September 2019 Jobs Report and Industry Update
“THE EMPLOYMENT SITUATION — August 2019”
“The fast and the curious: Fitter adults have fitter brains”
“Why should you care about AI used for hiring?”
“The birth of vision, from the retina to the brain”
“Employee contract structures in startups can be determining factors of success”
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Economics & Job Creation:
THE EMPLOYMENT SITUATION — AUGUST 2019
Total nonfarm payroll employment rose by 130,000 in August, and the unemployment
rate was unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported
today. Employment in federal government rose, largely reflecting the hiring of
temporary workers for the 2020 Census. Notable job gains also occurred in health
care and financial activities, while mining lost jobs.
This news release presents statistics from two monthly surveys. The household
survey measures labor force status, including unemployment, by demographic
characteristics. The establishment survey measures nonfarm employment, hours, and
earnings by industry. For more information about the concepts and statistical
methodology used in these two surveys, see the Technical Note.
Household Survey Data
In August, the unemployment rate was 3.7 percent for the third month in a row,
and the number of unemployed persons was essentially unchanged at 6.0 million.
(See table A-1.)
Among the major worker groups, the unemployment rates for adult men (3.4 percent),
adult women (3.3 percent), teenagers (12.6 percent), Whites (3.4 percent), Blacks
(5.5 percent), Asians (2.8 percent), and Hispanics (4.2 percent) showed little or
no change in August. (See tables A-1, A-2, and A-3.)
The number of long-term unemployed (those jobless for 27 weeks or more) was little
changed at 1.2 million in August and accounted for 20.6 percent of the unemployed.
(See table A-12.)
The labor force participation rate edged up to 63.2 percent in August but has shown
little change, on net, thus far this year. The employment-population ratio, at 60.9
percent, also edged up over the month and is up by 0.6 percentage point over the year.
(See table A-1.)
The number of persons employed part time for economic reasons (sometimes referred to
as involuntary part-time workers) increased by 397,000 to 4.4 million in August; this
increase follows a decline of similar magnitude in July. These individuals, who would
have preferred full-time employment, were working part time because their hours had
been reduced or they were unable to find full-time jobs. (See table A-8.)
In August, 1.6 million persons were marginally attached to the labor force, little
different from a year earlier. (Data are not seasonally adjusted.) These individuals
were not in the labor force, wanted and were available for work, and had looked for
a job sometime in the prior 12 months. They were not counted as unemployed because
they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)
Among the marginally attached, there were 467,000 discouraged workers in August,
about unchanged from a year earlier. (Data are not seasonally adjusted.) Discouraged
workers are persons not currently looking for work because they believe no jobs are
available for them. The remaining 1.1 million persons marginally attached to the
labor force in August had not searched for work for reasons such as school attendance
or family responsibilities. (See table A-16.)
Establishment Survey Data
Total nonfarm payroll employment increased by 130,000 in August. Job growth has averaged
158,000 per month thus far this year, below the average monthly gain of 223,000 in 2018.
In August, employment in federal government rose, largely reflecting the hiring of
temporary workers for the 2020 Census. Private-sector employment was up by 96,000, with
notable job gains in health care and financial activities and a job loss in mining.
(See table B-1.)
In August, employment in federal government increased by 28,000. The gain was mostly
due to the hiring of 25,000 temporary workers to prepare for the 2020 Census.
Health care added 24,000 jobs over the month and 392,000 over the past 12 months. In
August, employment continued to trend up in ambulatory health care services (+12,000)
and in hospitals (+9,000).
In August, financial activities employment rose by 15,000, with nearly half of the gain
occurring in insurance carriers and related activities (+7,000). Financial activities
has added 111,000 jobs over the year.
Employment in professional and business services continued to trend up in August (+37,000).
Within the industry, employment increased by 10,000 both in computer systems design and
related services and in management of companies and enterprises. Monthly job gains in
professional and business services have averaged 34,000 thus far in 2019, below the
average monthly gain of 47,000 in 2018.
