Attacking unemployment

By Felix Salmon
July 9, 2010

Unemployment is tragically, stubbornly high — and that’s going to prove devastating not only for the millions of long-term unemployed but also for the USA as a whole, if it continues indefinitely. And it’s not just the Americans without jobs who need a way out: it’s the ones in bad, underpaid service-industry jobs as well.

I wrote about that problem on Wednesday and got some fantastic comments in response. And a lot of other people are making similar points these days. Mark Thoma picked up on the same Richard Florida piece that I did and noted that improving productivity is not certain to help: since the early 1980s, productivity has fed through into improved pay only once, briefly, during the dot-com boom.

Chrystia Freeland has been attending similar discussions in Aspen:

What frightened me most about today’s discussion was a possibility endorsed by Ron Brownstein, political director of Atlantic Media, that America’s two-speed economy may not be anyone’s fault (as [Arianna] Huffington insisted it was) but might, instead, be the inevitable consequence of the twin revolutions of globalization and technological change.

[Allstate CEO Tom] Wilson was certainly right about one thing: one of the great success stories of our age is how dynamically American companies have adapted to globalization and the technology revolution. But, as Huffington pointed out, the political consequences of a two-speed America might not be pretty: “America cannot be America without a middle class … we will become Brazil and all live behind gates to protect our children.”

There’s a real risk that American companies will thrive on foreign labor, leaving their home nation to slowly devolve into a land of chronic unemployment and widespread lack of skills.

Andy Grove reckons that the solution is for American companies, at the urging of the government, to become more protectionist, putting up trade barriers to create domestic jobs. Like Reihan Salam, I’m unconvinced. But Reihan isn’t particularly constructive himself, saying only that we need “a wrenching series of labor market and entitlement and tax reforms designed to improve work incentives, most of which will prove far less popular than simply bashing China”, which will somehow both raise taxes and foster lots of new employment at the same time. I’ll believe it when I see it.

Michael Hudson is a bit more inventive: he’d like to see a move away from income taxes and towards property taxes. That would help bring property prices down, making housing more affordable, and leaving more money left over for consumption. But that’s a plan designed to work in Eastern Europe, not in the U.S.

Mohamed El-Erian, meanwhile, has a whole laundry list of things he reckons need to be done with some urgency:

Instead of simply debating the case for further government stimulus, policy makers should also come up with a comprehensive strategy that focuses on improving human capital, particularly through a greater emphasis on education and training; expanding infrastructure and technology investments, in part by creating a more friendly tax system; encouraging a bigger translation of scientific advances into economy-wide productivity gains; and better protecting the most vulnerable segments of society.

This is all well and good, but none of it is likely to bear fruit during the presidency of Barack Obama, even if he gets re-elected. And I think it’s fair to say that if he leaves office with unemployment significantly higher than he inherited it, that will be a major blemish on his administration.

But maybe unemployment is simply a problem to which there is no good medium-term solution, let alone any short-term fix. Certainly the government can’t directly employ the unemployed, and although I’m a big fan of arts subsidies as a way of creating jobs, that kind of thing is only ever going to have a marginal effect.

I do think that my first commenter, Harrington, is right that it’s high time to start giving labor unions more recognition and power. That might seem a bit counterintuitive — unions have never been very good at improving employment numbers, as opposed to improving the plight of the employed. But if workers at places like Wal-Mart start being paid a decent living wage, that is surely a significant improvement on where we are now. And if we raise the minimum wage to a point where employees are less likely to quit and more likely to learn reasonably high-level skills, that will help get us to Richard Florida’s promised land. Without unions and minimum-wage laws, corporations compete on who can pay the least. With them, they compete on who has the best employees and they invest significantly in those employees. Which is exactly what we want, especially since raising the minimum wage is unlikely in and of itself to increase unemployment visibly.

My third commenter, billyjoerob, depressingly reckons that reduced immigration will do the trick. It won’t. But immigration is important: if it’s sensibly structured, it can create more jobs more quickly than just about any other low-cost government intervention. Just allow lots of rich and high-skilled immigrants into the country and they will rapidly create businesses which will employ millions. (One prime example: Andy Grove.)

