Thursday, January 30, 2014

Workforce Dropout Rate a Source of Concern

Lawmakers continue to be gridlocked over the future of long-term benefits and the Emergency Unemployment Compensation program, the need for which underscores how dire the labor market currently is.

Another indicator of that fact is the continued increase in the number of “workforce dropouts”…unemployed workers who simply cease the job search…a figure that has been reported at 550,000 in the last year.

KRA Corporation explored the Workforce Participation Rate in a previous post, noting the increase in workforce dropouts, as well as the impact on themselves and the workforce itself.

The WPR, a metric that looks at those working and job seeking, is currently at a 36-year low. This fact is a source of concern for some economists who believe this figure is a more accurate indicator, than the unemployment rate, of long-term economic health. It also means a smaller portion of the populace will be fueling the economy.

A Wall Street Journal posting from last April highlighted the alarming numbers of workers who simply gave up looking for employment, stressing that it was a source of concern as returning to the workforce for many of those that have stopped searching will be increasingly difficult the longer they stay unemployed, and those that do return could do so at a lesser wage structure.

More disheartening about the shrinkage in the size of the US Labor force is that it seems young workers are deciding to drop out in increasing numbers.

The same Wall Street Journal article claims that nearly half of the dropouts in the March rate were under the age of 25. These missed career and development opportunities could have a direct impact on earning potential later.

KRA Corporation is a firm believer that the youth (16-24) we serve are an essential factor in strengthening the workforce and helping the economy, while also strengthening communities. It is why we are so committed to our WIA Youth Services to aid them in becoming part of the workforce.

KRA Corporation has devoted more than 3 decades to diminishing the many effects of unemployment through our workforce development services, and will strive to reach out to those dubbed workforce dropouts.  By providing these disenchanted workers with the knowledge and skills to re-energize them in renewing their desire to rejoin the workforce they, their local communities and the overall economy will benefit.



Wednesday, January 22, 2014

Unemployment Benefits Extension Stalls in the Senate

KRA Corporation looks at the most recent development in the Senate regarding the extension of long-term emergency unemployment benefits.

What looked like a promising inroad to the extension of the Emergency Unemployment Compensation (EUC) benefit that expired at the end of last year, was dealt a significant blow by the Senate minority last week.

Two separate procedural votes aimed at extending the current EUC program failed to make it past the 60-vote threshold. The first vote on the docket was a proposed amendment by Sen. Jack Reed, D-RI, that would extend the benefit program until November which would be funded by an extension of sequester cuts until 2024.

The second vote on the 3-month extension, which originally had the support of six Republicans, failed by a 54-45 margin with only bill co-sponsor Sen. Dean Heller, R-Nev. remaining in favor of it.

The change in sentiment with regards to any extension seems to be based in the argument that there was no agreed upon payment provision for the programs. Another sticking point was the vote threshold for amendments (60) and the legislation passing (51), which Minority Leader Mitch McConnell, R-KY, described as being “fundamentally unfair.”

This division in the Senate has severely hampered the likelihood of passage of any action that will extend long-term benefits, meaning that those 1.3 million Americans who lost their benefits in late December will be without any relief for the foreseeable according to some analysts.

With the Senate now unlikely to revisit the issue in the near future and more likely to focus on the details of a larger bill that will keep the government funded and open, any chance of extension legislation is becoming slimmer.

However, Senator Reid’s tactic of voting against his own motion to proceed enables him to bring up the bill for reconsideration if agreement is ever reached between the two sides.

KRA Corporation continues to remain hopeful that this benefit is reinstated to aid those unemployed jobseekers that rely on this benefit while they explore opportunities to find employment.

KRA Corporation also remains firmly committed to its mission of preparing job seekers for tomorrow's global economy while lawmakers address this situation. Through our support of Federal, state, and local agencies, we will continue to design, develop, and operate performance-based workforce development programs aimed at improving both the lives as well as the communities affected by unemployment.



Wednesday, January 15, 2014

A Look at the Size and State of the Current U.S. Workforce

KRA Corporation takes a look at the U.S. workforce, how it stands, and some potential factors that could be affecting it.

A recent Bureau of Labor Statistics (BLS) Labor Participation rate graph shows that the rate of participation for workers 16 years of age and older has dropped by more than 3% in the last 10 years (from 66.4% to 63%). It is a decline that is worrisome, as it might point to a weakened U.S. economy in the future as well as lowered growth prospects.

A Washington Post article points to three factors that could be contributing to this phenomenon: a retiring baby boomer population (meaning fewer workers to choose from), the search for higher education in a bad economy, and an increase of workers receiving disability insurance.

It is also worrying as it begs the question as to how those that make up the U.S. workforce are faring in the current economic climate. Recessions make for belt tightening, and cutting fixed labor costs is one of the quickest ways to increase profits. It also leads to changing management techniques and restructuring of benefit packages.

Just how quickly those employment practices and company policies will shift is open for some debate. The bargaining power of jobseekers and employees has been severely affected, and there are factions that seem to think there will not be a rush by larger companies to restructure or change hiring practices.

The practice of hiring nonstandard, temporary, and/or part-time employees is something that some groups believe is not likely to change in the near future, either. An unfortunate by-product, which stems from the sense of lack of job security and impermanence of employment, is a decline in mental health for those affected by the change in employment status (something that KRA Corporation highlighted in a previous post).

These practices and a weak job market have given rise to more and more workforce “dropouts.” By simply giving up on searching for employment, they risk being left behind and eventually become unemployable—an unfortunate outcome that KRA Corporation continually strives to address and combat as part of its mission.