Social assistance employment continued on an upward trend in August (+13,000). Within
the industry, individual and family services added 17,000 jobs. Social assistance has
added 100,000 jobs in the last 6 months.
Mining employment declined by 6,000 in August, with nearly all of the loss in support
activities for mining (-5,000).
Retail trade employment changed little in August (-11,000). General merchandise stores
lost 15,000 jobs over the month and 80,000 jobs over the year. Building material and
garden supply stores added 9,000 jobs over the month.
Employment showed little change over the month in construction, manufacturing, transportation
and warehousing, and leisure and hospitality. Job growth in these industries has moderated
thus far in 2019 compared with 2018.
In August, average hourly earnings for all employees on private nonfarm payrolls rose by
11 cents to $28.11, following 9-cent gains in both June and July. Over the past 12 months,
average hourly earnings have increased by 3.2 percent. In August, average hourly earnings
of private-sector production and nonsupervisory employees rose by 11 cents to $23.59.
(See tables B-3 and B-8.)
The average workweek for all employees on private nonfarm payrolls increased by 0.1 hour
to 34.4 hours in August. In manufacturing, the average workweek increased by 0.2 hour to
40.6 hours, and overtime declined by 0.1 hour to 3.2 hours. The average workweek of private-
sector production and nonsupervisory employees increased by 0.1 hour to 33.6 hours.
(See tables B-2 and B-7.)
The change in total nonfarm payroll employment for June was revised down by 15,000 from
+193,000 to +178,000, and the change for July was revised down by 5,000 from +164,000 to
+159,000. With these revisions, employment gains in June and July combined were 20,000
less than previously reported. (Monthly revisions result from additional reports received
from businesses and government agencies since the last published estimates and from the
recalculation of seasonal factors.) After revisions, job gains have averaged 156,000 per
month over the last 3 months.
“The fast and the curious: Fitter adults have fitter brains”
In a large study, German scientists have shown that physical fitness is associated with better brain structure and brain functioning in young adults. This opens the possibility that increasing fitness levels may lead to improved cognitive ability, such as memory and problem solving, as well as improved structural changes in the brain. This work is presented for the first time at the ECNP Congress in Copenhagen, with simultaneous publication in the peer-reviewed journal Scientific Reports.
Scientists have previously shown that “exercise is good for the brain,” but most studies have not controlled for underlying causes which might give distorted results, such as body weight, blood glucose levels, education status, age and other factors, making it difficult to take an overall view of the benefits. In addition, studies have rarely looked at fitness in relations to both brain structure and mental functioning.
The scientists used a publicly available database of 1206 MRI brain scans from the Human Connectome Project, which had been contributed by volunteers who wanted to contribute to scientific research. The volunteers (average age 30 years old) underwent some additional testing. The first test was a “two-minute walking test,” where each person was asked to walk as fast as possible for 2 minutes and the distance was then measured. The volunteers then underwent a series of cognitive tests, to measure such things as memory, sharpness, judgement, and reasoning.
As team leader, Dr Jonathan Repple (University Hospital Muenster, Germany) said “The great strength of this work is the size of the database. Normally when you are dealing with MRI work, a sample of 30 is pretty good, but the existence of this large MRI database allowed us to eliminate possibly misleading factors, and strengthened the analysis considerably.”
The tests were able to show two main points: better performance on a 2-minute walking test in young healthy adults is associated with better cognitive performance, and with structural integrity of the white matter in the brain: healthy white matter is known to improve the speed and quality of nerve connections in the brain.
Repple continued, “It surprised us to see that even in a young population cognitive performance decreases as fitness levels drops. We knew how this might be important in an elderly population which does not necessarily have good health, but to see this happening in 30 year olds is surprising. This leads us to believe that a basic level of fitness seems to be a preventable risk factor for brain health.
This type of study raises an important question. We see that fitter people have better brain health, so we now need to ask whether actually making people fitter will improve their brain health. Finding this out is our next step. There are some trials which point in that direction, but if we can prove this using such a large database, this would be very significant.”
