Jobs available
In December 2002, executive recruiter Chris McLinden found himself without a job after his employer, Dice Inc., which operates a job-posting Web site for technology professionals, worked to cut costs and ultimately filed for bankruptcy.
In four years at Dice, McLinden had worked himself up to a high-paying and prestigious job as director of corporate sales. Suddenly, at the age of 44, with a stay-at-home wife and a child, he was out of work. He interviewed for jobs, but said hiring managers were put off by his age and his salary requests.
“They see gray hair and wrinkles and see a dollar amount and there’s a disconnect,” McLinden said. “I thought, ‘What do I do next?’ Health care was a forefront concern. I became a temporary Democrat.”
Rather than settle for a low-paying job, McLinden did some consulting work and ultimately decided his best chances for success would come from his own efforts, and he started his own staffing company, Axis Human Capital, in Clive.
In the past year, as signs have grown stronger that the U.S. economy is improving, many employment experts, economists and politicians have puzzled over why employment figures have not grown more quickly. Indeed, the number and the quality of jobs available in Iowa and across the nation has become a hot-button political issue, and is likely to be one of the main topics of debate in the presidential campaign.
One explanation could be McLinden’s experience, and how his work is measured by two surveys the Bureau of Labor Statistics uses to measure job creation and unemployment. One, the household survey, questions 50,000 people at their homes to determine how many people are working. The other, the payroll survey, is based on a monthly poll of 400,000 companies.
Economists and the government tend to view the payroll survey as the more accurate indicator of employment. However, there is a lag in time between when a new company is created and when the government finds out about it and is able to add it to the payroll survey.
As a result, the payroll survey shows that more than 2 million jobs have been lost over the past three years, while the household survey shows that about 500,000 jobs have been created over the same period.
McLinden’s story is echoed in home offices, office parks, strip malls and small office buildings across the state and the nation. As the economic downturn of the last three years forced companies to streamline operations and shed workers, many longtime corporate employees found non-traditional ways to re-enter the workforce. Like McLinden, many started their own firms. The number of self-employed people has risen by 326,000 since 2001, The New York Times reported Feb. 22, citing N. Gregory Mankiw, chairman of the White House Council of Economic Advisers.
“There’s a lot of people out there like me,” McLinden said. Starting a new company “is a plunge that a lot of people in my age group, if they haven’t taken it already, are probably thinking about it. Entrepreneurs create the bulk of jobs in this country.”
Another reason employment growth is lethargic could be anxious employers who want to make sure the recovery is real before they begin to make investments in new workers. Hiring employees is expensive.
There are signs the situation is changing. Iowa Workforce Development last week said unemployment in the state dipped again in January, part of a six-month trend of falling jobless claims. In nearly a dozen interviews with Des Moines executives and people like McLinden conducted by the Business Record, most expressed optimism that hiring would accelerate this year and said they were making more use of temporary workers to cover heavier demand.
EMCO Corp., which manufactures and distributes storm doors, plans to add as many as 60 workers this year, increasing its workforce by about 7 percent. About half of those jobs will be in Des Moines, said Managing Director Mark McMichael.
“We’re expecting continued growth in employment,” McMichael said.
At CB Richard Ellis/Hubbell Commercial, Rick Tollackson, the firm’s president and chief operating officer, said there are five openings now out of a total workforce of 100. The company has been working to become more efficient over the past three years, eliminating entry-level positions and support staff, and asking senior-level workers to take on more responsibility. Employees are logging more overtime hours, but Tollackson said managers are cautious about asking their staff to work too much.
“You can’t wait too long, or you kill your staff,” he said.
To make sure companies are attracting the right workers, human resources experts said managers are dusting off compensation plans. Many companies have not increased worker salaries by much over the past few years, according to Barb Freyermuth and Bruce Bailey of RSM McGladrey Inc. As job openings grow, which some indicators show is happening now, Freyermuth and Bailey said the balance of power will shift back to workers. A year ago, about 19,000 job openings were posted on Dice’s Web site, McLinden said. Today, there are about 35,000 jobs available.
“Hiring is going to improve, and we’re seeing that,” said Bailey, who is a consulting manager at RSM. “The words that describe the feeling out there is cautiously optimistic. CEOs and presidents of companies are looking for individuals who bring creativity and a more enhanced skill set so they can come into the organization and take on more responsibilities than had ordinarily been part of that position.”
Despite the rosier picture, Iowa’s unemployment rate is not as low as it was in the late 1990s, economists said. And some companies continue to shed jobs as they attempt to make their aging factories more competitive.
Maytag Corp. confirmed last month it was cutting 170 workers at a laundry machine factory in its hometown of Newton as it works to fend off foreign rivals. The job reduction happened a day after the company said it would partner with Samsung Electronic Co. of South Korea to build laundry machines in Asia. Maytag said the cuts and the joint venture with Samsung were unrelated.
“The Samsung agreement is for future products,” said Lynne Dragomier, a company spokeswoman. “Every manufacturer has to balance supply and demand. That’s what this was really driven by. While volume is up at our other Maytag laundry plants, volume at the Newton laundry plant is down.”
MORE JOBS
Iowa’s seasonally adjusted unemployment rate dropped to 4.1 percent in January from 4.6 percent in December as manufacturers, which account for the largest portion of Iowa’s gross state product, began adding jobs and job cuts in other sectors slowed, Iowa Workforce Development reported March 4.
“Things are holding their own or getting a little better,” said Bill Voyce, a research economist at Iowa Workforce Development. “It doesn’t seem to be the same gloomy outlook we’ve been hearing.”
The jobless rate equals that of January 2003. Iowa’s unemployment rate has been dropping since the summer, mirroring a national trend. The U.S. Department of Labor said last month that the U.S. unemployment rate dropped to 5.6 percent in January, down from 5.7 percent in December and the 5.8 percent rate of January 2003.