Friday, October 25, 2013

The Need for Job Experience

Many job seekers know the phrase “We’re looking for someone with more experience.” It might be true but there are reasons to be suspicious it’s an easy way to end an interview: an excuse.

A few years ago the Bureau of Labor Statistics expanded their classification of occupational education and training to include job experience in related occupations and on-the-job training, or on the job experience, in addition to their review of necessary high school or college degree skills. When job applicants learn they need experience they usually think of experience working in the same occupation rather than experience in another related occupation, but the Bureau of Labor Statistics defines experience in both.

Experience in a Related Occupation

In the new expanded classification survey employers rate the experience in a related occupation to be 1) more than 5 years, 2) 1 to 5 years, 3) less than a year, 4) none. Almost all managerial positions require experience in the related occupations they will manage. For example, financial managers need more than five years experience in finance. Advertising managers need 1 to 5 years experience in advertising. It follows that finance or advertising managers need experience in finance or advertising before they are ready to manage others. There are 6.3 million management jobs in 2012 and ninety-five percent of them require experience in their related occupations.

First line supervisors are an additional layer of management and job applicants are also expected to have prior experience doing the jobs they supervise. First line supervisors had just over 6 million jobs in 2012 including first line supervisors of office and administrative support workers with 1.3 million jobs and first line supervisors of retail workers with another 1.2 million jobs.

Excluding management and supervisory occupations some other occupations where employers want related experience include judges with experience as lawyers, management analysts with experience as managers, information security analysts, web developers and database administrators need experience in computer work, instructional coordinators need teaching experience, and fire and building inspectors need work in the field.

Including management and supervisory occupations 82 of 839 occupations with data reported by the Bureau of Labor Statistics need experience in related occupations, which is just 15 percent of America’s 130 million jobs in 2012.

Job Experience in the Same Occupation

Job applicants should differentiate demands for experience in a related occupation from the demand for experience in the same occupation. Job experience in an occupation that adds to qualifications is defined in 5 categories of on-the-job training or essential on the job experience: 1) internships, 2) apprenticeship programs and 3) long, 4) medium and 5) short term on-the-job training programs.

After allowing for jobs that need experience in a related occupation, there were 110.9 million jobs left in 2012, but only 86.5 million of them needed some type of on-the-job training or experience to be fully qualified. Of those 86.5 million left to consider 52.2 million need a bit of informal on the job training of a month or less. Remaining jobs include 29.1 million jobs with a formal apprenticeship program, or employer sponsored long term training programs of a year or more or medium term training of one to twelve months. Finally, 5.2 million of the jobs of 2012 need a period of internship or residency to be qualified.

The Bureau of Labor Statistics on-the-job classifications shows the need for experience depends primarily on the level of formal education applicants bring to a job. In 2012 there were 399 occupations in the Standard Occupational Classification that required only high school or less than high school skills; 99 percent of the jobs in all but 3 of the occupations need previous experience for employers to be satisfied they are qualified.

These jobs are primarily in construction and production occupations along with selected office support, installation-maintenance-repair and transportation occupations. Some like carpenter, electrician, plumber, and machinist have apprenticeship or long term training needs; many machine setters, operators and tenders and assembly occupations in manufacturing require medium term on-the-job training. Customer service representative, office clerk and secretarial occupations require some on the job training or experience.
Without experience employers have a choice to pay more for qualified applicants or to incur the time and expense for on the job training to make someone fully qualified. Training expenses tend to be covered with lower entry wages.

As applicants apply for jobs that need more formal education the need for job experience goes down. There are 90 occupations that need one or two year post secondary awards or associates degrees, the Bureau of Labor Statistics reports 14.9 percent of these jobs in 35 of the 90 occupations need previous experience for employers to be satisfied they are qualified. Among the 35 occupations 18 have repairer, or installer, or both in their job title: electrical and electronic repairers, precision instrument repairers and so on. Another 8 have technician in their job title: audio and video equipment technicians, environmental science technicians and so on. Include firefighter, auto insurance adjuster, and desktop publishing.

There are 128 occupations that need BA degree training, only 11 percent of these jobs in 21 occupations need some long, medium or short term on the job training and experience. Actuaries, writers and editors, and interpreters and translators need long term experience after a BA degree. Employers usually expect financial examiners, credit counselors, insurance underwriters, and tax examiners to have, or to need, some on the job experience or training. Include public relations specialists from multi media and communications occupations and several specialized sales occupations that need some medium term on the job training.

