Michael Trust

Given the recent spate of horrible economic news, it’s easy to become discouraged in your job search. While there is no magic bullet to fix the very weak economy, there are jobs out there and people are being hired. It’s not easy, but it is happening. Let's look at the negative and then the positive factors affecting job growth and thus your job search.

Let’s look at the negative news and how it might affect your job search:

• The US debt is skyrocketing and our usual creditors are becoming less interested in lending to us for fear (legitimately) of a default at some future point. Without the ability to borrow, or the reality of borrowing at high cost, the federal government is unable to spend as much and must cut programs. Defense and social programs are likely the first areas to be cut. How does this affect you as a job seeker? Many highly paying jobs in the defense industry and many jobs that do not often pay as much, but that have a great work-life balance and that make a positive difference, and that were stable in the social services industries that are funded by block grants or other federal funding are in serious jeopardy.
• The bi-partisan commission that Congress has approved to study the future debt has a few months to make tax increase (revenue), spending reductions (cuts), or a combination of both recommendations to Congress. Barring an agreement in the new few months, and Congressional approval by the holidays, automatic, massive cuts are triggered across the board. This leaves the financial markets and employers with much uncertainty about the future of their operations if they derive any of their revenue from federal funds in any form.
• At some point in the near future, hard decisions will also have to be made by Congress about the future of Social Security and Medicare - outside of the interest payments on the debt, the next two largest expenditures in the federal budget. Expect massive cuts to future beneficiaries. The effect on employment of this expected change is employee demands for better retirement programs - perhaps even a return to the old-fashioned pension programs that rarely exist in the private sector any longer (commonly referred to as “defined benefit plans”); in fact, many new entrants to the workforce are using the existence of a defined benefit plan as a criteria when considering job offers. It’s an unexpected turn in the mindset of many younger job seekers. If employers expect that they will need to fund some portion of and manage defined benefit plans, and/or increase matching contributions to defined contribution plans (e.g.: 401(k), 403(b), 457, etc.), that will hit their bottom lines, and thus employers may be less interested in making a large number of hires.
• At the same time, employers are gearing up for current and expected future costs related to healthcare reform. There are huge costs in reporting requirements, caps on coverage, mandated “free” coverage (nothing is “free”; it has to be paid for somewhere), and a likely push to shift retiree health costs to employers and away from Medicare at some future point - either with cost-sharing, or with making the employer plan the primary plan and Medicare the secondary plan. Again, these costs affect employers significantly, and thus may make them less likely to hire.
• It is likely that payroll taxes on Social Security and Medicare will increase to help cover these costs. As both the employee and the employer contribute to these payroll taxes, employers may find themselves having to pay more to attract and to retain top talent (cost) to offset the lower net pay of employees, as well as have to pay a higher payroll tax cost, which likely will discourage employers from hiring.
• Finally, corporate tax rates, already amongst the highest in the developed world, may be increased to generate more revenue for the federal budget. This affects the bottom line of employers, and thus there is less money to hire new employees.
• Both the federal government and highly regulated states continue to pass business-quashing regulations that force businesses to move to more business-friendly states and business-friendly countries.

These factors are in addition to the cash crunch that most states are now facing, and thus are reducing services that directly employ people.

Let us look at the positives of the situation:

• Technology companies are booming nationwide. There is a shortage of highly skilled technology employees and people with these skills are contending with multiple job offers. This is an industry that will continue to grow.
• Certain sectors in the defense industry will continue to grow - those who design and manufacture the newest generation in weapons systems that minimize human risk (think drones, electronic warfare systems, and the like).
• The healthcare industry will continue to grow, especially those organizations who are not solely and/or not heavily dependent on Medicare and Medi-Cal (Medic-Aid) payments.  While the Medicare-covered population will continue to grow, there is the ever-present risk of the federal government reducing reimbursements, which affects cash low. Medi-Cal/Medic-Aid is already being cut in many states and will be cut further if the federal government triggers kick in. This will also reduce cash flow to these organizations, and thus affect hiring except for all of the most urgently needed clinical positions. Healthcare has historically always needed nursing and allied health professionals to keep providing a high level of service. This will continue to be a high growth industry. In addition, as more healthcare organizations consider moving to Accountable Care Organization models as part of healthcare reform and to cut costs, managers who have experience in this area will be in high demand.
• Public Safety positions are generally always in need (think police, fire, paramedic, EMT, emergency management, Homeland Security, etc.)
• There is a huge need in most parts of the United States for trasdespeople: plumbers, electricians, carpenters, masons, linespeople, roofers, etc. In our nation’s focus on higher education over the last few generations, we have neglected to train large groups of people for these types of positions. These positions generally pay well and the best part is that there will always be a need, and they can’t be outsourced.
• The federal government is pushing initiatives to train people in STEM: Science, Technology, Engineering, and Math. Getting skills or advancing your skills in any of these areas is likely to pay off. As the United States pushes to move more manufacturing onshore back to the United States, and pushes to continue innovation and development, and to push alternative energy (hot growth areas for people with STEM skills and trade skills), these particular areas should have high growth rates.]
• About 1,000,000 teachers will retire over the next few years nationwide. While right now, many teachers are being laid off or furloughed, that not likely to be the case in the future and there appears to be a strong need in the next few years for teachers.

So, while the economic outlook may be dreary, there are many bright spots that are not generally discussed with much fervor in the mainstream media.  For one to get the right skills may require more job training (many states offer grants for this) or relocation; however, education is usually never a bad thing; and, relocation, while possibly disruptive, may result in a much better set of opportunities.

Step back and think about your skill set, where you may need to improve or learn an entirely new skill set, and then go for it!!