What a difference a year makes
Just over a year ago Groupon had just gone public and others were waiting in the wings to follow suit. Everyday my articles were plastered with job opportunities. There were literally thousands of jobs available in the daily deal industry, what a difference a year makes.
This morning, the jobs number was revealed and the US supposedly added 146,000 jobs in November, up a tad from 138,000 in October. The highly followed unemployment rate fell to 7.7 percent, largely because 542,000 additional adults chose not to look for work.
In the first six months of Groupon’s debut, the daily deal industry was a net creator of jobs as an entire industry began evolving. Since May of 2012, the industry has contracted dramatically, and daily dealers have added to the unemployment rate. On a percentile basis, the industry ranks in the top five for negative job growth.
Workers are giving up
In my opinion if we are in a recovery, then this one is ridiculously weak. The true employment numbers reveal that most of the reduction in unemployment from its 10.0 percent peak in October 2009 has been accomplished through a significant drop in the percentage of adults working or looking for work. If the government was forced to include the more than 8 million part-time workers who can’t find full-time work, the unemployment rate becomes 14.4 percent. In my opinion that is a much more realistic picture.
Most of the daily deal jobs lost were sales specialists with a pay range in the $35,000 to $50,000 with added bonuses. Some of those that were handed pink slips were lucky enough to make laterally moves, others started their own business, many took lesser paying jobs and many are unemployed and are drawing benefits.
In California for example, unemployment benefits come in around $450 per week. That equates to $23,400 a year. No commuting, no child care expenses, no lunches or lattes on the fly. The majority of the jobs available, especially this time of year are retail and pay barely above minimum wage – $8 to $8.50 an hour (in California). Besides the fact that retail sales and inside sales are worlds apart, the difference in pay does not justify working.
That being said, desperate workers seem to be settling for part-time work, often times two or three jobs in an effort to replace their previous income.
A potential silver lining
There is a potential silver lining for the daily deal industry and the unemployment number. The second and soon to be third generation daily dealers are finding more success that the big dawgs that founded the industry (Groupon and LivingSocial). The hiring has been sporadic and certainly not the massive numbers that we had seen last year and there continues to be consolidation and layoffs in the industry.
For the US, growth remains weak, however, our second term President has the advantage of another four years of baby boomers retiring. That number still remains at 10,000 per day, or 300,000 per month. In theory, that means during his next four years, there could be as many as 14.4 million jobs vacated. President Obama would need at least three quarters of those filled in order to post positive real employment numbers.
That is a tall order that although possible, in my opinion is not probably. Unfortunately a large portion of those baby boomers are unable to retire due to a severe lack of savings. Ironically that group will probably be taking advantage of the buying side of the daily deal equation.