A Capital (Anachron)Ism

Plenty of interesting stories today....While I try very hard to get internships for my students, all paid ones, a report in today's NYT describes the "for profit" internship placement firms. In "Unpaid Work, but They Pay for Privilege" Gerry Shi writes that "With paying jobs so hard to get in this weak market, a lot of college graduates would gladly settle for a nonpaying internship. But even then, they are competing with laid-off employees with far more experience.So growing numbers of new graduates — or, more often, their parents — are paying thousands of dollars to services that help them land internships. Call these unpaid internships that you pay for.“It’s kind of crazy,” said David Gaston, director of the University of Kansas career center. “The demand for internships in the past 5, 10 years has opened up this huge market. At this point, all we can do is teach students to understand that they’re paying and to ask the right questions.” Not that the parents are complaining. Andrew Topel’s parents paid $8,000 this year to a service that helped their son, a junior at the University of Tampa, get a summer job as an assistant at Ford Models, a top agency in New York. “It would’ve been awfully difficult” to get a job like that, said Andrew’s father, Avrim Topel, “without having a friend or knowing somebody with a personal contact.” Andrew completed the eight-week internship in July and was invited to return for another summer or to interview for a job after graduation..."

An interesting report in the NYT, Job Growth Lacking in the Private Sector, reveals that "For the first time since the Depression, the American economy has added virtually no jobs in the private sector over a 10-year period. The total number of jobs has grown a bit, but that is only because of government hiring.The accompanying charts show the job performance from July 1999, when the economy was booming and companies were complaining about how hard it was to find workers, through July of this year, when the economy was mired in the deepest and longest recession since World War II. For the decade, there was a net gain of 121,000 private sector jobs, according to the survey of employers conducted each month by the Bureau of Labor Statistics. In an economy with 109 million such jobs, that indicated an annual growth rate for the 10 years of 0.01 percent.Until the current downturn, the long-term annual growth rate for private sector jobs had not dipped below 1 percent since the early 1960s. Most often, the rate was well above that.As can be seen from the charts, there were some areas of strength in the economy. Health care jobs continued to grow, particularly jobs that involve caring for the elderly. Home health care employment rose at an annual rate of 5 percent, a rate that indicates a total gain of more than 60 percent. On an annual basis, that was twice the overall rate for health care of 2.4 percent a year.There were also job gains in education and in a host of service industries, including lawyers (0.7 percent a year), accountants (0.9 percent) and computer systems designers (2.4 percent). The field of management and technical consulting leaped at an annual rate of 5 percent.But while designing computers and related equipment was a growth field, building them was a very different story, as the manufacturing shifted largely to Asia. The number of jobs making computer and electronic equipment in the United States fell at an annual rate of 4.4 percent, substantially more than the overall decline in manufacturing jobs, of 3.7 percent.That was a better showing than that of the automakers, which shed jobs at a rate of 6.7 percent a year. By contrast, auto dealers cut jobs at a much slower rate of 1.3 percent a year, although that rate may accelerate later this year as General Motors and Chrysler dealerships are closed.Hard as it may be to believe, the consumer economy of the United States actually lost retail jobs over the decade, at a rate of 0.2 percent. There were fewer people working in food stores. But the category of general merchandise stores — like Wal-Mart and Costco — showed an impressive gain of 1 percent a year, even though the category also includes department stores like Macy’s, where the number of jobs has fallen.For a good part of the decade, the construction business was a growth industry. But there are now fewer jobs there than there were a decade ago.The total picture is of an economy that has changed in substantial ways over the decade. After the recession ends, job growth is likely to resume. But there is no indication that the secular trend toward a more service-oriented economy will reverse. A decade from now, there are likely to be still more jobs at architecture and engineering firms (up 1.2 percent a year over the last decade) and at bars and restaurants (up 1.8 percent a year). But few expect that manufacturing will reverse its long decline as a major employer in the United States."

**It has to be noted that this analysis is based on the BLS data, which is highly suspect.

Telling it straight... "Urging consumers to spend like bleeding a sick patient, Allstate CEO says."

Allstate Corp. reported its first profit in a year, as the recession continues putting the brakes on its business, but Chief Executive Tom Wilson doesn't want economic growth at all costs.Consumers need to spend less and ratchet back their debt, even if it means they buy fewer homes and cars, cutting into Wilson's property and casualty insurance operations. "Trying to encourage consumers to spend and take on more debt...it's like bloodletting," the Allstate chief said in an interview Wednesday afternoon.To combat the recession effectively, he said, "We need to be prudent about how we grow out of it."