Unemployment Creates Uneasy Winter

COURT HOUSE – Every year, as frigid winds of winter drop the mercury, Cape May County experiences an accompanying drop in employment resulting primarily from the sloughing off of seasonal workers. While not unique to this phenomenon, the fact that the tourism and hospitality industries have such an above average weighted influence locally makes unemployment more costly to taxpayers.
How weighted? According to the state Department of Labor, the two clusters produced over $45 billion in 2014. 
Confluence of a thriving seafood industry and a rapidly growing interest in tourism with accompanying hospitality businesses, chartered the county’s course that would increasingly tie employment health of the population to the fickle existence of seasonal employment.
The number of unemployed Americans reported monthly is the published U-3 number. This measures the number of unemployed “as a percentage of the civilian workforce.”
Currently it stands at 4.9 percent. The group of unemployed classified as U-3 includes those unemployed for the past 15 weeks, those who lost a job in the last 30 days, and the number from the previous month.
In essence, that number is evaluating month-to-month growth. Compare this to the U-6 number, that takes the U-3 and adds to it “discouraged workers, marginally attached, part-timers” (e.g. seasonal), and those leaving the workforce.
This number considers the whole pie, growth and inclusive unemployment. Considering U-6, true unemployment is around 12 percent.
Rate 5.1% in January
New Jersey currently closely mirrors the national U-3 number, with an unemployment rate, as reported by the state Department of Labor, at 5.1 percent as of January 2016.
Viewing a map of New Jersey, starting in the north, one would have the state’s lowest unemployment rate. Going south, the rate grows and reaches its height in southern New Jersey. 
Reasons for Unemployment
While the state reported a U-3 number of 5.1 percent in January 2016, Cape May County had a seasonally-adjusted U-3 number of 12.3 percent.  The reasons for this are many.
Seasonal employment plays a major part in producing these numbers. The environment seasonal workers find themselves in does nothing to alleviate the effect on the county. 
County Is Graying
Demographically, Cape May County is a rapidly ‘graying’ location. Citizens who are 65 years or older constitute 14.1 percent of the state’s population, while locally the number is 22.6 percent and growing for two reasons: more county residents are retiring and increasing numbers of young people are leaving. 
In a study conducted by Stockton University, projected job growth was a paltry 3.3 percent. This helps explain the abysmal labor force numbers in county, which are 176 people per square mile out of a population average of 1,195 people per square mile.
According to the Department of Labor, the fastest growing industries in the county were leisure and hospitality, largely tied to the gaming industry in Atlantic City. One of the leading industries not correlated with another county, is the seafood industry.
Seafood Industry
Generally, the fishing season runs from March to December. There are other breeds caught during other times, but the March to December stretch is when most fishing takes place.
There are challenges facing this industry. The growth of seasonal tourism increases competition between commercial and recreational fisherman. The pursuit of sources of alternative energy has also resulted in fears that proposed offshore wind farms may interfere with commercial fishing by limiting growth in number and size of fisheries.
The preference amongst seafood distributors for a weak dollar in order to make exporting more attractive faces yearly challenges in a global marketplace that continues to stress the need for a strong U.S. currency.
Long the bane of commercial fishermen, the dictating power of seafood processors in determining the price paid for catches can have a chilling effect on growth and profitability of fishing.
Add to that the unpredictability of weather, burgeoning growth of governmental regulations, and pollution and one can begin to see the struggle to survive. These are not the only obstacles seasonal workers must overcome.
Those left to face these vagaries are more likely to experience unemployment sometime during their productive years. That, in itself, may be tolerable as long as a temporary safety net exists to cushion the brief time of unemployment.
Fund Was Insolvent in ‘09
In 2009, the benefit of unemployment insurance for seasonal workers became an issue when state political leaders disclosed that, because of the recession, the Unemployment Insurance Fund, supported by state unemployment insurance tax on paychecks, was insolvent.
Borrowing $1.6 billion from a federal emergency fund, the state quickly convened a task force formed to streamline unemployment insurance while squeezing out savings it hoped would be used to repay the loan.
Stark Realities
The realities facing seasonal employees here are stark. Cape May County residents in their productive years constitute a shrinking pool of laborers in large part beholden to seasonal or part time work; work that faces more and more challenges in terms of profitability, security, replenishment, and social support during down times.
Additionally, there has been much research linking repeated bouts of seasonal unemployment with a stunting of an individual’s long-term economic health as well as a lack of sufficient retirement funds.
This forecast portends potential problems locally that already has a high percentage of citizens 65 years or older and an accompanying labor force that is financially insufficient to support those who are retired.
The non-seasonal unemployed face a bevy of negative psychological forces that can demoralize the individual, ruin the family, and weaken the community.
While the seasonal unemployed generally do not encounter such dilemmas, the uncertainty of being re-employed can bring stress and a sense of helplessness. For those people, there really are winters of discontent.
To contact Christopher Knoll, email cknoll@cmcherald.com.