The "official" unemployment figure for 16 - 24 year olds is 20%. But this does not account for the young people who don't even think it's worth the effort it takes to get off the couch and look for work. When you look at the 16-24 demographic in its entirety, it's estimated that only 45% of the young people who could be working are working. This is the worst percentage of gainfully employed youth that has been seen since the Great Depression.
Our young workforce, with little work history and no college education, generally looks to the retail industry to find the first jobs of their working lives. But they're not finding those retail jobs very easily these days and there are many good reasons why not.
The U.S. retail industry lost 1.2 million jobs, or 7.5% of its labor force in the recession according to the Labor Department. In December, 2009, retail employment hit a ten-year bottom at 14.36 million. The ten-year high had been reached in December, 2007 when 15.57 million people were getting retail paychecks.
So far in 2010, only 83,000 of the lost retail jobs have been replaced. In that same time, there were 52,248 new claims for unemployment filed by retail sector workers in the first quarter of 2010. This is 26% lower than the number of unemployment claims filed in the first quarter of 2009, which is good. But the first quarter of 2009 was Retailageddon, so what wouldn't look good compared to that?
Looking at a larger history of retail unemployment gives a more realistic perspective. Taking Retailageddon out of the mix, when looking at every other first quarter for the past ten years, retail unemployment claims in 2010 are 17% - 51% higher than every other first quarter in the past decade.
So why didn't those 52,247 newly unemployed retail workers get one of those 83,000 newly created retail jobs? Because retail is not just the fallback-catchall-Plan-B profession for those who lack experience, skills and education any more. Retail has become the industry-of-last-resort for displaced workers at all levels of experience, education and desperation. My nieces and nephews aren't competing with their classmates for jobs, they're competing with the highly qualified parents of their classmates who have been jobless for 33 weeks or more, on "average."
Losing one retail job and moving straight into another one isn't generally a direct trip these days without at least a short layover in the Unemployment Terminal. So 52,234 workers move from employment to unemployment, and 82,000 workers from other industries move from unemployment to employee parking spaces at the mall. Another 200,000 move from unemployment to Census Bureau temp jobs, which temporarily stimulates the economy enough for additional retail jobs to be created, the taxes from which will help fund yet another extension of unemployment benefits.
While there's at least some kind of equity happening in this current game of unemployment musical chairs, what's going to happen when the music stops? It's going to become clear that there's nowhere to land, not because chairs have been removed, but because there never really were any chairs in the circle to prop anyone up in the first place. Our entire economy and every measurement of it confuses activity with accomplishment, and then tragic economic missteps are made based on a reality that is fabricated by extrapolations.
An example of that was found in the March and April same store sales reports. The March same store sales numbers were artificially inflated because of the Easter holiday shift from 2009, and yet that was largely ignored by the recovery zealots. Now that we have a chance to look at the "Marpril" numbers in combination (which is the only meaningful way to look at these two months), we find not so much evidence for recovery euphoria.
Only three major chains - managed to pull out year-over-year increases for both March and April... read more >>