And Dollared notes another important tack: fixing the national health care system so that employers aren’t burdened with enormous healthcare costs and can concentrate instead on what they do best.

But I like HBC’s comment the best:

The prevailing epidemic of bad jobs (formerly known as careers) American workers are having to get used to can be directly attributed to protracted periods of really awful American management, for which there can be no tolerable excuse.

America invented the concept of management as a profession and course of study and in doing so helped to cement the victory of capital over labor. That works until the workforce becomes so demoralized as to be useless — at which point the jolly capitalists just decide to hire foreign workers instead. This is good for investors in the short term, but it’s very bad for the economy in the long term. And I don’t think that anybody believes that the U.S. stock market can rise steadily if the U.S. economy is in a slow and inexorable decline.

At the same time, however, it’s hard to imagine capital giving up its hard-fought gains and becoming much more paternalistic and generous to its employees, hiring more people and paying them better. Which is one reason why I’m a pessimist when it comes to the long-term employment situation.

40 comments

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Nice post, Felix!

As you say, this is the flip side of making bad jobs better. (If I were snide, I would point out that being unemployed is a REALLY bad job.)

I would like to see greater skilled immigration permitted. In many cases companies face a choice between bringing the employees to the jobs or taking the jobs to the employees. We are better off as a nation if we bring the jobs and the employees HERE.

The other half of my answer is to foster opportunities for entrepreneurs to form and build small businesses. Corporations can take an idea and scale it globally, however small businesses drive innovation and new job growth. Nor are their operations easily offshored, keeping most of the job creation home.

Any ideas on how best to do this? Loans? Tax credits? Support services?

Posted by TFF | Report as abusive

A follow up to the previous comment is to follow a model like we have in Norway where you compress the heck out of wage scales between “bad” jobs and “good”. Unemployment is currently at 3.7% here. Of course, a US$500bn oil fund buffer doesn’t port over as well.

Posted by norge3 | Report as abusive

1. The problem is that we live in a globalized world.
2. In this world management skill, having capital, inventing something is a rare commodity.
3. Doing normal work is not, there are 6.5 billion people who can do that.
4. Means higher income for the first group considerably lower for the second (at least in the West, in China etc they are already paying according to world standard).
5. US should imho increase:
- education levels especially below
- improve business and other infrastructure
- stimulate R&D
- get as much as possible high potential immigrants
All combined may stop this trend or at least slow it down.
6. Rest (like unions, trade barriers) is mostly fighting against market forces, normally not a successful strategy
7. Wages for a Wal-Mart worker may be low and socially difficult to defend. However from a worldwide perspective they are still much too high.
8. Face the facts than you can do something against it, but most people’s remarks are simply what they think is correct or what they would like to see, and have nothing to do with what is actually happening.

Posted by Rikh | Report as abusive

Felix,

Living wage? Please define. I know its political value, but I have no idea what you mean from an economic standpoint.

Is it $30,000 a year? $70,000? $100,000?

For a family of one? Two? Six?

Living in Brooklyn? Bronx? Palm Springs?

Please list all expenses/contingencies the living wage would cover. Food? Rent? Clothing? College savings? A weekly movie? Trip to the doctor? A car?

Posted by nersesian | Report as abusive

Felix, you talk of a struggle between capital and labor being won by capital. Channeling the great Karl Marx there, eh? Could you be any more obvious?

In reality, the economy had plenty of capitalists who tried domestic production and some who tried Chinese production. Guess who survived and who didn’t? Doesn’t that sound more like Darwin than Marx?

Posted by DanHess | Report as abusive

Unions seem to do little more than increase economic rents for insiders at the expense of outsiders. They have been bad just about everywhere we have unions. Yes they would raise wages, but they would also reduce employment in that sector.

I think a better method would be to target economic rents of capitalists. I came across this article on pricing system for medical supplies (http://www.washingtonmonthly.com/featur es/2010/1007.blake.html). I think a lot of supposed capitalists todays are much more politically connected rent seekers we should try to eliminating. Of course this includes TBTF. We should be seeking to remove pricing power by any group whether capital or labor and moving to a freer system. That should lead to a lot of benefits for the lower class. But the history of union seem to have led to failing public schools and a failing auto-industry. And would more likely lead to some unskilled labor being paid better while others see increased unemployment. Wal-Mart may pay poorly but for those that wouldn’t make it into their union they would be unemployed and probably see rising prices at Wal-Mart.

