In my recent post on unemployment claims, I
noted that 160,000 new jobs were added last week but that nearly 50,000
were part-time census takers. Nothing to write home about. In an
article from this morning’s Wall Street Journal, Robert Reich,
the well-known labor expert from Clinton’s administration, said that it
takes more than 150,000 new jobs just to keep up the growth of the U.S.
population.
Unemployment claims have been hovering around 440,000 per week for
the last few months, not a hemorrhage, but still not at the 380,000 to
400,000 that would be a sign that the economy is creating enough jobs to
maintain stable unemployment. We’ll have to get down to 350,000 to
actually have a genuine recovery and more like 300,000 claims per week
to have boom times back.
Reich argues that it may take five to eight years to catch up,
predicating his ideas on a number of issues:
- The number of underemployed or unemployed is in the neighborhood of
11,000,000. - Consumers have been shedding debts, often by defaulting on
loans. Debt still averages nearly $45,000 per American, or about 122%
of disposable income. Reich suggests that most analysts believe a
“sustainable” debt load is around 100% of disposable income. - The richest 10% of Americans accounted for half of total
national income in 2007, but they only accounted for 40% of total
spending. - It’s likely that many job losses will never return.
Cost-cutting moves by American companies, built on software, robotics
and foreign labor support that structural change.
So what does all this mean? The only way the jobless will retain
their jobs is by settling for much lower wages and benefits. The
example Reich gives is of Ford Motor which added 1,200 jobs in Chicago,
but those workers were hired at one-half the salary and benefits of what
current workers were paid when they began their jobs.
There’s another issue beyond settling for lower wages and benefits.
It’s obvious, based on the unemployment statistics:
- unemployed workers with college degrees–5%
- unemployed workers with only a high school diploma–10.5%
- unemployed workers lacking a high school diploma–15.6%
What security you’re able to gain will be enhanced by a college
degree. Although a degree is not a guarantee, it is the union card for
the 21st century. And if you already have a degree, I’d start thinking
about how to gain a graduate degree. The graduate degree has paid
phenomenal dividends for myself and all three of our daughters. All
three have created a niche for themselves, have developed large networks
and stay on top of their relevant industries to see what’s coming and
make changes for themselves.
The cost of education will require sacrifices for many. But them’s
the facts!
Think also, about this. I’ve seen families go way overboard in
sports for their kids, missing and avoiding the opportunities for
academics. Instead of getting caught in that dead-end treadmill, teach
your kids to use sports for maintaining fitness, and nothing else.
Thinking you’re going to have a wealthy sports jock, a beauty queen for
the movies, or a wealthy musician is a rejection of the statistics.
Those fields are so competitive as to be a dead-end. Following your
passion and ignoring reality is just as sicko!
Here’s what I recommend to middle-class dads (and moms, too). Learn
to talk to your kid about something other than sports. There’ll be more
than enough sports idiocy in grade school and high school. Limit the
tube and the computer. Take him/her to museums, check out books from
the library with them, and learn to enjoy science displays and
exhibits. Emphasize subjects in this order: math, science, the
humanities, and then the behavioral sciences, and help them learn how to
ask questions, communicate and WRITE. I’d bet that fewer than 30% of
business people can write a sensible paragraph without typos and
misspelling. That shouts out loud for the better recruiters. Finally,
teach your kids how to do things that neither they (nor you) like to do.
And if you’re really fortunate, your kid will say what my 14 year-old
grandson said about the book, Lies my teacher taught me: “It’s filled with cool facts!”
