Although the U.S. economy is recovering, the addition of many low-wage jobs is causing a surprising trend among college graduates. According to a study by McKinsey & Company, almost half of college graduates are working in jobs that do not require a degree (McKinsey & Company, May 2013). This is leading many to question whether or not investing in higher education is the best course of action for young adults.

College graduates seem to be doing well according to their unemployment rate, which was only 3.9 percent in April, nearly half of the national unemployment rate. However, the jobs that many graduates hold require no more than a high school education, and some of them don't even require that much. Labor industries, which don't often require any education past high school, have been among those adding the most jobs, according to recent Bureau of Labor Statistics reports.

The fact that college graduates are now stepping into jobs for which they are overqualified is not all bad; the economy is still recovering and jobs are still being filled. However, most graduates find themselves saddled with thousands of dollars in education loans from the government and from private lenders. On top of that, most of the jobs graduates are filling pay minimum wage or only slightly better. This puts more financial pressure on graduates, as their entire paychecks are spent on living expenses and paying back debt for an education that seemed to promise a better job. This limits the amount of money they can contribute to the economy by making large purchases and buying homes.

Those with an associate's degree or higher still have the upper hand when it comes to the labor force, even if these jobs pay less. With this trend comes an even more unsettling set of data, which shows that while these college-educated workers are taking lower-paying jobs, those who have less education are being pushed out of the workforce altogether. Uneducated workers make up a smaller percentage of hourly workers now than in 2002 (The Wall Street Journal, 3/30/13). Therefore, while it is encouraging that college graduates can still manage to find work in a tough economy, it shows no promise for those with no education.

The economy's recovery in relation to lower-wage labor jobs may still be a good thing since those new workers will need supervisors and managers, jobs that educated workers can fill or be promoted into. This will open up more jobs for those with less education. This is likely why many Americans still believe a college education is valuable. Considering these trends, it is becoming clearer that the younger generations' college degrees act much like their parents' high school diplomas. In order to find work at all, some education beyond high school is desirable, even if the jobs being filled are not those typically thought of as requiring secondary education.

Readers: Does your job require a four-year degree?

This entry was posted on May 16, 2013 at 7:55 AM and has received 348 views. There are currently 0 comments. Print this entry.

This morning, the Bureau of Labor Statistics released the April Employment Situation Summary. This report showed that unemployment has fallen again by 0.1%, bringing the United States to 7.5% unemployment. This change, though small, is a continuation of a downward trend over the past several months. The long-term unemployment rate fell from 39.6% of the total unemployed to 37.4%.

Total nonfarm payroll added 165,000 jobs in April. The industry that added the most jobs was professional and business services at 73,000. Professional and technical services also added 23,000 jobs. Food services and drinking places added 38,000 jobs in April, rising far above the monthly average for the industry, which is 25,000. Retail services also rose by 29,000 jobs. Health care added 19,000 jobs. Several industries showed almost no change, including construction, manufacturing, mining and logging, wholesale trade, transportation and warehousing, financial activities, and government.

The staffing industry added 31,000 jobs in April, which was 7.4% higher than in April 2012, showing that employers are leaning more toward temporary solutions over the last year.It is also estimated that the staffing industry is responsible for adding 59,400 new jobs since March.

The average hourly wage rose by 4 cents to $23.87 in private nonfarm payrolls. Also, the Dow is up 1.2% to 15,006.56. Not only has the job market seen these increases, but the adjusted data from February and March added 114,000 jobs to the previously estimate data over the two months. While many have questioned whether or not the economy has really been in recovery over the last several months, it is now clear that the U.S. economy is expanding.

This entry was posted on May 3, 2013 at 11:30 AM and has received 126 views. There are currently 0 comments. Print this entry.

The March Employment Situation Summary, released from the Bureau of Labor Statistics this morning, shows that the unemployment rate in the U.S. has remained mostly static, falling only 0.1% from 7.7% to 7.6%. This leaves 11.7 million Americans unemployed, a number that has hardly changed since February.

The number of long-term unemployed dropped slightly from 4.8 million to 4.6 million, and those make up about 39.6% of all unemployed people. The number of nonfarm jobs increased by 88,000 over the month.