Commenting, Professor Peter Falkai (University Clinic, Munich, Germany) said:
“This is an important cross-sectional study demonstrating a robust correlation between physical health and cognitive functioning in a large cohort of healthy young adults. This correlation was backed by changes in the white matter status of the brain supporting the notion that better macro-connectivity is related to better brain functioning. It stresses the importance of physical activity at all stages of life and as preliminary recent evidence suggests one can start improving physical health even in later life even if one has never trained before (see reference). These findings however need to be replicated in longitudinal studies and translated for the use in mental illness.”
“Why should you care about AI used for hiring?'”
Artificial intelligence has become much more prominent in business processes recently, and was voted the number one trend in SIOP’s Top 10 Workplace Trends for 2019. SIOP is currently celebrating Smarter Workplace Awareness Month to highlight trends like AI in an effort to help organizations grow and thrive in ways that may not be possible without the help of I-O psychology.
As AI continues to gain traction, it will be critical for organizations to include I-O psychologists on their data science teams to leverage expertise in psychological theory and methods in ensuring optimal outcomes for organizations.
“Artificial Intelligence in Talent Assessment and Selection” is the latest in the Society for Industrial and Organizational Psychology (SIOP) white paper series. Written by Neil Morelli, PhD, VP of Product and Assessment Science at Berke, this paper provides an overview of artificial intelligence in the workplace, provides practical to-dos for organizations considering AI tools for their hiring process, and explains how I-O psychologists can help along the way.
Media channels often feature stories on the “future of work,” “the skills gap,” “income inequality,” and “globalization.” What these stories have in common is a focus on the work people will do in the future and how they will be placed in those jobs. In other words, how people are hired and managed are interests among everyday people. AI is a driving force behind the workforce changes occurring and is a tool that can help hire people into jobs.
However, HR is late to the AI game. Anyone interested in the future of work, HR, or hiring should read this whitepaper to get up to speed on this evolving topic. Artificial intelligence is changing the way businesses operate and has the potential to revolutionize the way we select and retain talent. For businesses to take advantage of new technology, they must first understand it. AI is complex topic, but Morelli breaks it down in a relatable manner so that HR practitioners can take action.
In addition to providing an overview and background on the topic, Morelli discusses three next steps for consumers to consider before using an AI hiring tool. He explains the options of getting I-O psychologists involved, pairing AI-based tools with human decision makers, and applying a healthy amount of skepticism to marketing materials provided by vendors.
“The birth of vision, from the retina to the brain”
How is the retina formed? And how do neurons differentiate to become individual components of the visual system? By focusing on the early stages of this complex process, researchers at the University of Geneva (UNIGE), Switzerland, in collaboration with the École Polytechnique Fédérale de Lausanne (EPFL), have identified the genetic programmes governing the birth of different types of retinal cells and their capacity to wire to the correct part of the brain, where they transmit visual information. In addition, the discovery of several genes regulating nerve growth allows for the possibility of a boost to optic nerve regeneration in the event of neurodegenerative disease. These results can be discovered in the journal Development.
The visual system of mammals is composed of different types of neurons, each of which must find its place in the brain to enable it to transform stimuli received by the eye into images. There are photoreceptors, which detect light, optic nerve neurons, which send information to the brain, cortical neurons, which form images, or interneurons, which make connections between other cells. Though not yet differentiated in the early stages of embryonic development, these neurons are all produced by progenitor cells that, are capable of giving rise to different categories of specialized neurons. To better understand the exact course of this mechanism and identify the genes at work during retinal construction, researchers studied the dynamics of gene expression in individual cells. “To monitor gene activity in cells and understand the early specification of retinal neurons, we sequenced more than 6,000 cells during retinal development and conducted large-scale bioinformatic analyses,” explains Quentin Lo Giudice, PhD student in the Department of Basic Neurosciences at the UNIGE Faculty of Medicine and first author of this article.
