Veteran Employment Situation Report for May 2015
Welcome to the June VetJobs Veteran Employment Situation Report (VESR) covering veteran unemployment for May 2015. The VESR is published on the first Friday of the month when the Department of Labor (DOL) releases the unemployment reports.
This report is in three parts.
-The first section will be an Editorial providing a brief overview of the economy and the Department of Labor’s (DOL) Bureau of Labor Statistics (BLS) report on the labor market.
-The second covers where the jobs were created and where one would currently have the best chance for finding employment.
-The third covers specifically the employment situation of veterans.
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EMPLOYMENT SUMMARY
Editorial
Recently Lars Schmidt, formerly with NPR, posted the New Rules of Work in his newsletter, Amplify Talent. Here is his list of the new rules:
1. Work can happen wherever you are, anywhere in the world 2. You are on call 24-7 3. You go from gig to gig, project to project 4. For better or worse the line between work and life is almost entirely disappearing 5. You work because you are passionate about a movement or a cause. You have to love what you do!
I find these interesting as they describe where I am at in the world of work. I am composing this newsletter while on vacation on the north shore of Iceland in the town of Akureyri. I am now living with 22 hours of sunlight. I am also answering emails and questions from my office. Most of you are reading this newsletter in the states, four to seven time zones away. This proves my work can happen anywhere in the world. I am passionate about what I do. The line between work and life for me has disappeared.
Fascinatingly, the people of Iceland are debating what to do about immigrants and complain about a labor shortage. The unemployment rate here is 3.4%. Any unemployment rate below 4.0% to 4.5% indicates a labor shortage. I feel like I am still in the United States, not on vacation!
There is definitely a shortage of qualified candidates in the United States. I am constantly hearing from human resource managers who say they cannot find enough qualified candidates for their job openings. To many this may sound odd or contradictory since the Department of Labor (DOL) reports there are nearly nine million unemployed people in the United States.
But note that I said “qualified” candidates. Employers have openings but there are not enough people with the right skill sets, experience and qualifications to fill the openings. As the economy is improving there is dysfunction between what skill sets are needed by employers and what skill sets are in the labor force. This happens at the end of every down turn as the economy turns to improvement.
A classic example is in manufacturing. According to the National Association of Manufacturers (NAM), there are some 300,000 manufacturing jobs in the United States that are going unfilled due to the shortage of qualified workers. I recently listened to a radio show where a call-in participant in Georgia who owns a boat dock building company stated he cannot find carpenters. He is willing to pay top dollar but no one is applying due to a shortage of carpenters and he is located in rural Georgia. The same situation exists in STEM jobs. STEM is science, technology, engineering and math. It seems too many college students are studying soft degrees (gender studies, race relations, political science, history, etc.) rather than the hard sciences and business.
Complicating the issue is the government’s Department of Education’s policy of Leave No Child Behind. Due to this government policy which tried to force all high schools to prepare students for college, only 2.0% of high schools in America now teach shop courses. The result is critical shortages of trades craft trained candidates. America is short on ASE certified auto mechanics, plumbers, carpenters, electricians, welders, machinists, technicians, CDL truck drivers, etc. No Child Left Behind is a classic example of where big government interfering with the market place creates more problems than it is solving. In reality, No Child Left Behind has left behind millions of workers!
In the same way, last year the DOL through the Office of Federal Contract Compliance Programs (OFCCP) came out with benchmarks for companies subject to OFCCP to hire veterans and Individuals with Disabilities (IWDs). Many would argue that the use of the term benchmark is a politically correct way to say quota, but DOL is adamant that a benchmark is not a quota. However, if a company does not reach its benchmark, there can be financial penalties applied. When the government is threatening to assess companies’ money for not reaching a pre-determined hiring point, it is not a benchmark, it is a quota.
The benchmark for veterans was originally 7.8%, then lowered to 7.2% and is now 7.0%. The benchmark for IWDs is also 7.0%. I want to point out that employers do not hire candidates to a benchmark (quota). While it is debatable, forcing companies to hire to a benchmark (quota) has never worked well in the civilian business world of the United States.
To remain competitive in the market place both domestically and internationally, employers hire candidates who meet the criteria of a position and look for candidates that are the best qualified. The criteria are generally comprised of skill sets, experience, education, attitude, trainability, certifications, cultural fit and location. The most important of these criteria is attitude followed by cultural fit. But even if a candidate has a good attitude, if they do not have the technical skills and experience, they will not be hired.
Note that in the list of criteria the terms veteran or individual with a disability do not appear. That is because being a veteran or an IWD is not one of the eight hiring criteria. Just being a veteran or an IWD does not in and by itself guarantee employment in the real world.
However, having been in the military makes a veteran an excellent choice over non-veterans due to all the skills, leadership and experience a veteran brings when applying to a job. That is a big part of the reason why the overall veteran unemployment rate has ALWAYS been lower than the national unemployment rate.
