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Job Support Group Leader Newsletter
September 2007
Job market talking points
Over the past few weeks, concerns about the continuing growth in the economy and the job market have emerged. On the positive side:
- Recent numbers from the Institute of Supply Managers show an expanding economy in both manufacturing and services.
- Consumers continue to spend, with retail sales above estimates for August, the most recent data.
- Personal incomes after taxes and inflation are still rising by 3.8 percent for the twelve months ending in July.
On the other hand, there are concerns:
- US companies are experiencing their first profit declines in five years, and tax collections on company incomes are down versus a few months ago.
- The current credit shortage will affect US companies negatively-if companies cannot borrow enough money to meet operating needs, they will be forced to reduce operations, which will include layoffs of staff.
According to Larry Kudlow, economist, we can reverse the above scenario with a reduction in the base interest rate of the economy, the interest rate for federal funds. If the Federal Reserve steps up shortly to reduce rates, this economy can continue on track for growth. So why does all this matter?
History offers insights
The US economy grows and prospers on the basis of spending by consumers (66%+) and businesses (34%). All spending creates jobs, so a healthy climate for spending and credit to support spending is vital to job growth.
The one event we can point to in history where the US economy failed to address the needs for a healthy spending climate is the Depression.
In October, 1929, the stock market crashed due to the deteriorating conditions of the US economy. At that timel, it was clear that the US economy was entering a recession. The economy could have worked through to a normal recovery (the average time is six to nine months), but was instead impacted by two decisions of the federal government:
- Congress realized that tax revenues were declining due to the recession, so it raised taxes to balance the federal budget.
- The Federal Reserve became concerned about inflation, so it took actions to reduce the money supply (selling bonds, taking in revenues).
Those two actions sunk the economy further. First, raising taxes reduced the spending power of consumers and businesses, prolonging the recovery process. Secondly, the actions of the Federal Reserve took money out of the banking system. Banks cannot function without adequate levels of cash (liquidity) to cover daily transactions. The money shortages reduced the availability of credit and triggered hundreds of bank failures across the US. Millions of Americans lost their life savings, since bank deposits were not insured at that time.
With reduced funds for consumer and business spending, and less resources for borrowing, the economy continued to decline. The low point of the Depression was 1933, when unemployment was 25%. One out of four Americans was out of work, in an era when unemployment compensation did not exist. It took a few more years for the economy to enter a recovery phase.
So the lessons learned from history are: we know what happens when consumers and businesses have less to spend, or the banking system has reduced cash resources and/or reduced credit. If you have been following the financial news lately, the Federal Reserve has taken action to assure that the banking system has adequate cash for daily transactions. That's good news for the economy.
Conclusion: Let's hope the Federal Reserve takes action soon to reduce interest rates and improve the credit climate.
Job search successes
Have a job search success story to share? Email your comments!
Special Announcement
What Color is Your Parachute? author Dick Bolles offers support and comments on Work Ministry in the 2008 edition of his upcoming book! Thanks for your support Mr. Bolles!
Connecting with employers
As a job search coach, you have probably heard a few job seekers discuss the barrier of "no experience in our industry." Here is a summary of one job seeker's response that may be helpful to you in coaching your job seekers:
A job seeker had an opportunity to conduct a phone screen interview for a position that seemed to be a great fit. She was technically qualified to do the work, but lacked hands-on experience in the industry and the company's actual business. If she did well on the phone screen, an interview would be scheduled. Sound familiar? Here's how it went:
Interviewer: "In my review of your resume, I see that you have not had any experience in our industry. What are your thoughts?"
Candidate: "You're right- I do not have direct experience in your industry. I don't carry that burden."
(pause for interviewer laugh)... "Instead, I bring a lot of experience from an industry that has been through a lot of change too. Give me an opportunity to quickly learn what I need to learn and apply what I do know to contribute to the company."
Recommendation:Prepare your clients to overcome the lack of hands-on experience in a specific industry. Instead, they should be prepared to say:
"....I don't have that burden. And...(options):
- my experience is in an industry like yours in .... and .....
- my experience is in an industry that has undergone major changes in .... and .... that will enable me to contribute to your company as it faces those changes.
- My industry experience is in areas that your industry is just beginning to deal with, such as ...and...
Alliance Partners
We support the following resources in service to job seekers:
- BPWUSA.org Business and Professional Women USA
- HACE: Hispanic Alliance for Career Enhancement
- Jobkabob.com: sell your skills, not your work history.
- Career Concepts USA: Job Fair resource
Have a success story or best ideas for job search to share? Send an email to leader@workministry.com.
Reminder:
Workministry.com has a growing list of job posts as well as continual improvement in resources for JSG Leaders and job seekers. Please make a
point of asking your group members to check the site, review the job posts and respond or send along to a friend, relative or former group
member.
Editor’s Note:
The Job Support Group Leader newsletter and message board are all about you. Our goal is to create a forum for
sharing information that helps you fulfill your mission. If you have feedback, ideas or suggestions for either the newsletter or the message
board, please send email to: leader@workministry.com.
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