Posted by sditulli | Report as abusive

Felix,

I think you need to look at what constitutes an “American Company.” It dosen’t get much more “American” than Coke… and they generate 75% of sales overseas.

Companies are loyal 1st to shareholers, 2nd to customers, 3rd to employees, and then 4th comes “other stakeholders” like the community and the enviroment.

Great companies satisfy all 4 to a large degree by that list of priorities is exactly the way it is and exactly the way it should be.

Please take look at where the United States stands in Math and Science test scores and ask yourslf where would you open your next fab if you were the CEO of Intel… do I pay entry level workers $30,000 us or do I hire smarter entry level workers for $10,000 us.

It’s not a really hard decision… nor is it a hard decision for a world beating company like AAPL to outsource their supply chain and retain mostly just the high level design and marketing functions in-house.

Best hopes for a recommittment to education and workforce flexibility in the US and Europe.

Posted by y2kurtus | Report as abusive

To be blunt, Americans were told that if they k*ssed, sucked, and slobbered on rich b*tt, we would have pie in the sky. America would be one big country club for the rich, and we could join.

And so we did.

Boy, the joke was on us.

I think the timing here is crucial. How long do the American people take to get over their misplaced faith in ‘bizness knows what’s best for us’? Is there time for American corporations to remove themselves to other lands, before the extent of the betrayal becomes brutally clear? Can Americans even overcome their own gullibility to take action? Is political action – riots, even – in reaction to the onrushing train of poverty possible for Americans in the WalMart generation?

It does twist my stomach up in knots to think of America like Brazil.

Or maybe Mexico. Maybe the future of the jobloss generation is in drug gangs.

Posted by nyet | Report as abusive

In case it wasn’t obvious, I think America should start a trade war.

The global trading system: Break it, then mend it.

The brutal truth is that profits are up, even as the American people spiral down into the toilet.

Who cares about Marx, or Reagan. Just break globalization.

Posted by nyet | Report as abusive

Certainly the government can’t directly employ the unemployed

Um… why not? It worked before.

Posted by NC_Nate | Report as abusive

One issue is that among conservatives an ideology has taken root that we’re a “culture of dependence.” I would argue that the rich are actually the dependent ones because they structure their earnings and asset realizations to minimize taxes while ordinary people just take salary and pay. Putting that aside, we’re witness to a shift in the perception of unemployment – and of unemployment insurance and of programs to assist the unemployed – which is rooted in religious belief. This belief is that people are meant to stand on their own, phrased often using the homily “teach a man to fish” instead of giving him fish. It has become a credo of anti-government thinking that “dependency” takes away what God intends, that it stands in the way of a person’s ability to realize one’s own self. I’m not speaking “new age” but mainstream Evangelical posture.

UI becomes a crutch that perpetuates a state in which a person doesn’t have the incentives necessary to change. That is a direct reflection of the intensity of “born again” theology. The poor, the unemployed, any unfortunate capable of rational thought is considered ripe for a conversion moment.

As political ideology, it becomes distinctly opposed to what is seen as a transfer from the deserving to the undeserving, to those unwilling and unable to make the leap of faith to do what is necessary. Private charity is fine. That is an individual’s choice and is even a community obligation to be undertaken by a specific Church, but government charity is bad because it makes a person a dependent. This dependency is bad. It is even evil, because it denies God’s plan by restricting the potential of men.

So when you talk about what is to be done, remember that you’re not talking about wholly rational, wholly economic arguments but instead about a reality filtered through a highly involved religious belief system. We see this overseas in fanatics and zealots but we don’t want to recognize that versions flourish here as well. Government has become an obstacle to God’s plan. That is their view. It affects much of the GOP because of the zealotry of the believers and their insistence without compromise. We also see that abroad: groups that refuse to compromise, that insist on their way as a holy mission, and yet we refuse to recognize that it is part of our society as well.

