Where in the World Are Job Seekers Most Optimistic? The Answer May Surprise You

The worldwide employment landscape has changed drastically over the past five years.

Within the United States, the unemployment rate has fallen by 38% from a peak of 10% in October 2009 to its latest reading of 6.2%, according to the Bureau of Labor Statistics in July. This drop in unemployment has been one of the key forces credited with getting the U.S. economy back on track, and it has allowed the Dow Jones Industrial Average and S&P 500 to reach one new all-time high after another.

Source: Missy Schmidt via Flickr.

All is not what it seems
But as we discussed last weekend, the headline unemployment number doesn't tell the whole story. For those still unemployed, the average length of time it takes to find work is shrinking, but it's still incredibly high at 32.4 weeks. As the unemployment rate shrinks and the pool of qualified workers grows shallow, it may become difficult for these remaining unemployed people to find a job -- or at least one on par with their experience.

Source: Kathryn Decker via Flickr.

The U.S. jobs market has also seen a surge in part-time workers. Similar to the duration of unemployment, the number of workers who are considered part-time because of reasons beyond their control -- i.e., because they couldn't find full-time work or because business conditions call for part-time employment only -- has been falling, but it's still markedly higher than it was before the recession. The implication here is that part-time work may make it difficult for consumers to make ends meet and pay their bills, which is important, considering that consumer spending accounts for the majority of U.S. GDP.

Looking at the big picture, the U.S. jobs market might not seem so rosy after all -- at least based on data from the BLS and my previous opinion. Yet when it comes to the global outlook on jobs, the Americas are the most optimistic region in the world, according to Gallup.

The most optimistic job seekers in the world are found here
Gallup's poll, which was conducted last year and surveyed about 1,000 respondents in 138 countries, asked respondents whether they believed it was a good time or a bad time to find a job. Gallup discovered that the Americas were by far the most optimistic region in the world, with 41% of respondents saying it was a good time to land a job. Meanwhile, just 34% of worldwide respondents thought it was a good time to find a job, while 55% believed it was a bad time.

Here's a more thorough breakdown of Gallup's global findings by region:

Source: Gallup.

Gallup's data further broke down the Americas into 23 separate countries, among which Panama ranked No. 1, with 60% of respondents proclaiming it a good time to find a job. But on a year-over-year basis -- Gallup conducted this survey in 2012 as well -- no country in North, Central, or South America demonstrated a bigger increase in job-seeking optimism than the U.S., where 37% of respondents suggested it was a good time to find a job -- that's 9 percentage points higher than the U.S. response in 2012.

That optimism shows, with U.S. stock markets continuing to rise and the top-line unemployment figure steadily declining. Yet investors and readers should also take this U.S. "victory" with a grain of salt, because labor practices in foreign countries can be drastically different from those in the U.S. Therefore it's not always possible to make an apples-to-apples comparison between unemployment rates in the U.S. and other countries.

In Spain, for example, the wage structure is very rigid and doesn't allow salaries to correct up or down to meet demand. In addition, the majority of new job creation is part-time in nature, as part-time workers are easier for companies to lay off. So Spain's job market simply isn't comparable to that of the U.S., nor are the job markets of many other countries that Gallup included in its survey.

Putting things in perspective
Perhaps the most important takeaway from this survey is that the global jobs market may not be as strong as various stock markets around the world might imply.

In Europe, for instance, despite a recent correction, the DAX in Germany and CAC 40 in France are up notably since their last major swoon in 2011. (The DAX has gained about 80%, while the CAC 40 is up around 50%.)

However, the unemployment rate in the European Union is dreadful.

Graph by author. Data source: TradingEconomics.

After hitting a low of 7.2% in early 2008, the unemployment rate in the eurozone moved progressively higher, touching 12% last year. Despite minor improvements, the EU unemployment rate is still sitting at 11.5%, up substantially from the 7%-8% range before the global recession. It's no wonder that more than three-quarters of respondents view the job-seeking environment in the EU as "bad."

But it's not just Europe; it's practically the entire world. While the EU may have some of the highest unemployment rates in the world -- thanks in large part to the monstrously high unemployment rates in Greece (27.2%), Portugal (13.9%), and Spain (24.5%) -- global sentiment on finding a job is poor in every region of the world. In other words, there could be a genuine disconnect between stock market performance and the health of the global labor force that will come to a head sooner rather than later.

The reason I suggest this is that a growing labor force is one of telltale signs of a healthy economy. If job-seekers feel discouraged about the jobs market in their city, then they could be less likely to seek work. If that happens on a wide scale, it could slow global labor force expansion and adversely affect global growth prospects.

Tthis survey is now a year old, and an update could shed light on whether this global outlook has improved. But the reality is that the majority of people worldwide aren't satisfied with the current state of the jobs market and that a dissatisfied and discouraged labor force makes it difficult for individual economies to keep chugging along.