For educational use only

The following comments are from Dr. Norm Matloff, an expert on the descrimination being practiced by the high tech industry with Congress and the Clinton Administration's help. BTW, a person of 35 is considered "old" by high tech employees, and are routinely replaced by less experienced H1B Visa holders who are in fact indentured slaves.

Note also that the underemployed woman profiled below is an experienced teacher. There is a great hue and cry going out from the Republicans and Democrats that there is a drastic teacher shortage. This sounds like another ploy so that schools can start importing H1B type teachers who will also be treated as indentured slaves at below market wages and no benefits. If this does to teaching what it has done to the high tech industry, there should be an even greater drop in the quality of education. However, the greedy people at the top will maximize their profits at the expense of everyone else. However, I can tell you that my sister-in-law, a highly experienced and awarded teacher, found herself in the same position. She was used as a substitute even though she taught full-time for 4 years in the same school system. This meant no benefits, retirement, etc. She is now working full-time at a day care center at a hospital at a greatly reduced wage, but with full benefits. Her only shortcoming was that she raised her family before starting her career in her early 40's.

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I was somewhat hesitant to post the enclosed article to the list, for fear that policymakers will misunderstand it. They may say, "Ah, a lot of the people found in this study would be perfect for the technician training now being funded by the H-1B fees." Again, the reason I fear them saying that is that the H-1Bs are programmers, not technicians, and thus the technician training does nothing to reduce usage of H-1Bs. As I said before, I am glad that some people will benefit from the technician training, which is great, but that does nothing for the older programmers.

Nevertheless, I am compelled to post this article because it takes such an "outside the box" approach to assessing unemployment and underemployment. Many people feel that the raw unemployment rate tells only part of the story. As you can see from examples here, there are people that the system just do not catch in computing unemployment rates, as well as those who are greatly underemployed.

This idea is of course controversial. We see disagreement among various "experts" in the enclosed article, and I vividly recall a panel discussion on it on NPR last year, involving three economists, including Bob Lerman. (Lerman has done research on the IT labor "shortage" issue, questioning the existence of a shortage, but on the radio show he was talking generally, not about IT.) The question at hand was, "Does the official unemployment rate, currently 4.3%, accurately reflect the real labor market conditions?" Two of the economists answered in the negative, saying that the "real" unemployment rate was 8 or 9%, not 4.3%. When it came Lerman's turn, though, and he was asked, "Professor Lerman, what do you think the true unemployment rate is?", he chuckled and said, "I think it's 4.3%," and then explained why he disagreed with the first two speakers.

Getting back to the specific case of programmers, I wish to state again that the reason unemployment rates are meaningless is that if they can't find programming work they must work as something else, e.g. as a Census taker, truck driver, etc. They may do this temporarily, while trying to get back in to the programming field, or permanently, having simply resigned themselves to never finding programming work again. The point is, as Gene Nelson said so succinctly, "The former programmer who is working as a truck driver counts in the government data as an employed truck driver, not as an unemployed programmer." In other words, such a person doesn't show up in the unemployment rates for programmers, even though they are clearly underemployed.

Another common case, often overlooked by policymakers, is that of the programming contractors. Two scenarios are common. In the first one, the person has done contracting for some years, but finds that he/she is getting fewer contracts than in the past. In the second scenario, the person was until recently a salaried programmer, but upon failing to find another salaried position, declares him/herself as a contractor, working sporadically. In both cases the person would not be counted as unemployed, but is underemployed.

The article follows below.

