a plus, if you aren't, it's a negative. This is why the stimulous, while it sounded good, isn't really designed to get us out of this quickly. They need time to push their agenda through first.

Comment by David Perry on October 9, 2009 at 1:23pm: We're not having a jobless recovery... it just looks that way.

Employers aren't advertising openings because it's suicide. It doesn't mean the openings don't exist.

The quick and apply technology allows job hunters to surf and apply for jobs in their pajamas. So every job has thousands of responses. Employers must respond to each and everyone PLUS all the phone calls and emails to see "If you got my resume"...

The jobs have gone underground [think iceberg.. the hidden part]. it requires a different set of skills on the part of job hunters to ferret out the opportunities. Given most are addicted to job boards and newspaper classifieds - it's little wonder things are moving so slowly.

And of course the media report on what they "see" which will all be negative. It'll take some investigative journalist to actually exam the state of successful job hunting to change that dynamic. And that won;t happen until AFTER the recession is over because no one thinks this way or has the time to devote to a story.

- David Perry
author, Guerrilla marketing for Job Hunters 2.0
Managing Partner/Rogue Recruiter, Perry-Martel International

Comment by Jason Monastra on October 9, 2009 at 1:44pm: David

That is simply not correct. Look the employers information and stats on hiring. The jobs are simply not there. I know for a fact that the positions continue to move offshore and to outsourced providers since I am partner at a firm that does this activity, and business is bustling. But with effectiveness of best practices and shared services that we implement, smaller teams take the positions of multiple larger teams, reducing cost and effectively headcount.

Where are these jobs that you speak of, more importantly what sector?

Comment by Donald Knowles on October 9, 2009 at 1:49pm: So when Bush gave the tax breaks to the rich you do not call the redistributing wealth because? Why , it was for the rich? And it was going to trickle down and create jobs? Obama has given us an open door to the world again and the stautus quo realize if they do not kick and scream and lie then they will never gain any power again. We are part of the world and the Bush isolation and bumbling is over.

Comment by David Perry on October 9, 2009 at 1:49pm: Sorry Jason but I am exactly correct!

Comment by Jason Monastra on October 9, 2009 at 1:53pm: Dave, can you answer my question so I understand your position. What sector(s) is this job growth or availability located?

Comment by Ron Rafelli on October 9, 2009 at 2:11pm: Don, redistribution of wealth is defined as: the theory, policy, or practice of lessening or reducing inequalities in income through such measures as progressive income taxation and antipoverty programs. The top 1% of the income pyramid (the "rich") currently pay 40% of the income taxes collected by the federal government. The bottom 30% of the income pyramid (lower "middle class" and "poor") pay ZERO percent of the income taxes collected by the federal government. So no, allowing the rich to keep more of the money THEY EARNED is not wealth redistribution. It is actually the polar opposite of it.

Who is the "status quo" to which you refer? What specific lies have the "status quo" told? You have yet to answer either of the two questions posed in my last response to you. Do you have any valid, verifiable statements to make or are you like every other liberal ideologue who just likes to spout retoric, mostly false retoric, and scream really loud to make your numbers appear greater than they really are?

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