Thursday, January 19, 2012

Hold the Celebration

You could almost hear the corks popping at the White House this morning, after the Labor Department released the latest, weekly numbers for unemployment claims. After an "unexpected" increase for the week of January 7th, the most recent tally for first-time unemployment claims came in at a seasonally-adjusted total of 352,000, a decrease of more than 50,000. It was the lowest level since 2008, and the biggest one-week decline in almost seven years.

Still, not everything is rosy in the new unemployment numbers. As the WSJ reports:

A Labor Department official said "volatility is fairly common this time of year," and noted that several states had their data estimated due to the Martin Luther King holiday.


Even with the recent improvement, joblessness remains a significant worry for Americans as they head to the polls this year for the presidential election. The unemployment rate, the government's broadest snapshot of the labor market, measured 8.5% in December. The reading was the lowest level since February 2009, but still well above historic norms.

There's also the lingering problem of much-higher unemployment rates among various groups in the workforce, including veterans. In fact, the jobless rates among ex-military members who served in Iraq and Afghanistan stood at 13.1% in December 2011, a full two-percentage point increase from a year earlier. Tom Tarantino, a legislative associate for the Iraq and Afghanistan Veterans of America (IAVA), believes part of the problem is "structural." As he told the Washington Times:

While many corporations nationwide are invested in hiring veterans, “this is the first generation of business leaders in this country who have never served in the military,” he said. “Prior to this generation, almost everyone had served … and the military resume was something easy to translate.

“But leadership skills, being an officer, are not understood by the current employment climate. What we had to do was go back and figure out ways to do quantitative analysis so that we can effectively transition people without losing the valuable skills they got in the military.”

To help reduce joblessness among younger veterans, various groups (including the IAVA) are holding job fairs around the country. The military is also doing more to help departing service members; the Army (for example), is revamping its transition assistance programs, offering more support and preparation assistance for soldiers returning to civilian life. There is also a wealth of on-line resources for veterans looking for work.

And, to his credit, President Obama recently signed legislation that provides a tax credit to firms that hire unemployed veterans. But, as is often the case with this administration, the positive effects of the tax legislation may be swamped by other policies that will hurt out-of-work veterans.

We refer to plans for massive cutbacks in defense spending, upwards of $1 trillion over the next 10 years. Those reductions will create a ripple effect among defense contractors and other firms that are among the leading employers of veterans. With fewer contracts for new systems and required support services, those companies will reduce their payrolls, creating fewer job opportunities for ex-service members. And did we mention that many of those positions pay salaries in the low six-figures, with outstanding benefits?

In other words, the job market for young veterans may get worse before it gets better. In a bitter and ironic twist, the men and women who defended this nation over the past decade could be among the last to benefit from a supposedly improving jobs outlook.


F said...

No matter what the job market has been doing, or will do in the coming year, we will be hearing at tomorrow's State of the Union speech how the nation is turning the corner as a result of Obama's policies. Words are more important that actions any day to this administration.

MarkD said...

The rate does not include those who have given up, those who were forced into early retirement, or those working part time who want to work full time.

The CBO says the real unemployment rate is over 10 percent. Those encouraging fourth quarter numbers for the economy are being revised, surprise, downward and are largely due to inventory replenishment.

Except for reality, Obama would be on a roll.