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Fixing the Unemployment Problem

November 29, 2010
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Mike Murphy

Recent reports indicate that unemployment, though easing somewhat, will continue to be at relatively high levels, with some projections ranging from 8.3 to 9.6 percent by the end of 2011.

Sorry to start off with what may appear to be such dire statistics, but there really is a bright side: As the job market improves, many of the 1.2 million people who are currently not seeking employment will return to the labor force, thus continuing to drive up the unemployment statistics.

Hmmm, you may be thinking, “A bright side? This really is not sounding so good.” Let me assure you there is a light at the end of the tunnel.

I am reminded of a friendly engineer I once worked with who often took advantage of my naivety, playing me like a banjo, stringing me along as the straight man for his good/bad routine. Here is how it worked: The friendly engineer (let’s call him Steve for purposes of illustration) started off by saying, “The good news is …, after which I was to reply, “Oh, that’s good.” Then, he would counter with, “No, that’s bad …, after which I was to reply, “Oh, that’s bad.” On it went in a fashion until he had me totally confused, similar to how most economists make their living today.

THE GOOD NEWS IS ...

Steve: The good news is that the job market is beginning to grow.

Fool: Oh, that’s good.

Steve: No, that’s bad, because a huge portion of the work force is actually sitting on the sidelines; a group known as discouraged workers. They are simply waiting for better times to come back before attempting to seek employment, so therefore, the unemployment figures will remain relatively high even if job growth surges.

Fool: Oh, that’s bad.

Steve: No, that’s good, because when this group does reenter the work force, many of these qualified people will help to increase overall productivity in the economy.

Fool: Oh, that’s good.

Steve: No, that’s bad, because about one-third of these qualified returning workers are Baby Boomers. Many of them will be playing golf soon, so the number of retiring Baby Boomers will continue to thin the work force, more than offsetting the re-entry of other workers.

Fool: Oh, that’s bad.

Steve: No, that’s good, because even though the Boomers will retire, many of them will likely find themselves returning to the work force.

Fool: Oh, that’s good.

Steve: No, that’s bad, because the reason they will return is that the value of their homes and stock portfolios are so far down in the dumper that they will grudgingly come back to work.

Fool: Oh, that’s bad.

Steve: No, that’s good, because the reduced number of younger people joining the work force has created a drought of talent to fill the many jobs that are available. For example, it is estimated by the U. S. Department of Labor that there are nearly 20,000 technical HVAC jobs per year that may go unfilled. The industry really depends upon the older talent to fill these jobs.

Fool: Oh, that’s good.

Steve: No, that’s bad, because these older HVAC technicians are actually getting better at golf as they age. Their exit from the HVAC industry is still likely to offset the dwindling number of newcomers to the industry.

Fool: Oh, that’s bad.

Steve: No, that’s good, because the competition for jobs is heating up. Many people are taking this time out of work to seek additional training and education. Enrollment in secondary education is up, so the number of better-qualified people should be increasing. Currently there are three accrediting agencies for HVAC educational programs: HVAC Excellence, the National Center for Construction Education and Research, and the Partnership for Air-Conditioning, Heating, and Refrigeration. Many of the people seeking additional training and education have sought out online resources from organizations such as HVACRedu.net, which offers more than 400 courses, many of which are North American Technician Excellence (NATE) approved.

There is renewed interest in technician certification as organizations like NATE are assembling data that indicates certified technicians actually have reduced callback rates at contracting businesses, and therefore, warranty costs at manufacturing companies are also being reduced.

Though unemployment is currently high, the HVAC industry continues to position itself for better times ahead. In fact, if the general unemployed public only knew of the opportunities that lay in wait, the ranks of the unemployed could be greatly reduced.

Fool: That’s good.

Steve: Yes, that really is good.

Fool: I knew I would finally get it right.

Publication date: 11/29/2010
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