The BA degree has 17 other occupations confined to architecture, public school teaching, and nursing specialties such as nurse practitioner that have required internships not included in the 21 occupations mentioned above. Internships draw a fine distinction between on-the-job training and education. For example, public school teachers typically do an internship as student teachers while they are still tuition paying students. Physicians do internships as paid interns and residents after they have finished medical school degrees.

Job applicants should be suspicious of anything called an internship unless it is required for an accredited degree or licensure. On some occasions internships have turned into a scheme to lure college students or recent college graduates into working for free, or for a minimal stipend. Abuses have occurred often enough that the Department of Labor has written rules to distinguish internships from what should be paid employment.

Unpaid interns should not be doing the recurring work of a business that would have to be done by a paid employee. It should be for a declared time period, but without fixed hours or the promise of a job, and only if there is a training benefit useful to all employers. Internships are not trial employment because employers are legally required to pay at least the minimum wage for employment.

Recent college graduates should be careful before accepting anything called an internship. Some companies have entry level paying jobs called internships because they end after a year without continuing employment, but normally internships are education not employment. Those with BA degree have skills for a job; internships mean delay and a dubious promise for the future.

Required internships in the Bureau of Labor Statistics listings apply only for those with BA or higher degrees and few apply outside of medicine and public school teaching. The 26 occupations that need MS degree skills do not have on the job training programs, only 12.4 percent of these jobs in 4 occupations need internships: all therapy and counseling occupations. There are no occupations that need PhD skills that require internships, or that have on the job training programs. Degrees generally substitute for experience.

Departing Words

The Bureau of Labor Statistics review of training and experience clearly establishes that experience is not as important as many employers say and many job applicants think. When the job add reads applicants should have at least 5 years experience, do not be intimidated. Know where experience counts and forge ahead to negotiate with the skills and experience you have. Doing the same job over and over for years does not necessarily add much to skills, if any. For occupations where experience really adds to qualifications the need for experience limits the pool of applicants and forces employers to pay higher salaries. Those who have the skills and confidence without the experience still have room to negotiate over wages and move to the front of the line. Remember employers want qualified applicants and skills count the most.

Monday, October 7, 2013

Mr. Boehner and the Debt Ceiling

The Congress has passed debt ceiling legislation for many years pandering to voters who worry debt is sin, or a symbol of excess, or brings economic collapse. As the economy grows debt grows creating a repeated cycle of debt ceiling votes. Taking a vote gives a minority of politicians an opportunity to make politically correct statements about the excesses of government and their noble efforts to limit the excess. Then the majority makes the only sensible decision and votes to raise the debt ceiling.

I have never heard a politician of either party try to explain the difference between Federal debt and all other types of debt, both public and private, even though at least some know the difference. Current threats to limit the debt and cause a default are not only irresponsible but unnecessary and put Mr. Boehner far out on a shaky limb.

Federal debt is unique among debt because the Federal government determines the money supply, always a human decision. In the United States money is nothing but a number held on double entry accounts. Coins and currency are assets to the non-banking public but a liability to the treasury and the Federal Reserve Bank. Personal and business bank accounts are assets to the banking public but liabilities to banks. Therefore, money is a non-interest bearing liability while federal debt is an interest bearing liability. In effect, money is non interest bear debt.

At any time and in any amount the U.S. Treasury and the Federal Reserve Bank can arrange to convert interest bearing debt to money, and allow payment of the government’s bills without default. They could pay off the entire federal debt in a day or two but they will not because it will increase inflation and their aim is to manage the economy in the best interests of everyone.

All previous presidents and the Congress have always played the debt ceiling game by the rules, which allowed everyone to max out on politics and then raise the ceiling. No one has questioned the authority of Congress to interfere with the constitutional requirement for the President to manage the government’s finances and pay the bills. The people who believe in debt ceilings want us to agree the Congress can pass legislation that prevents the President from doing duties spelled out in the constitution.

The President has whatever authority he needs to avoid default even if the Congress decides to be irresponsible and votes default. For Mr. Boehner to win the debt ceiling battle and push the government to default the President has to fail to do what he is able to do to stop it.