2009 Unemployment Duration in the United States by State

From the NY Times, unemployment duration in the United States by state. Still a very difficult climate for hiring in the United States.

Why Paychecks Could Shrink

"High unemployment and low inflation may lead to a decline in pay—and that could slow the recovery

For now, pay is still rising—a little less than 2% for the year through June 2008, according to the government's employment cost index. But the weak job market is creating the perfect conditions for a decline in pay: low inflation and high unemployment (9.7% in August). With a huge reserve army of unemployed—more than 2 million of them college-educated—it would be easy for many employers to demand concessions.

One of Wall Street's more bearish forecasters, Goldman Sachs chief U.S. economist Jan Hatzius, predicts that average hourly earnings will fall about half a percent from the fourth quarter of 2009 through the fourth quarter of 2010. Hatzius says his prediction accounts for workers' strong aversion to wage cuts. Without that adjustment, the projection would be negative 2%." 

 Source: Business Week

Fewer Layoffs Won't Mean More Jobs

"Companies, still wary of weak consumer demand, aren't doing much hiring. The trend could keep unemployment high for the next year.

Businesses will remain hesitant to hire as long as overall demand remains subdued, and that is almost certain to be the case in the coming year. Spending in the U.S. and elsewhere stabilized last quarter, but the lion's share of growth in the second half will come from companies replenishing their depleted inventories rather than from a resurgence in demand. Plus, businesses remain keen on cutting costs and keeping productivity high. Productivity, measured as output per hour worked, soared at a revised 6.6% annual rate last quarter, and another big gain is on tap for this quarter."

Source: Business Week

Add to this issue is the structural unemployment issue. There are those in the camp that say that temporary workers will be hired back first because companies may want to test out their demand thesis for additional workforce. The problem is that many positions will never return. These are those that are affected by structural unemployment.

Employers currently in the United States have a lot of leverage in terms of their workforce. Those are still hanging onto their jobs may get increased hours which is currently at 33.1 hours worked per work week. Say if an employer needs more production, they can invite their current work staff to bang out more nuts and bolts. Hence, this will in my opinion continue to be a weak environment for hiring.