That trend continued in the April unemployment report. Then the veteran unemployment rate fell from 4.9% to 4.7% while the national unemployment rate fell from 5.5% to 5.4%. The May unemployment report continues the trend. For May, the veteran unemployment rate is X.X% while the national unemployment rate was X.X%.
The numbers show without a doubt that veterans are finding employment at a better rate than non-veterans. And that is good news!
The Center for American Progress points out that this month marks six years since the end of the Great Recession, and the most recent economic data show that the economy still has a ways to go before reaching prerecession levels. Since the end of the Great Recession in 2009, about 10.4 million jobs have been added to the U.S. economy, and the national unemployment rate has fallen to nearly half of its 10% peak. continue to suggest that top-line numbers do not tell the full story of the labor market-one that details historically low growth in wages and considerable room for more employment growth.
Some more good news for those seeking employment, BLS reports jobless rates were lower in April than a year earlier in 344 of the 387 metropolitan areas, higher in 36, and unchanged in 7. Nonfarm payroll employment was up in 330 metropolitan areas over the year, down in 46, and unchanged in 11.
Among the major worker groups, the unemployment rates for adult men (5.0%), adult women (5.0%), teenagers (17.9%), whites (4.7%), blacks (10.2%), Asians (4.1%), and Hispanics (6.7%) showed little or no change in May.
To sum things up, like last month, the economy is growing but at a very sluggish, anemic rate. There are not enough new jobs to pull the huge number of people who have dropped out back into the economy while there are also not enough qualified candidates to fill the jobs that exist.
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>From the BLS
Erica L. Groshen, Commissioner of the Bureau of Labor Statistics reported this morning that nonfarm payroll employment rose by 280,000 in May, and the unemployment rate was essentially unchanged at 5.5%. Employment rose in professional and business services, leisure and hospitality, and health care. Job losses continued in mining. Incorporating the revisions for March and April, which increased nonfarm employment by 32,000, on net, monthly job gains have averaged 207,000 over the past 3 months. In the 12 months prior to May, employment growth averaged 251,000 per month.
Average hourly earnings of all employees on private nonfarm payrolls rose by 8 cents in May to $24.96. Over the past 12 months, average hourly earnings have risen by 2.3%. From April 2014 to April 2015, the Consumer Price Index for All Urban Consumers (CPI-U) declined by 0.1 percentage point (on a seasonally adjusted basis).
Household Survey
Turning to data from the DOL/BLS survey of households, both the unemployment rate, at 5.5%, and the number of unemployed persons at 8.7 million, were essentially unchanged in May and have shown little movement since February. Among those unemployed in May, 28.6% had been jobless for 27 weeks or longer. Both the number of long-term unemployed and their share of total unemployment have fallen over the past 12 months.
The civilian labor force rose by 397,000 in May. The labor force participation rate, at 62.9%, changed little over the month and has remained within a narrow range of 62.7% to 62.9% since April 2014. It is hard to maintain the economy is doing well when so many are not participating in the economy.
The employment-population ratio was essentially unchanged, at 59.4% in May.
The number of persons employed part time for economic reasons was about unchanged at 6.7 million in May and has shown little movement in recent months. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find full-time work.
Among people who were neither working nor looking for work in May, 1.9 million were classified as marginally attached to the labor force, down by 268,000 over the year. These individuals had not looked for work in the 4 weeks prior to the survey but wanted a job, were available for work, and had looked for a job within the last 12 months.
The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, was 563,000 in May, down by 134,000 over the year.
In summary, nonfarm payroll employment rose by 280,000 in May, and the unemployment rate was essentially unchanged at 5.5%.
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WHERE THE NEW JOBS WERE CREATED
For those people looking for work, the following paragraphs from the BLS commissioner’s report for December indicates where the new jobs were created. If you are looking for a job, these areas may offer employment opportunities.
Employment in professional and business services rose by 63,000 in May and by 671,000 over the year. Within the industry, computer systems design and related services added 10,000 jobs in May. Employment continued to trend up in temporary help services (+20,000), in management and technical consulting services (+7,000), and in architectural and engineering services (+5,000).
Employment in leisure and hospitality increased by 57,000 over the month, after changing little in the prior 2 months. Employment in arts, entertainment, and recreation edged up in May (+29,000). Employment in food services and drinking places has shown little net change over the past 3 months.
Employment in health care increased by 47,000 in May and has grown by 408,000 over the year. Ambulatory health care services (+28,000) and hospitals (+16,000) added jobs over the month.
Retail trade employment edged up in May (+31,000). Over the prior 12 months, the industry had added an average of 24,000 jobs per month. In May, automobile dealers added 8,000 jobs.
Employment continued to trend up in May in construction (+17,000), transportation and warehousing (+13,000), and financial activities (+13,000).
Manufacturing employment changed little for the fourth month in a row. The industry had added an average of 18,000 jobs per month from January 2014 to January 2015.