So argue for whatever economic plan you want and you’ll still run head first into those who deny, who obstruct, who insist on “no” because they believe that government action is not only bad policy but is against God’s will and is thus tinged with a kind of evil that cannot be countenanced.

This is the world that we live in. Recognize it.

Posted by jomiku | Report as abusive

Jomiku —

If people have a certain belief, so what.

It remains is wrong to steal from one group with the force of a gun (which is what the state essentially has) to give to another. That is true whether you are stealing from the rich to give to the poor or vice versa through the corporate welfare we have seen.

Our founding fathers were very hateful of the tyranny of the state and structured the constitution to protect against it. Our founding fathers were not the zealots you describe, were they?

In any case, Marxist-style redistribution has proven to be the surest way to improverish the masses.

You reveal yourself to be very poorly educated indeed.

Posted by DanHess | Report as abusive

“[Allstate CEO Tom] Wilson was certainly right about one thing: one of the great success stories of our age is how dynamically American companies have adapted to globalization and the technology revolution. But, as Huffington pointed out, the political consequences of a two-speed America might not be pretty: “America cannot be America without a middle class … we will become Brazil and all live behind gates to protect our children.”

“We will become Brazil and all live behind gates to protect our children?”

That says it all. Who is this “we” kemosabi? Most of us will be outside the gates, not Mr. Allstate CEO of course, or the other top 1%-!0% of wealth. The rest of us will be outside, following the garbage trucks from Mr. Allstate CEO looking for uneaten scraps.

Posted by TaxLawyer | Report as abusive

Do you honestly care about epochal impoverishment of the masses, Dan?

“Never attribute to Marx that which is inadequately accounted for by Treasury”

Posted by HBC | Report as abusive

Wrong headline. Based on your last paragraph, you meant to write “Attacking Capital.”

Posted by lambertstrether | Report as abusive

HBC, I’m not wholly convinced that “the masses” enjoy less economic opportunity today than they did 30 years ago. Certainly they have not enjoyed the same gains as those at the top of the economic pyramid, however the statistics commonly cited do not properly account for changes in family structure, taxation, advances in technology and healthcare, and more…

I would love to see studies that compare apples to apples to properly describe the changes. Aggregate statistics may simply be telling us that recent immigrants and single mothers do not enjoy the same prosperity that was the standard in 1970, or that retirees (of which there are more today than ever before) have less income than when they were working.

Posted by TFF | Report as abusive

Folks who imagine that low income people in America are being simply trodden on by their Bourgeois masters don’t understand the reality. Large transfers are already going on, ranging from food stamps to Medicaid, TANF and plain old government checks at tax time.

“the typical low-income household pays $1,684 in total federal taxes, yet receives $17,724 in federal transfer payments alone, not to mention other federal programs such as education and public transportation”

http://www.taxfoundation.org/news/show/2 2465.html

Those who whine that we are in another great depression have no respect or understanding of the actual Great Depression or they would realize such comparisons are silly.

Many lament a society with a weak middle class, but what if we have a society of dependents, a la Venezuela, Saudi Arabia or the UAE? That is a good thing for the job security of the political class, God bless ‘em!

Posted by DanHess | Report as abusive

Just a word on Andy Grove, while he is highly educated, he earned his degrees after coming to the US, so no 401B visa for him. I would say that he’s an example of the sensible immigration you were referring to; someone who comes to the states, uses the instutions available to him, works his ass off, and keeps it here.

Posted by LazyDude | Report as abusive

Both the short and long-term unemployment problem can be solved at once with education funding.

According to a U Mass at Amherst study, each $1B spent in education creates 30k new jobs. At the moment, the states are cutting teacher jobs, increasing unemployment. Not only could federal spending on education reverse those job losses, but it would create new jobs.

Moreover, education spending improves our long-term productivity. According to the CBO, education spending has an expected long-term ROI of 10%. The government can borrow at 3-4% right now. A long-term return of 10%/year while borrowing at 3-4%/year is an obvious win.

If there is concern about the long-term impact of borrowing even at this low rate on our deficits, we could even do this without increasing the deficits by replacing less efficient, less job-creating spending with education spending. In particular, that same U Mass at Amherst study estimates that $1B in military spending only generates 10k jobs. Each $1B we shift from military spending to education spending creates 20k net jobs, all with no change to the deficit.

