Sunday, August 22, 2010

Our Jobs Crisis

It’s easy to get really depressed over the massive amount of unemployment that is everywhere — especially for those of us without a job. But when it looks like all is lost and hopeless, there is NYT columnist Bob Herbert to remind us that perhaps we may be looking at things a bit too optimistically!

In his August 9th op-ed column
The Horror Show, he leads off with this.

The employment situation in the United States is much worse than even the dismal numbers from last week’s jobless report would indicate. The nation is facing a full-blown employment crisis and policy makers are not responding with anything like the sense of urgency that is needed.

We’ve got more and more people in our working-age population and fewer and fewer jobs to go around…there are now 3.4 million fewer private-sector jobs in the U.S. than there were a decade ago. In the last 10 years, we’ve seen the worst job creation record since 1928 to 1938.
We need to take into account that there are roughly 150,000 new workers entering the US job market each month due to normal population growth. So if about 130,000 jobs were lost in July
according to the government report, this means that about another 280,000 were added to the unemployed. Those who gave up looking for work or forced to take part time work aren’t counted as unemployed or the figures would be even worse! This means that the longer a period of severe unemployment goes on, the deeper we get into a hole.

According to the NYT article
Jobless and Staying That Way, the light at the end of the tunnel is a dim one indeed.

[T]he Obama administration predicts that unemployment will drop to 8.7 percent by the end of next year, and eventually sink to 6.8 percent by the end of 2013.

To reach that level, the economy would have to add nearly 300,000 workers a month over the next three years, according to Peter Morici, a business professor at the University of Maryland. Even in the first half of the year, when the economy grew at a healthy 3 percent, it added fewer than 100,000 jobs a month.
This has led many to question whether what we are experiencing is just a temporary bump in the road or a long patch of bad road ahead with no end in sight. It has been said that this is the worst economy we have had since the Great Depression. And while the numbers during that time were worse, there are a number of reasons why what we are going through is different (and arguably worse) than in previous downturns.

Previous recessions have always been treated as cyclical events. Sure things were slow and people lost jobs, but once the economy picked up, the jobs came back. But what we have experienced in the US especially in the last decade has been the permanent loss of many jobs. So while we are technically no longer in a recession, those who are unemployed are feeling no relief because we have not been able to deal with the fact that many of these jobs will never come back. Global competition has been taking its toll on the manufacturing sector for some time now. But we at least had the comfort in believing that only the low-tech jobs would be sent overseas and that we could rely on a growing white collar economy to offset that. But the growth of the Internet in the last decade along with its ability to effortlessly transfer information from around the globe has totally changed all of that.

What were once jobs we thought were safe such as in engineering and science can now be readily outsourced to India and elsewhere to save on labor costs. There seems to be no safe harbor from all of this. Even
legal work is now being outsourced to India. And occupations that can’t be readily outsourced such as teaching are falling on their own hard times due to government budgetary struggles. Surely, the health insurance industry which has been prospering during all of these hard times doesn’t have to resort to outsourcing. But they do.

So how to we place all of these people in new jobs to replace the ones that have been permanently lost? Retraining is a logical place to start and has been suggested by many. But retrain for what? I remember being told several years ago when I first lost my job that Information Technology (IT) was the job of the future and all I would have to do to save my career is go to school to retrain. But as many have found out, IT is the job of the future — but not in this country. If there is indeed a chronic deficit of jobs for jobseekers, we can’t solve this by retraining people for jobs that simply don’t exist in adequate numbers!

This also creates difficult decisions for those who are considering attending college. At one time, a college degree usually provided a reliable ticket to prosperity. But many of the college educated such as Alexandra Jarrin whose heart-wrenching story is told in
99 Weeks Later have been living a nightmare.

Ms. Jarrin had scrabbled for her foothold in the middle class. She graduated from college late in life, in 2003, attending classes while working full time. She used to believe that education would be her ticket to prosperity, but is now bitter about what it has gotten her.

“I owe $92,000 for an education which is basically worthless,” she said.

What makes her situation even worse is that student loans cannot usually be discharged through bankruptcy.

The first step in trying to solve a problem as large as this is for our leaders to truly acknowledge how really serious this problem is. It is inflicting permanent harm on many workers and their families who are in dire straits. Something urgently needs to be done — soon. If the private sector cannot or will not provide adequate jobs, the government must step in to create them. This is what was done during the Great Depression. We have a great deal of urgent work that needs to be done such as rebuilding our crumbling infrastructure and converting us to using more renewable energy and fewer fossil fuels. Anti-government naysayers will complain that it wasn’t the government created jobs that ended the Great Depression but was instead World War II. But the effect of World War II was indeed, a massive creation of government jobs.

But government created jobs can only be used as a bridge to when the private sector can finally create enough jobs on its own. It is generally agreed that most of the new job creation
is generated by small businesses. If so, we have to concentrate on helping that part of the economy instead of just the big players which is what we do now. Money has to be freed up for loans that will help existing small businesses flourish along with helping those who wish to start their own businesses. Unlike the large behemoths, small businesses tend to do their manufacturing locally and in addition, tend to value more experienced workers — a boon to the older displaced workers who have especially suffered through all of this.

Not surprisingly, we are on the wrong path. A
jobs bill intended to help small businesses was recently filibustered by the Republicans. Apparently the true Republican priority is to help big business — the same ones who in many cases are hoarding cash and refusing to hire anybody!

Bob Herbert certainly has it right to label this a crisis. But unfortunately, too many in Washington from both parties are content to make
excuses rather than making the tough choices needed to tackle this crisis head-on. We need and deserve better from them!

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