‘Middle-educated’ workers: Unemployment rate hits new high

According to this morning’s BLS report, the unemployment rate for  ’middle-educated’ workers–people with some college or an associate degree–hit a new high of 9.1% in September. That’s up from 8.2% in June, and the highest unemployment rate since this data started being collected 20 years ago.  

This is not the result of an improving labor market drawing in more willing workers who were sitting on the sideline. The labor force participation rate for this group is actually lower than it was in June.  I’m going to do more analysis of the numbers to see exactly what’s happening here.

Meanwhile, the labor market situation for college graduates seems to be bottoming out–’improving’ would be too strong a word.

White House Solar Panels: Good Idea?

Is putting solar panels on the White House is the best idea at this moment?  Several things  to think about on the minus and plus side.  Symbolism is certainly essential when it comes to innovation. Still, this  may be the wrong symbolic gesture, going into this particular election. Jimmy Carter put solar panels on, Ronald Reagan took them off.

Second, the economics of solar panels, especially in a non-sun-belt area like DC,  still depend on government subsidies and cheap borrowing costs. Here’s a graphic on the levelized cost of electricity by different technologies, without government subsidies. This is based on Department of Energy projections for 2016.  

So the government is borrowing this money from overseas, basically,  to increase its net energy costs.

That needn’t be a bad thing. Government spending is often necessary to get economies of scale for manufacturing and improving new technologies.  But if we want our borrowing to be worthwhile,  those benefits of government spending have to stay in the U.S.  We  have to make sure that our net trade gap in photovoltaic cells and modules decreases, not increases, and that our domestic PV manufacturing continues to grow.  One possibility: More subsidies for domestic PV manufacturing.  Does that violate WTO rules?

Innovation Failure

The NSF has just come out with its latest report on innovation, and it’s a doozy.  Basically, the NSF asked companies whether they engaged in product and/or process innovation, and here’s what they found out.

• Only 9% of companies engaged in product innovation in 2006-08. Only 9% of companies engaged in process innovation over the same period.
• Some industries were surprising low. Only 10% of healthcare services firms reported a process innovation from 2006-08.
• Only 8% of finance/insurance firm reported a product or process innovation in 2006-2008
• “Companies with R&D (either performing R&D or funding others to perform R&D) exhibit far higher rates of innovation than do non-R&D companies.”

The last result is extremely interesting. It means that the concentration of R&D is in fact a good proxy for the concentration of innovation. According to the NSF survey, only 7% of the companies without R&D report a product innovation over the past 3 years. But 66% of the companies with R&D report a product innovation. The gap for process innovations  is almost as big.

You can’t be an innovative economy if only 9% of your companies are innovating.

 Added 10/7/10:  Reihan Salam at the National Review has a nice post asking  Amar Bhidé for his response to the NSF survey, and why, perhaps, we shouldn’t be concerned.  Ezra Klein picks up the survey as well.  Surprisingly, it does not seem to have received much press….perhaps because it is too depressing.  

 

Where Young College Grads Are Finding Jobs: Government

First, let me apologize for the gap between posts.  I’ve been immersed with other members of the VisibleEconomy crew developing videos that combine the best of news and education.   In a month or two we are going to roll out a line of news videos entitled VisibleCareers–short, fast-paced news videos focusing on key events and changes in the economy that young job seekers should know about  (the VisibleCareers site will be up  soon).

As part of that effort, I’ve been developing new job market indicators. One question that people often ask: Where are the new jobs being created? But they are really asking: Where can people like me find a job?

So assuming that most of the people reading this blog are college-educated, here’s a table that shows where young college graduates (aged 25-34) are finding jobs over the past year. The number for each industry represents the increase in collegee-educated employment, comparing the year ending August 2010 with the year ending August 2009.

Immediately obvious: Government has been the main hirer of young college grads over the past year .  And why not? Government jobs are safer, they pay well, and have better benefits than the private sector.  The next biggest hirer of young college grads is the broad category entitled professional and technical services, which includes such  industries as law, accounting, computer systems design, and management consulting.  These industries as a whole have not been expanding, or expanding only slow–but they have been shifting towards better-educated workers.

Then comes the distressing category: Hotel and restaurants.  We hear anecdotes about young college grads being forced to work as waitstaff in restaurants, and here’s one indication that might be more common than we would like–the number of young college grads working in hotels and restaurants is up 33K over the past year.

Two industries that I lump together in my mind as the ‘social and community’ sector are social assistance and membership associations. Now, for sure, not all the enterprises in these two industries are nonprofit. But in some sense, they are directed towards broad social goals. Total young college grad employment in the social and community sector is up about 60K.

One final but important source of jobs for young college grads is the communications sector, which for me includes industries such as telecom, internet publishing, and broadcasting.  Young college grad employment is up about 18K in these industries. Please note–I was formerly in publishing, and now I’m in internet publishing–two different industries.

Which sector is worst? Finance, of course, which has been shedding young college grads like crazy.