Professional and business services added 51,000 jobs, while accounting and bookkeeping services added 11,000 jobs; 23,000 health care jobs were added over the month, and construction added 18,000 jobs. Retail jobs fell by 24,000 over the course of the month, as well as a decline of 12,000 jobs for the U.S. postal service. Meanwhile, temporary help services have continued to show a slight upward trend across all industries, adding 20,300 new jobs this month (up 0.8%).

Average hourly earnings across the private sector have changed very little, and the average hours per work week across all industries have remained mostly unchanged. The very small amount of growth across all industries indicates that March has been a month of very little change to the job market and wages.

This entry was posted on April 5, 2013 at 11:45 AM and has received 222 views. There are currently 0 comments. Print this entry.

The Affordable Care Act (ACA), also known as "Obamacare," has been on the minds of Americans since its introduction into law in 2010. Business owners are especially concerned with the implications of this legislation and the new costs associated with it. Still, there remains confusion and debate over exactly what the changes will mean for U.S. businesses. As a result, in this week's TradePost, we have highlighted the major changes associated with the ACA that relate to businesses both small and large.

Many provisions in the ACA benefit small businesses so that they have the ability to offer insurance plans to employees for prices comparable to larger plans, which are often discounted by insurance providers. Perhaps the most notable is that in 2014, the Small Business Health Options Program (SHOP Exchange) will be available to small businesses who would like to compare plans and offer the most affordable coverage to their employees. This program offers a way for small businesses to shop for the best plan for their businesses. States must provide this program by 2014, or the federal government will do it for them. Also, tax credits will also be available to small businesses in order to offset the high costs of coverage for small employers.

So what constitutes a small business? According to the ACA, a small business is defined as having up to 50 full-time employees, or having the equivalent of 50 or fewer "full-time equivalent" employees (the total hours among all full- and part-time employees equals the amount of hours worked by 50 full-time employees).

On January 1, 2014, larger businesses, those with over 50 full-time equivalent employees, must be ready to either PAY (a penalty for each employee left uncovered) or PLAY (and offer health insurance to each full-time employee). Businesses who "pay" will be fined $2,000 per employee after the first 30 employees. Those who "play" must offer insurance that covers at least 60% of the cost of services while ensuring employee premiums do not exceed 9.5% of the employee's household income. If this standard is not met, employees may receive a tax credit to help cover the cost of the insurance offered, which the employer will have to subsidize by paying $3,000 per employee or the $2,000 fee per employee after the first 30, whichever is less.

Many businesses are concerned about the financial and administrative ramifications of complying with Obamacare. Some have announced plans to cut their workforce and/or cut back employees' hours, effectively underemploying many people and making it difficult for them to afford insurance for themselves and their families. These are debates that are still being argued in Washington and beyond.

What strategy works best for your business? Please join us again next week as we will discuss strategic plans for implementing the Affordable Care Act.

Reader Question: Does your business have a firm plan in place to implement the Affordable Care Act?

This entry was posted on April 4, 2013 at 8:00 AM and has received 1141 views. There are currently 0 comments. Print this entry.

The February Bureau of Labor Statistics Employment Situation Summary, released this morning, indicates that the U.S. unemployment rate has fallen from 7.9% to 7.7% -- reaching the lowest level since December 2008.

Commenting about the report, Alan Krueger, chairman of the White House Council of Economic Advisers, said: "While more work remains to be done, today's employment report provides evidence that the recovery that began in mid-2009 is gaining traction."

An estimated 236,000 nonfarm jobs were added to the economy. The long-term unemployed rate rose only slightly from 4.7 million to 4.8 million, making up about 40.2% of unemployed people.

The job gains were fairly broad across many industries. Among those that added the most jobs are professional and business services (+73,000), construction (+48,000), and administrative and support services (+44,000). Health care also added 32,000 jobs.

Staffing firms also added 16,000 new jobs, which is up by 0.6% since January. Other industries added jobs similar to this number, making February a month of growth across the board.

This entry was posted on March 8, 2013 at 10:33 AM and has received 779 views. There are currently 0 comments. Print this entry.