Mining lost 17,000 jobs in May. The decrease was in support activities for mining, which include those for oil and gas operations. Employment in mining has fallen by 68,000 thus far in 2015, more than offsetting the 41,000 jobs gained during 2014.
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VETERAN UNEMPLOYMENT REPORT
General Summary
The BLS CPS report states there were 21,251,000 veterans alive in May down from the 21,274,000 in April. This represents a loss of 23,000 veterans in May 2015. These numbers continue the downward trend of veterans in the United States. At the end of the Vietnam War, there were nearly 60,000,000 veterans alive in America. The United States has lost two thirds of its veterans.
BLS CPS reports there were 10,767,000 veterans in the workforce in May, down 16,000 from the 10,783,000 veterans in the workforce in April.
There were 19,484,000 veterans not in the workforce in May, an increase of 7,000 from April’s 10,491,000 veterans not in the workforce. This number means that of the total veteran population, only 50.7% are in the workforce. Those veterans not in the workforce have either retired, are at school or have dropped out.
The really good news is the overall veteran unemployment rate continues to be lower than the national unemployment rate. The veteran unemployment rate for May was 5.0% (541,000), up from April’s 4.7% (507,000).
It is encouraging that the veteran unemployment rate is lower than the national unemployment rate. The 5.0% veteran unemployment rate again confirms that veterans are obtaining employment at a BETTER rate than nonveterans. The reality is the overall veteran unemployment rate has ALWAYS been lower than the national unemployment rate going all the way back to World War II.
Younger Veterans
For May there were 276,000 veterans in the 18 to 24 year old cohort. 191,000 of this group are in the workforce. 164,000 are employed, 27,000 are unemployed in May, down from the 34,000 unemployed in April. Their unemployment rate dropped to 14.1% in May, down from April’s 15.8%.
I surmise that much of this high young veteran unemployment rate is due to the rapid reduction in force by the Department of Defense. This number will continue to fall over the next year as young veterans leaving the military under the current drawdown and National Guard & Reserve (NG&R) returning from overseas find work.
There were 1,758,000 veterans in the 25 to 34 year old cohort. Of this group 1,399,000 were employed and 103,000 were unemployed. The unemployment rate for the 25 to 34 year old veterans in May fell to 6.8%, down from April’s 7.0%.
For comparison, the national unemployment rate for the 20-24 year olds in May was 10.1%and the 25-34 year olds was 5.8%.
The veteran numbers are expected to continue to improve since the DOL Office of Federal Contract Compliance Program (OFCCP) has set an audit benchmark for all companies subject to OFCCP to have a minimum 7.0% of their workforce be veterans. That number was originally 8.0%, then moved to 7.2% and last month was reduced to 7.0%. It should be noted that employers do not hire to a benchmark, which is in essence a quota. Employers hire candidates for skill sets, experience, education, attitude, trainability, certifications, cultural fit and location. The most important of these is attitude.
Concurrently, there is fierce competition developing by companies seeking to hire qualified veterans who meet their needs due to the OFCCP benchmark. Many companies want veterans as a disabled veteran can be counted for the veteran benchmark and the individuals with disabilities benchmark which OFCCP set at 7.0%.
Older Veterans
Of the 10,767,000 veterans in the workforce in May, 541,000 were unemployed. The unemployment rates for the older veteran cohorts are as follows:
35 to 44 year olds 5.3%
45 to 54 year olds 3.4%
55 to 64 year olds 5.1%
65 year olds and over 4.6%
Gulf War II Veterans
There are 3,610,000 Gulf War II veterans alive in May. 2,787,000 were in the workforce. 663,000 Gulf War II veterans are not in the workforce in May, down from the 682,000 in April. 160,000 were unemployed. The unemployment rate for Gulf War II era veterans in May was 5.4%, down significantly from April’s rate of 6.9% (201,000).
Black Veterans
There were 1,474,000 Black veterans in the workforce in May. 1,325,000 were employed and 142,000 were unemployed. The Black veteran unemployment rate was 9.2%.
White Veterans
There were 8,817,000 White veterans in the workforce in May. 8,419,000 were employed and 398,000 were unemployed. The White veteran unemployment rate was 4.5%.
Asian Veterans
There were 187,000 Asian veterans in the workforce in May. 182,000 were employed, 5,000 were unemployed. The Asian veteran unemployment rate was 2.7%.
Hispanic Veterans
There were 42,000 Hispanic veterans unemployed in May. The Hispanic veteran unemployment rate was 4.5%.
Women Veterans
There were 81,000 Women veterans unemployed in May. The Women veteran unemployment rate was 6.4%.
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Thank you for reading the VetJobs Veteran Employment Situation Report (VESR).
If you have any questions, please contact Ted Daywalt at info@vetjobs.com or call 877-838-5627 (877-Vet-Jobs).
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Ted Daywalt
President
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