$200B/year in education spending would create about 6M new jobs. That is enough to cut the unemployment rate nearly in half, from 9.5% to 5.6%. And it would be a long-term investment in the productivity and competitiveness of the United States.

Posted by Greggreg | Report as abusive

Yeah DanHess, look at what HBC says after all Marxism under Mao, under Pol Pot, under Kim Il Sung and son and under Lenin and Stalin did a brilliant job of ending any inequality by killing vast swathes of their people. After all dead people are all equal.

Posted by Danny_Black | Report as abusive

Greggreg, I suspect there are a vast swathe of caveats to that study such as what sort of education is invested in and the socio-economic backgrounds of the people being educated etc. From my personal recollection the major barrier to education was the contempt in which it was held in the section of society I grew up in, something no amount of money fixes.

Posted by Danny_Black | Report as abusive

Danny_Black, you are absolutely correct! You cannot educate somebody who doesn’t care about education.

That said, there are plenty of people who “get religion” in their 20s or 30s when they finally realize that they have no hope of a future without education. I’ve worked with “second chance” students in the past and they are far better than younger students from wealthy backgrounds. They know why they are there and know where they are going.

Posted by TFF | Report as abusive

Gah, i write in real time and it crashed (hears faint cheers)

@lambertstrether he said “it’s hard to imagine”

@DanHess, that figure seems very high. Where is a break down of what is given and to whom and why? It is also well known that those who accept Government assistance are pigs at the trough, until that person becomes the pig.

@Greggreg, higher education may well be at a saturation point, if 40 % are not even finishing, and a majority of those who do cannot find jobs. I agree with education and funneling people into jobs by education, but, can you expound how $200B/year in education spending CREATE about 6M new jobs?

Posted by hsvkitty | Report as abusive

If you would like the details on the estimates of job creation from education spending, the U Mass at Amherst study is here:

http://www.peri.umass.edu/fileadmin/pdf/ published_study/spending_priorities_PERI .pdf

The CBO document that reports a 10% ROI on education spending is here:

http://www.cbo.gov/ftpdocs/91xx/doc9135/ AppendixA.4.1.shtml

Posted by Greggreg | Report as abusive

Sorry, Greg, I searched and did not find out how jobs would be created, other then hiring more teachers.

I agree with the premise, however, that money is much better spent outside of war.

As previously discussed, higher education is a wonderful thing, but if you create academics, they are not going to fill the specialized fields. Where are the jobs created to fill?

And anyone coming out with specialized skills will be happy to search for jobs outside of the country unless he has a job waiting for him when he comes out. Working as a highly skilled waiter doesn’t pay for the loans and the bills.

Posted by hsvkitty | Report as abusive

hsvkitty, hiring a teacher at the lower end of the salary scale costs about $50k to $60k (including benefits — not as expensive as people imagine) as long as you have under-utilized space available to accommodate them. So $1B of additional spending could easily directly translate into 15,000 to 20,000 new teaching jobs.

You could probably arrive at a higher figure by applying a “fiscal stimulus multiplier” of some sort. Teaching jobs are actually a good candidate for that, as it is a labor-intensive industry in which the money stays local. In contrast, much of the cost in construction is for materials — ending up in corporate hands.

“Higher education” suffers from many problems. First, the students entering are often ill-prepared to succeed. Second, the costs and loans mount rapidly. Hard enough funding four years of college! If you have to pay for remedial courses and/or retake ones you have failed, it becomes much more expensive. Third, many college students put ENJOY ahead of EMPLOY. There is nothing wrong with studying the humanities, but there are other fields where you will have a much easier time getting a job.

And yes, we are in a recession. Hard for ANYBODY to get a job right now. Hopefully that will ease in a few years?

I agree that creating academics is the wrong goal. However there are many good jobs that require an associates degree (two years), bachelors (four years), or master’s (five-six years). These degrees are far more cost-efficient than a PhD (ten years).

Posted by TFF | Report as abusive

Unemployment is a byproduct of economic manipulation. It isn’t being *attacked* nor is it *stubborn*. The people who made it happen aren’t genuinely sorry for what they did… yet.

