The Long & Short of Jobs

In a complex and changing economy, the news is not always what it seems. Last week the Labor Department reported that unemployment jumped sharply in May, rising from 3.7% to 4% of the nation's work force. Bad news? Well, maybe not. The increase was welcomed in many quarters because it indicated another release valve on the nation's inflationary head of steam. Beyond that, closer inspection of statistics showed that the rise was expectable and explainable.

Student Rush. The jump in joblessness was caused almost wholly by full-time students looking for short-time work--high school and college youngsters who began last month to seek summer employment. Even more of them are scouting around this month, and unemployment could rise further in June but later drop off. This is, of course, an annual, seasonal phenomenon. Last year unemployment fell from 4.8% in April to 4.4% in May, then hit 5.5% in June before tumbling to 4.6% in July. This year's pattern is likely to be somewhat different because many students went job hunting earlier than usual.

They have been spurred by publicity about the Government's campaigns to help them find work. Under federal sponsorship, such personalities as Labor Secretary Willard Wirtz, Astronaut Frank Borman and Mickey Mantle are making televised appeals to businessmen to hire young people. Disturbed that few companies are eager to hire unseasoned or draft-eligible workers, the Government has ordered federal agencies to take on one temporary employee this summer for every hundred regulars on the roll. The program is paying off. Of the 1,000,000 teen-agers searching for summer work, at least two-thirds should find it, though computers are eliminating some of the jobs once open to them.

Apart from the teen-age sector, employment is holding firm. In May, 73.7 million Americans were working, up 659,000 from April. The situation was particularly firm for the two most important groups in the job market: unemployment remained at a steady low of 2.4% among adult men and 1.8% among heads of families. Skilled workers have no trouble finding work, but employers have plenty of trouble finding them. Going begging are positions for lathe operators, carpenters, shipfitters. Among cities classified by the Government as having the tightest labor markets are Atlanta, Milwaukee, Cleveland and Rochester. Demand for this month's 600,000 college graduates is strong enough that they will easily find work at salaries 5% to 10% higher than last year's (current average for a liberal-arts graduate: $6,300).

Shattered Guideline. As the supply of skills falls, the price of labor rises, and the Government's 3.2% wage guideline is being shattered with impunity. Last week a presidential mediation panel authorized a 3.5% increase to 35,000 airline machinists. Plumbers in San Francisco two weeks ago won an 8% rise to $8.23 an hour, now collect more than most doctors for a house call--at least $14.

The White House goes along with such settlements, seems to be depending on other temporary slowdowns in the economy to halt inflation. The Federal Reserve Board has made money tighter than at any time in the past six years, and major banks, for lack of funds, are beginning to turn down even regular customers. Bankers would not be at all surprised to see the Federal Reserve increase the discount rate again in the next several weeks. Consumers are also spending less: retail sales in May dropped 2% , the second straight monthly decline. Not the least of the indicators, in an economy where many young people are working mainly to bankroll a new car, is the softness in auto sales. Continuing a two-month downturn, sales in the last ten days of May were 4.6% below the same period of last year.

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