Norm

http://www.latimes.com/business/20000904/t000083074.html

Monday, September 4, 2000 Millions of Jobless Are Uncounted, New Study Says Employment: Other analysts dispute the survey's findings and say the evidence points to a tight state labor market. By LISA GIRION, Times Staff Writer Marthe Seegar considers herself unemployed. But because she works when she can, including a three-day clerical stint the week before last, she isn't collecting unemployment insurance and won't be found among the statistics in the state's jobless report. That makes her one of the undocumented unemployed--a pool of potential workers that the robust economy is passing by and that a controversial study released today by UC San Francisco suggests could be many times the size of the formal unemployment count. Seegar, 45, taught fourth-graders for three years and developmentally disabled adults for five. She has worked as a medical assistant, had clerical jobs and is taking a class to update her computer skills. Yet the North Hollywood woman says she has been unable to find a steady clerical job since she started looking in June. "I could get a job in a fast-food place, but that's not what I need," she said. "I need something more stable and something with benefits." UC San Francisco researchers, extrapolating from the results of a survey conducted between May 1 and July 9, estimate that the number of Californians who are willing and able but not working could be 3.4 million. The government reported that 895,102 Californians were unemployed in June. "There is in a sense a reserve army of people who expect to be back in the labor force, and it's just a question of finding the circumstances that will permit them to do that," said Ed Yelin, a professor at UC San Francisco's Institute for Health Policy Studies, and the primary researcher on the third annual California Work and Health Survey. That conclusion doesn't jibe with reality, said Stephen Levy, director of the Center for the Continuing Study of the California Economy in Palo Alto. "We are in a time when most economists would describe our problems as labor shortages," Levy said. "We have put an enormous number of people to work. We have put about 1 million people to work in the past five years in California that weren't at work in the past." Michael Bernick, director of the state Employment Development Department, also said he finds the survey results hard to believe. "That just doesn't correspond with what we're seeing. There is a segment of the population that's unemployed and having difficulty finding work. It's not 3.4 million," Bernick said. There are people who are not working even in this era of low unemployment rates, many of them disabled, long-term welfare or general relief recipients, or residents of some rural counties, where unemployment rates are as high as 31%, he said. But even when adding the 646,000 people the state believes want a job but aren't actively looking, the number only rises to about 1.5 million. "We're seeing the tightest job market in California in decades and a rare condition that we haven't seen in California--and I've been involved in job training for over 20 years--a rare condition where employers of all levels, large firms, small firms, low-skill jobs, high-skill jobs, are complaining of the difficulty of finding workers," Bernick said. "It's just a very rare historical condition." But for people such as Gregory Brown, a regular at a government-run job search center in Sun Valley, steady work is elusive. The San Fernando High School graduate and Air Force medical corps veteran has taken courses in justice administration and electronics technology at community colleges. He has worked as a mail handler, custodian, prison guard and electronics technician. He also has a chronic allergic condition that flares up if he misses his immunotherapy shots, which are available to him only twice a week during work hours at a veterans hospital. "It was hard to juggle with a job," said Brown, 47, who lives in a homeless shelter in North Hollywood, occasionally works as a paid television audience member and does not collect unemployment insurance. "I've long since been one of those that have not been counted," he said. Laura Trupin, a researcher who worked with Yelin, said the idea behind the survey was to discover how many people considered themselves available and willing to work. "The labor market has gotten tighter and people are saying there are labor shortages and not enough people to fill these jobs," she said. "With our survey we are showing quite a large number of people." Although the survey did not discover the reasons people were unemployed, Trupin speculated that, like Seegar, some may not be finding jobs that match their skills or wage needs. Some of them may be between jobs, and some may be parents waiting for children to go to school. "Is it that the jobs that are available are not paying enough? Is it that they have skills but not the right skills and employers are not offering training?" she asked. Paul Kostek, past president of the Institute of Electrical and Electronics Engineers-USA, a Washington, D.C.-based professional organization, said many members believe they are unfairly passed over for high-tech jobs, in favor of immigrants on H-1B special skills visas, because companies don't want to pay to train them in the latest technology or computer language. "Small companies and a lot of start-ups and medium companies are saying, 'We can't afford to train people. There's just no way we can afford to do it,' " Kostek said. "My response is, 'There are costs to starting a business.' " Yelin said the survey found many jobless workers who defy conventional ideas of the unemployed and shed light on one of the dark sides of the nation's economic boom. "The traditional explanation is they are young, unskilled or poorly educated, and certainly there is an element of that. The other side of it is they are older or inflexible or don't have the skills required," he said. "But the vast majority of people don't fit those stereotypes." According to the study, of the 3.4 million available workers: * 49% have held jobs within the past year. * 23% worked between one and three years ago. * 48% are ages 25 to 44. * 52% are women. * 55% have some college education. * 21% have bachelor's degrees. * 9% have postgraduate degrees. * 7% report that the jobs they have held longest in their careers were in computer manufacturing, electronics, the Internet, computer-related services, communications, media, graphics, engineering, and research and development. The results are based on telephone interviews by the Field Institute with 2,168 adults. Among other things, respondents were asked whether they met any one of three definitions of unemployment. According to the researchers' strictest definition, 1.6 million people were out of work. The broadest definition yielded 5.3 million. The definition that yielded the 3.4 million estimate counts people who reported having worked in the past and who want to work or search for work within the next year. By the government definition, most of these people do not qualify as unemployed. In order to be considered unemployed, people must have actively looked for work and may not have been paid for so much as an hour of work in the past month, said Ken LeVasseur, a senior economist with the U.S. Bureau of Labor Statistics. That definition found that 895,102 people, or 5.3% of the state's estimated 17 million workers, were unemployed in June. Yelin said the survey questions found people who reflect a broader untapped work force. "The standard cliche you hear is they are not ready for work. These are people who want to work, and they are people who have recently worked," he said. "We really are just scratching the surface here, and we want to get to the point where we understand why this pool is so large." Linda Fowells, program director for Computers in Our Future, a nonprofit organization that runs 11 Community Technology Centers in high unemployment areas across the state, said the survey should add fuel to efforts to link jobs with available workers through telecommuting and skills training. "It's an issue of mismatches of skills, opportunity and location," Fowells said. "In the centers, they are really trying to encourage [employers] they are in contact with to be flexible about who they look for to fill their needs." Neil Roberts, a career counselor at the job training program at Valley College in Van Nuys, said he is not surprised by the survey's results. "There's a lot of people out there who aren't working and have fallen through the cracks," he said.

-- K (infosurf@yahoo.com), September 05, 2000