All eyes are on Congress as the sequester takes effect on Friday, March 1. Americans have hoped that Congress could come to an agreement to reduce the budget, but they remain deadlocked. Although members of both parties have agreed that the sequester will be harmful to the economy, neither side has budged, and it seems as though no last-minute deal will be made.

"Sequestration" is the term used for automatic, across-the-board budget cuts to reduce the federal budget. It was agreed that a sequester would take effect by default if members of Congress were unable to reach agreement on individual cuts to the budget. It was designed as a very undesirable effect of failing to reach an agreement; however, the threat seems to have had no effect on Congress, which is still unable to reach a bipartisan plan.

While the Republicans do not want to raise taxes again at all and would like to reduce spending, President Obama has proposed a hybrid plan that would reduce some government spending and raise taxes on the wealthiest Americans. If an agreement is not reached, a slew of indiscriminate cuts across the board will take effect.

The White House has been on a campaign to show how much the sequester will hurt the economy in hopes that both sides of Congress would come together and agree on a deal. Republicans believe the President is exaggerating the consequences for dramatic effect and have asked him to put more effort into reaching a deal.

On February 24, the White House released a memo stating where the sweeping budget cuts would be made over the next year as well as over the next decade, eventually cutting $1.2 trillion from government spending.

For the rest of 2013, $85 million will be cut from defense spending, Medicare, education and some social programs, as well as across many government employers, such as the FBI and homeland border patrol. Many government agencies will be forced to lay off workers, and even more government employees will face furlough days over the next several months. An estimated 750,000 public and private sector jobs will be eliminated in 2013 due to these cuts.

Many economists have focused on what effect the sequester will have on the American people. Unfortunately, there is no clear consensus of how this will affect the economy in the long run, although there is a great amount of speculation coming from all sides. According to a Wall Street Journal and NBC News poll, Americans are split on the issue, with about half believing that the cuts will be bad for the economy, while about a fifth of the respondents believe the cuts will be good. About half of those polled also believed that the President and Congress should work together to prevent the sequester from taking effect, while the other half believe that the cuts should go into effect (NBC News, 2/26/13).

Readers: Do you believe the cuts will help or hurt our economy in the short run?

This entry was posted on February 28, 2013 at 7:00 AM and has received 517 views. There are currently 0 comments. Print this entry.

In Tuesday's State of the Union address, President Barack Obama called for immigration reform in the U.S. He stated: "Real reform means establishing a responsible pathway to earned citizenship, a path that includes passing a background check, paying taxes and a meaningful penalty, learning English, and going to the back of the line behind the folks trying to come here legally. And real reform means fixing the legal immigration system to cut waiting periods and attract the highly skilled entrepreneurs and engineers that will help create jobs and grow our economy. . . . America will be better for it.

Although it's difficult to know exactly how many illegal immigrants currently reside and work in the U.S., the figure is estimated to be around 11 million (Department of Homeland Security). Needless to say, naturalizing 11 million people would have huge repercussions on America's workforce and economy.

Illegal immigrants work in various industries in the U.S., and many are low-skill and low-wage workers in manual labor industries, such as agriculture and construction. As many farmers rely on immigrants because they are unable to recruit Americans to do the work, the reform would benefit these employers who could now hire immigrants legally. However, another subset of immigrants sometimes forgotten is those who work in very high-skilled industries, like science and technology. If passed, this proposed legislation could help prevent "brain drain," or the loss of trained and educated professionals (who have studied at American universities) to their native countries (Time, 10/11/12).

Although economists disagree over the implications of immigration reform on the economy, many argue the consequences would be overwhelmingly positive. A research summary by Michael Greenstone and Adam Looney of The Hamilton Project found immigrants are 30% more likely than native-born Americans to start new businesses. Some economists believe that giving citizenship to illegal immigrants will help our overall standard of living improve by making the cost of food, homes, and child care lower (The New York Times, 2/1/13). Vivek Wadwha, a Stanford University fellow, contends reform would increase remittances to families back home, which could eliminate the need for foreign aid and help reduce our federal spending (Fox Business, 6/28/11).

