The Unemployment Crisis: Thinking beyond Supply and Demand

Our survey reveals extending unemployment benefits affects job recovery

Today I read with a great deal of interest and like mindset the article Matching Jobs with Jobless.
The article posits from the work of Economic Nobel Prize Winner Dale T. Mortensen:

Not all workers and jobs are created equal, and finding the right job or the right worker is a costly, time-consuming process.

Mortensen revolutionized economics by moving market analysis beyond the basic concepts of supply and demand. In many markets, they emphasized, the matching of buyers and sellers takes time because the two groups have incomplete information about each other.

At People Science, we see evidence of this disparity every day. After observing four full recession cycles, the US has been on a steady path to “jobless recoveries.” When unemployment rates hit 4-5 percent, we believed the Achilles’ heel of our economy would be the availability and imbalance of skills in the workforce.

Perhaps the largest challenge to an employment recovery is the reluctance of the unemployed to accept the current state of their own employability. This is not surprising since these are not small acceptances which could include:

• Acceptance of a lower salary for like work
• The need for total re-training into a growing field of employment
• The desire and hunger for re-training
• The realization that “their” work is not in demand

This led our team to question, how does the extension of unemployment benefits affect job recovery?   At People Science, we speak on average to 4000 job seekers per week. Therefore, we conducted our own observance survey.

Using three separate positions Sales, Customer Service, and Marketing for samples from the time period of February of 2010 through September of 2010, 46 percent of candidates on unemployment informed us they would consider the position if their unemployment was running out.

In fact, many suggested they would be very interested but wanted to take some time for themselves.  Many others had been looking for some time but were going to wait and see what opportunities arose while they collected.

What’s more, we often see marketed increases in new candidate inquiries when the press announces the possibility of discontinued unemployment benefits.

A survey done in the U.K. had similar findings, “1 in 3 of those surveyed who are currently seeking work would rather claim unemployment benefits than work in a call centre.”

Receiving unemployment is insurance.  An insurance that gives the reciprocate the time they need to re-establish themselves in the workforce.  From our perspective, if the government must become involved in the unemployment security then the focus should be on guiding the unemployed towards their next opportunity.  Simply extending benefits may buy reciprocates some time. If they are not on their way to a realistic employment situation, an extension, by its nature, could prolong an employment recovery.

On the flip side, Recruitment for both large and midsize corporations is rapidly being acknowledged as much more sophisticated and critical to a company’s profit and profitability than ever before.  As a Recruitment Process Outsourcing company, People Science has seen a marketed increase in the demand for streamlined, organized, and well-delivered services to meet the growing demand of tough-to-find talent even within our 9 percent unemployment economy.

You are what you measure


Join the discussion, leave a reply.

Don't worry, your email address will not be published. Required fields are marked: *

This site uses Akismet to reduce spam. Learn how your comment data is processed.