Jobs creation rebounded last month with U.S. employers adding 261,000 in October. This resulted in the unemployment rate dropping to 4.1%, its lowest level since December 2000.
However, this was not a totally joyful scenario according to most economists, who expected 315,000 new jobs last month.
Unfortunately, as I shared the second part of this 4-part job creation series, one of the major tools governments are employing for job creation is cash incentives to recruit new jobs, companies and industries. This will probably be the centerpiece of the successful recruitment of Amazon’s second headquarters and expected hiring of 50,000.
Fortunately, there are better ways for recruiting more high paying jobs into the U.S. economy especially in the talent areas of R&D (research and development), scientific, engineering, IT (information technology), technical and manufacturing that my recruitment firm specializes in.
Labor Department Jobs Figures Satisfactory, But Not Great!
According to today’s Labor Department figures, wages rose only 2.4% from a year earlier, a slowdown from the prior month. The average hourly earnings for private-sector workers decreased by 1 cent or 0.04% last month to $26.53 an hour; falling short of economists’ expectations of a 0.2% monthly gain.
Though the Labor Department revised upward its September’s hiring figures, from the first drop in seven years, to a net creation of 18,000 new positions, a lot more needs to be done.
Additionally, service-sector employment, was the major contributor to October’s jobs growth. The leisure and hospitality sector added 106,000 jobs after losing 102,000 in September. This is versus high paying technology jobs requiring engineer, scientist, IT, R&D, technical and manufacturing professionals.
Finally, the share of Americans participating in the labor force fell by 0.4 percentage point to 62.7% in October, the lowest reading since May. In October, 6.52 million workers who wanted a job couldn’t find one. And a broad measure of unemployment that includes Americans stuck in part-time jobs or too discouraged to look for work fell to 7.9%, matching its lowest level since 2006.
A Better Job Solution: More Small Business Cultivation!
In my last article I offered two job creation suggestions: a) assisting entrepreneurs like Peter Rahal founder of RXBAR, which Kellogg Company recently purchased for $600 million and b) focusing more efforts on nurturing R&D, scientific, engineering, IT, technical and manufacturing talent.
Related to those two points the Bureau of Labor Statistics and the Small Business Administration have compiled some interesting facts pointing to a greater need for small business cultivation. For example, were you aware that Small businesses create 2 out of 3 net new private-sector jobs?
Since the end of the Great Recession, small businesses (fewer than 500 employees) have created 62 percent (8.3 million) of the net new private-sector jobs (13.4 million), matching their historic rate over the last 25 years.
Additionally, existing businesses create close to 90 percent of new private-sector job gains. For both small and large firms, the bulk of new jobs are from expansions of existing firms. Observing the job gains over the last two decades, 87 percent of the job gains were from existing businesses and 13 percent were from startup business establishments.
As a result, a lot more needs to be done to both: 1) cultivate entrepreneurship and 2) assist on-going small businesses. This can include lower taxes and fewer government regulations that stifle entrepreneurs.
Additionally, more needs to be done to improve STEM education because future engineers, scientists and technical talent will create future technology businesses that will recruit the most jobs!
Final Part Of Jobs Creation Suggestions Coming Soon!
In my fourth and final part of this 4-part series on jobs creation ideas, I will offer another novel idea for boosting our job base. I hope you enjoy.