Mapping a system under construction
In collaboration with Gioele La Manno and Marion Leleu of EPFL, the researchers studied progenitor’s behaviour during the cell cycle as well as during their progressive differentiation. The scientists then mapped very accurately the different cell types of the developing retina and the genetic changes that occur during the early stages of this process. “Beyond their “age” — that is, when they were generated during their embryonic life — the diversity of neurons stems from their position in the retina, which predestines them for a specific target in the brain,” explains Pierre Fabre, senior researcher in the Department of Basic Neurosciences at the UNIGE Faculty of Medicine, who directed this work. “In addition, by predicting the sequential activation of neural genes, we were able to reconstruct several differentiation programs, similar to lineage trees, showing us how the progenitors progress to one cell type or another after their last division.”
The researchers also conducted a second analysis. If the right eye mainly connects essentially to the left side of the brain, and vice versa, a small fraction of neurons in the right eye make connections in the right side of the brain. Indeed, all species with two eyes with overlapping visual fields, such as mammals, must be able to mix information from both eyes in the same part of the brain. This convergence makes it possible to see binocularly and perceive depths or distances. “Knowing this phenomenon, we have genetically and individually “tagged” the cells in order to follow each of them as they progress to their final place in the visual system,” says Quentin Lo Giudice. By comparing the genetic diversity of these two neural populations, researchers discovered 24 genes that could play a key role in three-dimensional vision. “The identification of these gene expression patterns may represent a new molecular code orchestrating retinal wiring to the brain,” adds Dr. Fabre.
Towards regenerative medicine
Even before the neurons reach the brain, they must leave the retina through the optic nerve. The last part of this study identified the molecules that guide neurons on the right path. Moreover, these same molecules also allow the initial growth of axons, the part of neurons that transmits electrical signals to the synapses and thus ensures the passage of information from one neuron to another, as well as about twenty genes that control this process. This discovery is a fundamental step forward for regenerative medicine.
The more we know about the molecules needed to appropriately guide axons, the more likely we are to develop a therapy to treat nerves trauma. “If the optic nerve is cut or damaged, for example by glaucoma, we could imagine reactivating those genes that are usually only active during the embryonic development phase. By stimulating axon growth, we could allow neurons to stay connected and survive,” explains Dr. Fabre, who plans to launch a research project on this theme. Although the regeneration capacities of neurons are very low, they do exist and techniques to encourage their development must be found. Genetic stimulation of the damaged spinal cord after an accident is based on the same idea and is beginning to show its first successes.
“Employee contract structures in startups can be determining factors of success”
Conventional wisdom in the startup community is that with the right incentives, the venture can meet and exceed expectations, and a major component of this is how you structure your contracts for founders and early employees.
New research has found that when it comes to those contracts, it may be less about incentive, and more about identifying the right people to incentivize.
New research in the upcoming INFORMS journal Management Science suggests that identifying personality types is as much if not more important than contract elements.The study, “Equity Contracts and Incentive Design in Startup Teams,” was conducted by Evgeny Kagan of Johns Hopkins University, and Stephen Leider and William Lovejoy both of the University of Michigan, to examine the effects of different contracts based on effort and value in startups.
The most compelling finding of the research is that incentive clauses in contracts tend to work only when applied to individuals who would be high-performing team members regardless. Team members who may not be high-performers do not tend to perform any better when given incentives in an employment contract.
According to Kagan, this means that it could be best to focus on including certain performance-based clauses in contracts for people who seem more likely to respond in kind. At the same time, others who may not appear to be high performers at the outset may not warrant performance-based contracts.
“Equally-split contracts can encourage free-riding behavior. They are embraced by the least desirable collaborator types who protect themselves by not taking risks but still sharing equally in the proceeds,” said Kagan, assistant professor at Johns Hopkins Carey Business School.
One of the suggestions given by the authors, because it is about personality types and not incentives that matters most is that founders may want to delay contracting. By doing so, they can learn about the personalities of the other team members and decide whether a strong incentive, or a simple, equal split contract is appropriate.
The findings of this research encourage investors to avoid startups with equal ownership splits between founders, especially when those contracts have been chosen early in the collaboration.