Slogans that could be ripped from an old Viagra carton (attacked, stubborn, etc) aren’t likely to bring us any closer to the solution (pun, etc). Class-based analysis might, whereby a short synopsis follows.

Central government jobs programming – not my idea of a good time, sorry. I’d say it’s going to be a complete waste of time until clear distinctions are drawn between what having a job means and what it doesn’t.

We have to get our terminology straight. Jobs that enslave those obliged to take them aren’t legitimate jobs and should not be paraded by anyone as a positive statistic. Jobs that produce nothing worth buying aren’t the same as jobs that do. Yes, class, there really are good jobs and bad jobs.

Dead-end jobs making dead-end products for deadbeat wages are a class apart from meaningful employment. Meanwhile, nouveau riche meddle [sic] class twits holding down open-ended sinecure positions at financial institutions are mucking up the whole works but still looking to get paid a king’s ransom.

Further up the class ladder, the invisible hands having taken the most from “our” economy have nothing in common with any other human beings. Not only did and do they the least amount of legitimate work in the world, they also have been doing so in contravention of America’s founding principles. Which are quite the opposite of soviet in character.

From a legal standpoint, it can’t go on like this. Even in the West, expropriation is sometimes the answer and, in the eyes of many, this could be one of those times, which should come as no surprise to the ones that have it coming. After all, fair’s fair, they did it first.

In an egalitarian society, taking America at face value, Ben Bernanke’s job could be given to a Wal-mart greeter and nobody would be any the worse off. Actually, that sounds like something America really could pull off and stay true to principle, with a corresponding surge in output quality.

If getting to the root of a problem makes one radical, get your radical on. Rather that than go on meekly rearranging furniture in the doll house. Class… dismissed.

Posted by HBC | Report as abusive

Excuse me, but you didn’t explain why it is that “Certainly the government can’t directly employ the unemployed…”. Why should I take that for granted?

Posted by marxderrida | Report as abusive

Higher wages for unskilled labor? We need lower wages to compete. If you have no skills, you are competing with the world labor market. Unions don’t help. We should be supporting unions in China, not the US.

The long term solution is track driven, individualized education. Don’t pay $200k for liberal arts majors; train scientists, engineers, and technicians.

Posted by mattmc | Report as abusive

@mattmc –

You are on the money. The unemployment rate for certain skills is very low. I would add medical fields to your list. Education in unproductive things is madness!

One thing seems clear: If China pursues a particular economic segment with zeal, get the hell out of the way! If China finds an industry to invest in, they will not stop until they drive the price to nothing and kill profitability for everyone including themselves. All you can do is avoid competing and enjoy cheap whatsits.

China can be a great benefit, but the rule to follow is, do something totally different from what they are doing and aim to serve their needs. Meanwhile, take advantage of all the cheap stuff they send our way.

Posted by DanHess | Report as abusive

It must be said that the demand will remain very strong for industrial inputs indefinitely. These include energy in all forms and commodities of all kinds. This is one of the best ways to reciprocate with the Chinese juggernaut. Workers at all levels in these areas from entrepreneurs and innovators, to engineers on down will do very well.

Posted by DanHess | Report as abusive

HBC I think you are preaching to the choir. Of course there are bad jobs, but there are also bad students, bad teachers, bad salaries, bad bosses, bad days, bad co workers…and I have had all of the above. But working your way up to what you want isn’t so bad a prospect. We could discuss that more broadly once the choices come back and there is meaningful employment to choose from. If less then 2 in 4 college students are getting jobs in their chosen profession, doesn’t it all come back to supply and demand?

When unemployment benefits are gone, a lot of people are going to need food on the table. Maybe people will actually smile and go to work happy knowing they did a good job and made what was available a blessing. That is what will happen if there is another depression and only those who prepare for the worst mentally will survive unscathed. (no I am not talking about doomsday; merely adding mental preparation along with financial)

Just a reminder that these kinds of things happen when you do not have the right skilled people available to take jobs once there is growth.

http://www.nytimes.com/2010/07/02/busine ss/economy/02manufacturing.html

The perfect time to discuss careers like this, for teens who are floundering (not flunking of course) and will not go to college, concentrate on the basic maths needed and guide them literally towards trade schools for jobs they can have. Why is there shame in gainful employment and trades if the grades aren’t up to snuff?

http://tinyurl.com/29mhjja

The no student left behind only works if the student is actually able to keep up. Sadly, these students are the ones being targeted for the Government funded colleges to make a high quota and waste time and money… their own and the taxpayers. The drop out rate is much higher then the norm as students are pressured, given false assurances and ‘helped’ until the required time has been met for loans then abandoned.

