Thursday, May 2, 2013

The jobs aren't coming back

That's the 'elephant in the room' that no-one wants to talk about.  It's time we grasped the nettle and admitted the truth.  The job market, as it used to exist up until the 2007/08 financial crisis, is no longer what it was.  It's has already changed, is still changing, and will go on changing for the foreseeable future.  In the process, a lot of the jobs that used to exist have been destroyed.  Unless and until those looking for work, and those presently in the workforce, change to match the jobs that are available, they're likely to become not only unemployed, but unemployable.

I've been watching the process carefully for the past eight or nine years.  I was driven to it by my personal circumstances.  Having been partially disabled by a crippling workplace injury in 2004, I was no longer able to hold down a normal 9-to-5 job or work in a normal office environment, as I'd done in the past.  I certainly wasn't capable of outdoor or physically demanding work!  I therefore had a choice.  I could vegetate on a (very limited) disability pension, crawling into my hole and pulling the top in after me;  or I could re-qualify myself and find a new way to earn a living.  I chose the latter, and went into full-time writing (something even a disabled person can do, given hard work and skull sweat).  This blog has been a big part of that, learning the writing trade, building an audience (thank you all for sticking around!), and at the same time teaching myself the craft of fiction writing.  (My first novel will be published this month, all being well, and you'll be able to see for yourselves whether or not I've learned anything worthwhile!)

In the process, and having been a director of companies in a former career, I kept a watchful eye on what business and commerce were doing, and how they were developing.  The financial crisis simply accelerated and intensified trends that were already present.  Political influences like Obamacare have added their own impetus to the process.  Consider these datum points:

  • Europe's employment picture is not so much dismal as disastrous.  The Economist reports:  "The euro area now has some 19.2m unemployed workers.  Individual country numbers inspire their own brand of horror. Greek joblessness topped 27% in January (the most recent month for which data there are available), while Spanish employment has risen to 26.7% ... It is the youth figures that are most remarkable, however: 59.1% of those under 25 are unemployed in Greece, 55.9% in Spain, 38.4% in Italy, 38.3% in Portugal, 26.5% in France—3.6m youths in all."  That's a recipe for political, social and economic catastrophe.  No, I'm not exaggerating - see, for example, the rise and impact of the neo-Nazi Golden Dawn movement in Greece, arising out of precisely this issue.
  • The US job market isn't in much better shape.  The New York Times points out:  "While buoyant earnings are rewarded by investors and make American companies more competitive globally, they have not translated into additional jobs at home ... When companies do hire, it is often overseas, where the growth is."  USA Today notes that "The labor force participation rate, or the share of Americans ages 16 and over in the labor force, fell ... to 63.3% [in March 2013], a 34-year low. That's not a healthy sign for the economy."  Forbes describes how, as a result of Obamacare, more US companies are switching full-time positions to part-time status, and restricting the hours of part-time workers to such an extent that they become underemployed.  Finally, the American Enterprise Institute observes that "... we currently have six unemployed or underemployed workers for every job opening, nearly double that at the start of the recession."

In an article encouraging young Americans to consider working overseas, Post Masculine summed up the situation very well.

I hate to be the one that breaks this to you, but the jobs aren’t coming back. Sure, unemployment rates have dropped to below 8%, but as Republicans correctly point out, this is because people are giving up on working altogether and the real number of jobs is falling. The US government keeps reporting job growth every month, but what they fail to mention is that the job growth is slower than the overall population growth.

There is a structural change in the economy. Technological improvements mean our economy can produce more value while employing fewer workers. Economists refer to this as the de-coupling of labor and growth. Technological automation and globalization has created an economy that can grow while employing fewer people. This technology and outsourcing has also developed an economy that disproportionally rewards entrepreneurs, investors and corporations. Hence the whole “We are the 99%” hubbub a year or two ago.

And with the accelerating rate of technological advancement, the problem is only going to get worse, not better. Democrats and Republicans will continue to blame the sluggish economy and shitty job numbers on each other. But know this: that if it’s anybody’s fault, it’s Silicon Valley’s. And the same technology that has enriched our lives and allows me to write this and you to read it, is ultimately the culprit.

S**t’s changing, folks. And it’s probably going to get worse before it gets better. We’re seeing a perfect storm of sorts: the decoupling of economic growth to household income and labor productivity with a simultaneous aging population. I don’t care who is president; things are going to be a mess for a while to come.

(If you’d like to learn more about this, I highly recommend reading this book: Race Against the Machine by Erik Brynjolfsson and Andrew McAfee)

There's more at the link.

It behooves all of us in today's economy, employed, unemployed, pre-employed and retired alike, to consider these facts very carefully.  If any of us are blithely expecting to walk into, or retain, the same sort of job that our parents or older siblings had . . . we're probably doomed to disappointment.  I strongly suggest that for many older Americans, our days in the conventional workforce are numbered.  Mine were cut short by injury, and I've been forced to fall back on my own resources;  but I find more and more middle-aged and older people I know are suddenly finding themselves in the same boat, forced out of their previously 'safe'-seeming lifestyle by economic change.  They're floundering, hoping against hope to find another job just like their old one, with the same sort of salary and benefits package.  I hate to tell them this, but that's just not going to happen any more.

It's up to us to take our future into our own hands, and start planning for some sort of self-employment . . . because corporate employment is unlikely to recover for people like us.  That's likely to suck rocks, because we won't be making as much money, and we'll be working a lot harder.  On the other hand, if we're willing to work hard, we can at least make a living.  I've been told about a large number of people who are working in the so-called 'underground economy'.  They're making a lot less money, but accepting payment in cash or in kind;  and, as far as I know, they're not paying taxes on it, nor are they constrained by the myriad rules, regulations and restrictions that hamstring most small (and large) businesses.  On the whole, they get by.

Working for ourselves has one more benefit.  If we want to bitch about the boss, all we need is a mirror!



TeenaJ said...

Lots of jobs definitely are not coming back. Too bad the stats don't reflect this! This blog gets into the problem!

Anonymous said...

I will certainly buy your book. If for no other reason than that you have given 'us' so much fun and information over the years...

I'll also give a good recommendation if I like the book (and I'll stay mum if not ;-> But I doubt that will be necessary.)


Cap'n Jan

trailbee said...

Not only are overseas jobs an option, but will be hard to find with the EU countries facing recessions and austerity.
But, the shadow economy here is going to be interesting. People will be using cash, not cc, and working off the books. Guess what's going to happen to our expected tax windfall the Admin. is looking for?

Will said...

At least 20-30 years ago, I had heard that the "underground economy" was 3X larger than the regulated (taxed) economy. That was why the .gov was desperate to find ways to track cash transactions, or any exchange of funds. They would love to eliminate cash now, and go entirely to electronic transfers for all.

What the idiots never have realized is that to tax it would eliminate most of it. Well, except for those who just want total control of people, not those who envision massive tax monies to play with.

Anonymous said...

Technology limits jobs? Ridiculous. As tech has advanced, the number of jobs available advanced. Tech like the internet is a prime example. Not only have millions of new jobs been created directly, but it has opened up even more possibilities than ever existed before.
The only problem we and the EU have is that we're dis-incentivizing the startup of new companies.