Sunday, January 13, 2013

Political Uncertainty and Budget Debates: Why there may be more layoffs.

Local newspaper is predicting that many businesses may start a new phase of layoffs influenced by the political uncertainty we are still facing. The biggest threat is seen on our shores, with all the gridlock in Congress over the budget cuts crisis that will be debated next month. Which is, by the way, two weeks away from tonight. Add to that the uncertainty in Europe, talks of China facing a looming inflationary period and political instability around the world. We can expect some issues to continue to plaque us, but in today's global environment when economies are so closely linked as they are, there is plenty of reason to worry.

National unemployment rate remains at 7.8 percent, unchanged from the previous quarter, but down about .5 percentage points from last year. That has not been the case at the industry level. Unemployment levels in some sectors have either stabilized or decreased since last year, but others experienced an increase in job losses.

Let's start with business: Overall, the industry has performed well. I am pleased to report that unemployment in the accounting field has remained unchanged at 4.2 percent over the 2011-2012 period. On the other hand, the finance sector has seen a steady reduction in its unemployment rates with the largest reduction realized by financial examiners at 7.9 percentage points.

Here is how other industries performed:

  • Education: There was no change with post-secondary teachers, which remained at three percent. Unemployment in special education teachers declined by 0.3 percentage points, but teacher assistant job losses increased by 1.2 percentage points. A real shame considering that many public schools have been relying on their services lately due to past budget cuts. They face an even greater threat should February's budget debates cause further cuts. Unfortunately, librarians saw a 2.2 percentage point unemployment rate. Looks like our education system is still in tatters.
  • Health: This industry has had mixed results, with unemployment rates increasing for physician/surgeons and pharmacists by 0.2 percentage points, but health care practitioners remaining unchanged.
  • Social Sciences: Economists were not so lucky with a 1.8 percentage point increase. Maybe that stems from a persistent ailing economy. But then again, a 2.0 percentage point increase in unemployment was seen across most of the social sciences.
  • Entertainment: Since my teens made me sit through three grueling hours of Global Awards coverage, might as well. Unemployment rate among actors fell by 6.7 percentage points, but they apparently lost more managers and agents this year by 5.5 percentage points. Maybe we can get more agents hired after today's winners were announced.
Until this budget crisis passes, it is unclear how the unemployment rate will travel. Predictably, if those budget cuts pass, many government jobs will be affected, which will hit consumer spending, which will impact the private sector. Let's hope we can avoid this catastrophe.

For an occupation-wide look at unemployment levels, visit the Wall Street Journal's site at WSJ.com.

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