When I used the term funneling earlier, it was because I have a bit of a problem grasping the right word. (sadly that is happening a lot lately) Directing via advanced career counseling might have been less robotic sounding.

Bill Gates is doing good things for some schools in need.
http://tinyurl.com/gd96l

Maybe it is time to start more inventors colleges and green colleges, to bring back innovation and make useful, productive and decent paying jobs. The same ole’same ole’ ain’t working so well. I wish I had Mr. Gates money to try to tackle the problem. (it isn’t perfect but they are learning what works and why and of course what doesn’t)

Posted by hsvkitty | Report as abusive

Hey, hsvkitty!

“Just a reminder that these kinds of things happen when you do not have the right skilled people available to take jobs once there is growth.”

Sounds like we are on much the same page after all… This essentially describes my job, working with a segment of the population that others have abandoned. Not much personal financial recompense, naturally, which is why the population is under-served. But I go to work happy, knowing that I’m doing my best to create something worthwhile in the world.

Plenty of opportunity in this for somebody who has skills to pass on and is over 50. Minimal financial reward, but it is better than unemployment.

Posted by TFF | Report as abusive

Well, TFF we are perhaps more attuned then I thought as well, because your last sentence fits well into my dream last night. It sounds like the perfect job for me. I am semi retired and looking for a part time job with value where I can help people. (I already volunteer a lot)

Having made that post before I went to bed, I dreamt about how older people like me could help. I am Canadian, and although we are not in the same crisis (Regulated banks that would never allow a borrower to not be tied to his mortgage for instance)our unemployment rates are also high.

A depression, as it does in other periods of crisis, brings out the bad or the good in people. There are those who choose to loot, cannibalize, rape and shoot others and those who offer a hand, offer food and help others. There really are few in between and those who are can be depressed and suicidal.

If profit and competition are your only drives, then it will be difficult for them to survive. And those who were never helped, born in the throw away society, taught that you do not help others, you help yourself, who might shoot … themselves or others? Right now the jobless are becoming depressed mentally and if the numbers grow, they will rebel.

Wouldn’t it be a good thing to ‘attack’ unemployment as though it could lead to that? To realize that man’s inhumanity to man is what got us here? To avoid the psychological damage now, rather then after the fact? (AA was born from the depression)

My parents and Grandparents lived through the great depression. My great grandfather was upper middle class in England, considered very wealthy and my grandfather lost it all. If you can, talk to someone who survived it. If it happens again, we are not equipped with the same survival skills, love of the land and abilities to work with our hands. We have instincts, but that will not be pretty.

I agree with HBC, in that we are already the throw away society and making more mediocre jobs that people don’t like to make things people don’t need… is not an answer.

Necessity is the mother of invention, but there is a mentality in Wall Street and Government that that is the something to rely on or bet on. If government isn’t going to help and Wall Street doesn’t stop hurting, people will take matters into their own hands and revolt, rebel, and do what they have to to get by.

The changing weather patterns are affecting our food sources. The major wheat growers in Canada and Russia had either too wet (Canada) or too dry (Russia) spring and weather is becoming more extreme and erratic for many other crops as well. (there are consequences for not caring about the environment)

So rather then just subsidize the farmer, we need to plant seed that is resistant to rot and some resistant to drought until we get more researchers into the field to hybrid one that does both. More jobs with value for the future. Keeping our food supply viable into the future is far more important then money managers.

I do have to say, I find it odd that anyone who mentions helping others, giving a hand up or being altruistic is no longer simply compassionate or being a good person … or when we discuss those who are extreme capitalists with no thought given to others, we are labeled Marxist. There are moderate views that don’t necessarily need to be pigeon holed as extreme.