The big question on many Americans' minds regarding immigration reform is whether native-born Americans will lose out on low-wage jobs. Although there is no clear answer from researchers, some suggest that newly legal immigrants would help push natives upward into jobs that require more communication skills (Economic Policy Institute). This would be positive for both employers and job seekers: employers could continue to hire low-wage workers, while native-born Americans would benefit from their native language proficiency.

Immigration reform now rests in the hands of Congress. If Congress and President Obama are unable to work together, as is the case in the recent past, illegal immigrants could remain in the gray area of working and living in the United States without paying taxes. If President Obama and influential Senators can come to a compromise, millions of immigrants will have the chance to become legal workers and citizens.

Readers, have you considered what positions in your company could be better filled with immigrants vs. native-born Americans?

This entry was posted on February 14, 2013 at 5:33 AM and has received 733 views. There are currently 0 comments. Print this entry.

The January Bureau of Labor Statistics Economic Employment Summary released today is very typical of a January report. The U.S. economy lost 2.8 million jobs and the unemployment rate ticked up to 7.9% from 7.8%, but this is a typical swing at the beginning of the year because of the volume of seasonal holiday jobs that end after Christmas.

In January, an estimated 157,000 nonfarm jobs were added to the economy. The number of long-term unemployed had little change and sits at 4.7 million, which makes up 38.1% of the total unemployed.

The most significant gains were in Construction (+28,000), Health Care (+25,000), Professional and Business Services (+25,000), and Retail (+32,600). Meanwhile, the Transportation and Warehousing sector (-14,200) lost jobs.

Temporary help employment remained little changed but is up 5.1% year over year.

Meanwhile, the stock market is at its highest level since October 2007.

This entry was posted on February 1, 2013 at 9:05 AM and has received 558 views. There are currently 0 comments. Print this entry.

Despite nerve-racking discussion over the fiscal cliff, the latest Jobs Report numbers paint a pleasant picture for our economy’s future. December showed solid job growth by adding 155,000 jobs—bringing the total number of jobs added in 2012 to 1.8 million and giving us an average of 153,000 jobs added per month. Consequently, we saw a modest rise in the stock market today.

Uninspired by the added job growth, the unemployment rate remained unchanged at 7.8%— after a 0.1% revision in November’s number. The number of long-term unemployed continues to sit at 4.8 million, which makes up 39.1% of the total unemployed.

As a welcomed change after months of little change, manufacturing gained 25,000 jobs this month. Other industries that saw growth were Health Care employment (+45,000), Construction (30,000+), and Food Services and Drinking places (38,000+), and an estimated 150,000 new jobs were added by staffing firms.

While the numbers in this month’s report may not be overwhelming, many are relieved that employers remained stable through the heated discussion of tax hikes and government spending cuts.

This entry was posted on January 4, 2013 at 12:00 PM and has received 1139 views. There are currently 0 comments. Print this entry.

The November Jobs Report paints a picture that is clear as mud where the U.S economy is concerned. On one hand, the unemployment rate dropped from 7.9% to 7.7% and non-farm payroll added 146,000 jobs in November, compared to 138,000 in October. This job growth was a welcome surprise with many fearing Hurricane Sandy would have a considerable impact on November's numbers.

On the other hand, the long-term unemployed, who makes up over 40 percent of the unemployed, remained little changed at 4.8 million. The numbers indicated that the decrease in the unemployment rate is not necessarily attributed to gains in employment but rather to fewer people looking for jobs. Additionally, the believed job growth in both September and October got revised downward to 132,000 and 138,000 respectively--leaving many questioning the gains we are making towards an economic recovery, especially with the looming fiscal cliff (TradePost, 11/15/12).

Industries that saw an increase in November were retail and trade, professional and business services, and health care, with retail on the rise now for 3 months in a row. Employment in wholesale also trended up slightly this past month, along with Information employment in leisure and hospitality. Once again, manufacturing employment showed little change this past month, with little change since last spring.

The number of temporary jobs rose by 18,000, or 0.7 percent, to approximately 2.56 million.

This entry was posted on December 7, 2012 at 1:10 PM and has received 1021 views. There are currently 0 comments. Print this entry.