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Why Oh Why Can't We Have a Better Press Corps? (MIchael Fletcher of the Washington Post Edition)

Unemployment Rate in the City of Fresno, Not Seasonally Adjusted.png

Fresno, CA--along with much of the rest of the great Central Valley--has long had a structural unemployment problem. Back at the start of the 1990s when the unemployment rate in the country as a whole was 7.5%, the unemployment rate in Fresno was 15%. At the end of the 1990s when the unemployment rate in the country as a whole was 4%, the unemployment rate in Fresno was 10%. Now when the unemployment rate in the country as a whole is 9.5%, the unemployment rate in Fresno is 16%.

Fresno has--and has long had--a structural unemployment problem. It has long been difficult for employers to get well-trained and skilled workers to locate in Fresno. But the country as a whole does not have a structural unemployment problem.

The very disturbing thing is that Michael Fletcher of the Washington Post does not seem to have a clue that Fresno's structural unemployment problem today is no worse than it was in 1999 or indeed in 1992.

And Michael Fletcher of the Washington Post does not seem to have a clue that it has never been wise to generalize from the state of Fresno's labor market to the country as a whole.

Why oh why can't we have a better press corps?

The lead:

Why does Fresno have thousands of job openings - and high unemployment? Michael Fletcher: FRESNO - This city is grappling with one of the most troubling contradictions of the new economy: Even as it has one of the nation's highest unemployment rates, it has thousands of job openings. The dilemma is becoming more common across the country as employers report increasing numbers of job openings. But many of those jobs are not a good fit for those who are out of work. The reason, economists say, is that the recession accelerated the decline of some industries, such as housing construction, as others that require far different skills, including health care, emerged stronger. Some economists predict that this disconnect is likely to grow as the economy develops jobs that require more training....

Evidence of a skills mismatch became increasingly clear in Fresno after the housing bubble burst, causing joblessness to nearly triple. Unemployment hovers at 16.9 percent, but managers at the 7,000-employee Community Medical Centers say they cannot find enough qualified technicians, therapists, or even custodians willing and able to work with medical waste. The situation is much the same at Jain Irrigation, which cannot find all the workers it wants for $15-an-hour jobs running expensive machinery that spins out precision irrigation tubing at 600 feet a minute, 24 hours a day, seven days a week. "The job requires at least a high school education, and maybe some technical training, but we don't seem to be getting the right people applying," said Aric J. Olson, Jain's president.

FRED Graph - St. Louis Fed.png

Note the absence of names. Note the lack of numbers on the "increasing number of job openings" that Fletcher claims employers report. Note the lack of backing at all for the assertion that skills mismatch in Fresno today is any greater than it was back in 2000, or indeed in 1992.

And let's go hunting for Fletcher's sources. We find this: Stephen Rose of Georgetown University on how our problems are not structural but rather due to a shortfall of aggregate demand:

The puzzling gap between jobs and hiring has touched off a furious debate among economists, one that holds serious implications for how policymakers attack the problem. Some economists say the persistent lack of hiring is due mostly to weak demand caused by cutbacks in household consumption and business investment. They add that though the economy is improving, job openings remain scarce: There are 4.6 jobless Americans for each opening, according to the Labor Department."Economies are funny," said Stephen J. Rose, a senior economist at Georgetown University's Center on Education and the Workforce. "They seem to work so well, but when they get knocked off their moorings, it takes awhile to reorganize everything"...

OK. That's one side. Where's the other side?

Others say the problem is largely structural, meaning that a large share of jobless workers will have to acquire new skills before they can return to the workplace...

No names, no quotes.

Fletcher goes on:


Still others think both factors are at play. The steep economic drop from the housing and financial bubbles that preceded the recession only amplified structural changes that are always occurring in the job market, they say. "Should construction have been as large a part of the economy as it was?" said Jason Pride, director of investment strategy for Glenmede Investment and Wealth Management, a Philadelphia-based firm that manages $19 billion in assets. "Probably not. But it persisted for 10 years and drew a lot of people in. Now some of those people have to take a step back and find new skills. It doesn't matter that people may be fairly skilled in one industry. Their skills may not be applicable to other fields." Switching fields often isn't as simple as taking a class or two. In the coming years, the nation's workforce is going to need many more workers with college degrees and industry certifications, according to a report last year by Georgetown's workforce center.

On the one side, Stephen Rose the labor economist.

On the other side, nobody.

In the middle, Jason Pride the money manager. It is certainly true that switching occupations often is not simple. Does this mean that getting low-cost and high-quality labor is a big problem for American businesses today? No. Poor sales is a big problem. Labor cost and labor quality together are no bigger a problem than the cost and availability of insurance.

And at the end of the article there are paragraphs in which Fletcher appears to say that he knows damned well that his lead is simply wrong--that Fresno's structural unemployment problems have been around for decades and are not emerging right now because of accelerated structural change:

The city sits in the heart of the nation's most abundant agricultural region, which has been both a boon and a burden: The seasonal nature of production has saddled the region with unemployment rates that are typically far above the national average.... Fresno is home to 160 companies that make products such as irrigation components that provide exact water flows, allowing uniform crops with minimum water use. The region is also a center for filtering and other control systems for all types of liquids. However, those innovative companies often struggled to find employees.... [A] 2004 survey of Fresno area employers discovered thousands of job openings despite relatively high unemployment. "It was a total light bulb moment for me," [Mayor] Swearengin said. "The survey revealed a whole other problem. Certainly, a company needs demand for a product. But if they don't have people with the skills to fill jobs, it is hard to sustain growth."...

Claude C. Laval III is chairman of a company that makes filters.... Finding the people he needs - first-rate welders and workers comfortable running computer-controlled equipment - is a constant challenge, he said. "Getting well-qualified, smart people who want to work in an industrial environment is not easy," he said. Laval said the local workforce-training system, while rightfully focused on the impoverished and the unemployed, is almost always a step behind when it comes to meeting the evolving needs of employers.... "There is not an easy way for people to find out that the opportunity is there or, conversely, the qualified person is there to be hired," said Blake Konczal, executive director of the Fresno Regional Workforce Investment Board...