I know no one is left to read this but perhaps a brilliant innovator will get some juices flowing after reading all this. You may label me optimistic.

Posted by hsvkitty | Report as abusive

My grandparents were also forming and raising families during the Great Depression, naturally. On both sides they remained employed (technical skills), but learned lessons of thrift that lasted through their lifetime. Many people remember these lessons from their parents and grandparents — they have just forgotten the reason for practicing them.

Trying to solve the big problems can make you crazy, but if you focus on your immediate surroundings you can make a difference and find a place in the “new normal”.

Posted by TFF | Report as abusive

Maybe this sounds a bit harsh, but it’s numerically correct: it now turns out that all the things working people were told about their jobs since at least thirty years ago have been untrue. Every single bloody thing… well, except maybe not to be rude to minorities and women on the factory floor or at the office, unless you work on Wall Street, in Washington DC or in a Tea Party bunker in Arizona.

America’s working and middle classes have been, across the board, impoverished by the very system they were led to believe would be their material salvation. Don’t make me write the list of failures because it’s a long one. For sure, though, workers can’t be expected to go on letting their whole lives be defined by the “jobs” lottery internationally mismanaged in high places. Hand-wringing by policy makers only adds insult to injury.

American jobs already sweat-shopped and maquiladora’d overseas aren’t coming back until slavery is decriminalized in the USA. In other words, there’s no premium in trying to out-China China, Dan Hess. Not as long as China’s little better than a gargantuan labor camp running to corporate US specification. We’re not talking “cheaper labor” here, or rather in Asia and Central America – we’re talking about slave labor, which is illegal in the United States.

Some day maybe people will realize it’s not nice to buy slave-made goods, which are identifiable manifestations of economic pornography. Really, they are. Buying slave-made goods makes you complicit in slavery. So stick that in your Wal-mart and smoke it. Just because their slaves are little beige people in a faraway land doesn’t make it OK, ever, for would-be civilized people to exploit them.

Paradoxically, US corporations now cutting benefits to domestic workers have no problem with socialized medicine in Mexico, where the maquiladoras are and from which they profit. If socialized medicine spells disaster in the USA, why is it A-OK when it adds to the corporate bottom line in outsource-land, and on what terms do you imagine those jobs ever coming back? Not good ones, as you may be assured.

The only way I believe things will improve is by changing the definition of “jobs” to reflect things that people may be reasonably good at, and reasonably expected to do in return for humanly realistic wages.

Calling mass unemployment in the US stubborn in the meantime is like saying famine victims are picky eaters. The US economy needs to get out of the man-made famine business altogether and (back?) into the business of making good things happen. If it’s not doing that, it’s not doing its job and should be fired.

Posted by HBC | Report as abusive

http://www.boston.com/business/articles/ 2010/07/14/training_needed_for_mid_level _jobs_study_says/

There are jobs out there, they just require skills. Not necessarily a four year college degree. Just skills.

Posted by TFF | Report as abusive

HBC, as a matter of curiosity, what computer you using to write these posts. I ask as you are so utterly opposed to utilising the end-products of slave labour.

Posted by Danny_Black | Report as abusive

Felix,

It is not a right of American workers to be paid more than a fair global wage. If foreign workers will accept less than American workers, and will do an equal or better job, I fail to see why we should be bemoaning that. This isn’t “bad” for the economy. It is bad for those individuals who aren’t motivated or talented enough to deserve an American’s typically high level of pay.

Attacking unemployment is depressingly simple. Eliminate minimum wage laws and unemployment benefits, and the price for labor will fall to its proper/free-market/equilibrium price. Supply and demand will be equal. Anyone who wants a job will have one. The end.

Posted by rballentine | Report as abusive

“It is not a right of American workers to be paid more than a fair global wage.”

It is not a right of any exporter to have access to the American market.

Welcome to the world of political uncertainty, as the consensus commitment to destruction of the American middle class impacts globalized business. You helped make this world, you should be comfortable in it.

We need tariffs. With high enough tariffs, the jobs will come back.

The global trading system: Break it, then mend it.

The brutal truth is that profits are up, even as the American people spiral down into the toilet.

Who cares about Marx, or Reagan. Just break globalization.

Posted by nyet | Report as abusive