Additionally, the practice of offshoring continues to draw a lot of criticism, being regarded as a potential drain on the U.S. workforce with jobs being shipped internationally. Even with a rebounding economy, some economists believe that it will not spur a reversal of those decisions and bring the jobs back to the U.S.

There have been efforts made to create programs by the current administration, like the Make it in America Challenge (as highlighted in this KRA Corporation post), to dissuade the practice and keep, expand, or reshore U.S.-based manufacturing operations—an effort at job creation that KRA Corporation applauds.

Since 1981, our commitment to supporting the mission of federal, state, and local agencies that are dedicated to improving the lives of individuals and strengthening the communities in which we live has never wavered. Successfully weathering cyclical economic climates, KRA Corporation has remained dedicated to its mission of providing workforce development services that prepare jobseekers for tomorrow’s global economy and supply employers with a trained and reliable workforce. 

Wednesday, January 8, 2014

Long-term Unemployed Get Glimmer of Benefit Relief

The lifeline that many in the White House hoped would be forthcoming for the 1.3 million Americans who lost their Emergency Unemployment Compensation benefits on December 28, 2013 (which KRA Corporation highlighted in a recent blog post), emerged yesterday.

In a bill co-sponsored by Sen. Dean Heller (R-NV) and Sen. Jack Reed (D-RI), the Senate agreed by a vote of 60-37 to proceed with an action that would temporarily reinstate benefits for the long-term unemployed for another 3 months.

Tom Perez, the Department of Labor Secretary, was congratulatory of the move saying in a statement that, “Today’s Senate vote was the right thing to do – an important step toward providing critical relief to families in economic distress. And it was also the smart thing to do – because these benefits would provide an economic stimulus by putting more money in the pockets of working families.”

While originally looking as though the necessary 60 votes were not going to be reached, in addition to Heller and Reed, , five other Republicans---Kelly Ayotte (R-NH), Dan Coats (R-IN), Susan Collins (R-ME), Lisa Murkowski (R-AK), and Rob Portman (R-OH)---voted in favor to move the bill forward for bipartisan consideration in the House.

This was an important step toward reinstating the much-needed relief for those who lost jobs “through no fault of their own”, but still face some opposition in the House where Republicans might still stop the bill’s passage based on the grounds that there are no budgetary spending cuts that match the projected $6.5 billion it will cost.

House Speaker, John Boehner (R-OH), as part of statement after the vote, pointed to why it might find resistance stipulating, “One month ago I personally told the White House that another extension of temporary emergency unemployment benefits should not only be paid for but include something to help put people back to work. To date, the President has offered no such plan. If he does, I’ll be happy to discuss it, but right now the House is going to remain focused on growing the economy and giving America’s unemployed the independence that only comes from finding a good job.”

Other opposition to the extension is also rooted in the belief that these benefits act as a means of slowing or stopping recipients from reentering the workforce. However, a White House report argues that removing these benefits would negatively impact existing jobs and employment in the U.S. states with lack of spending resulting in job cuts in states’ local businesses.

KRA Corporation is heartened by the actions of the Senate and remains hopeful that this benefit is reinstated to aid those unemployed jobseekers in weathering the economic climate while also bolstering the economy by helping businesses to retain employees.

As an organization dedicated to improving the lives of individuals and strengthening the communities in which we live, KRA Corporation looks forward to continuing our work in supporting the mission of federal, state, and local agencies to prepare job seekers for tomorrow’s global economy and supply employers with a trained and reliable workforce.



Wednesday, January 1, 2014

Shrinking Federal Workforce Looks Set to Continue Downsize

KRA Corporation looks at some of the figures and factors that predominate the size and earning capabilities of Federal employees as 2014 unfolds.

As the White House continues to employ measures aimed at creating jobs and growing the middle class, there is a movement toward shrinking their own ranks from within. According to a Government Executive article, the Federal Government lost a further 7,000 jobs in November—which is on top of the additional 18,000 positions that closed in September and October combined.

It seems that this downward trend in employment within the government is calculated. The Bureau of Labor Statistics is reporting that some 92,000 Federal jobs were shed over the course of the last year with buyouts, hiring freezes, and retirement being some of the factors that have chiseled the number of jobs within the Federal government.

The core of this move to shrinking the number of government positions seems to be part of the budget balancing efforts, with the initiatives in the fiscal 2014 budget projected to diminish the government employment figures a further 3.6%.

It seems that attrition will be another contributor to a diminishing Federal workforce, with those positions made available by retiring employees apparently not being filled—a measure that is expected to cut the Federal employee roll by up to 10% by 2015.

Additionally, lawmakers are looking to reform compensation offered by the Federal government to its employees. In attempting to have Federal employees contribute to their pensions (coupled with benefits and pay changes) to be on par with the private sector, the House Budget Committee expects to trim an estimated $132 billion.

One of the factors that fuels the debate over cutting compensation is the average earnings between the public and private sector. Numbers and reports used to refute or corroborate reasoning seem to vary, however.  A Huffington Post article suggests that it might be as much as a quarter less from public to private in similar positions while a 2012 Congressional Budget Office report suggests that public-sector employees earn 16% more in total compensation.

As an organization dedicated to preparing job seekers for tomorrow's global economy and supplying employers with a trained and reliable workforce, KRA Corporation empathizes with those unemployed Federal employees and hopes for their speedy reintegration into the workforce.

In our efforts to improve the lives of individuals and strengthen the communities in which we live, KRA Corporation will continue to support the mission of Federal, state, and local agencies by servicing the needs of all those seeking employment through our innovative and comprehensive One-Stop Career Center Operations for WIA-eligible Adults, Dislocated Workers, and Youth and TANF Employment Services, regardless of political or economic environment.