Opinion

The Great Debate

‘If I can’t do that, then I’m worthless’

Editor’s note: This week, Reuters Opinion is going to be publishing five excerpts – one each day – from D.W. Gibson’s new book, Not Working, an oral history of the recession. Gibson spent months traveling across America talking to people who had been laid off.

Today’s entry is Heather Dupree’s. Heather is a 38-year-old who lives in Marietta, Georgia. She grew up in Miami and went to Florida International University. Her dad worked for Pan Am, and her parents relocated to Atlanta when the company was acquired by Delta. After college, Heather followed her parents to Georgia. She shares a home in a wooded neighborhood with her partner, Leslie, and Leslie’s sixth-grade daughter, Gabby, from a previous relationship.

This is Heather’s story.

I actually went to school for a couple different things; I couldn’t figure out what I wanted to do. Originally, I wanted to teach, so I have a minor in education. And then I decided late that I wanted to get into computers. So I got my bachelor’s in communications with a bunch of computer classes underneath it, and I started doing websites when I was in college.

I got on with a healthcare company. They brought me on as a contractor to rebuild their website. I was with C. for seven years, and in March of 2010 they laid me off. My boss walked back into my office with me and shut the door, and he just started crying. And then I just lost it. I tried to be strong, but I can’t actually sit there and watch a man cry without crying. So I was pretty upset. And then I just called Leslie and said, “You’ve gotta come pick me up.”

And she’s like, “What’s going on?”

I’m like, “You really just need to come pick me up.”

She got there, and she thought that they had let my boss go, and that’s why I was upset. And I was like, “Nope. That’s not really it…” So that’s kind of how that went down. And I really didn’t even have a chance to, you know, say goodbye to anybody really at that time. They were kind of just, like, “Hey, get your stuff and pack it up.”

from MacroScope:

The Law of Diminishing Greeks

The Law of Diminishing Returns  states that a continuing push towards a given goal tends to  decline in effectiveness after a certain amount of effort has been expended. If this weren't the case, Usain Bolt would be able to run the mile in  less than 2-1/2 minutes.

From an economic standpoint, this law now seems to be fully in force in Greece. The latest jobs figures from the twice-bailed out euro zone country paint a bleak numerical picture of the impact of unrelenting austerity in ordinary Greeks, regardless of whether it was self-inflicted or not. To wit:

More than one in five Greeks is unemployed.

There are more young people without a job than with one.

The record 1.08 million people  without work in January was a  47 percent tumble  in a year.

Looking back on my 2011 projections

By Don Tapscott
The opinions expressed are his own.


One thing pundits rarely do is review their own prognostications.  A year ago I published “10 big themes for 2011” – related to how the digital revolution changes business and society.  It’s helpful to review what actually occurred.  Below are my projections and some 20-20 hindsight editorializing.

1. “The crisis deepens. Rather than just an economic downturn, more people will recognize that we’re entering an era of profound change. The industrial economy and many of its institutions are reaching the end of their lifecycles — from newspapers and old models of financial services to our energy grid, transportation systems and institutions for global cooperation and problem solving.”

What happened? I think I called that one. A year ago many were saying that we had come out of the global slump and that we were in full recovery, even if it was a “jobless” one. I detest the term “jobless recovery” as an oxymoron. There is no recovery unless it’s inclusive. As the for global crisis, anyone want to debate with me that it’s getting deeper and that we need to rebuild most institutions and industries, like, say, government?

The deludedly optimistic youth of America

By Chadwick Matlin
The opinions expressed are his own.

Friday was a slightly-better bad day to be a young person in America. The morning’s unemployment said 14 percent of Americans 20-24 years old are now unemployed, down 0.7 points from September. Teenagers’ rate was similarly down, dropping 0.5 points to 24.1 overall.

But still—14 and 24.1 percent! Well above the national average of 9 percent, which isn’t exactly something the Millennials can look forward to.

And yet young people remain stubbornly optimistic. In a comprehensive new survey of 842 young people that Demos, a New York think tank, released this week, almost 69 percent of Americans 18-34 years old “believe the American dream is still achievable.” In other news, the average student debt for new graduates is now $25,250, larger than ever. (To be fair, this isn’t entirely recession-related. My debt was around $100,000 when I graduated, and that was a year and a half before Lehman went belly-up.)

The case for Obama’s jobs program

By Betsey Stevenson
The opinions expressed are her own.

What should we make of the President’s new jobs plan? Ignore the politics — will it pass? — and focus on the economics: If it does, will it get Americans back to work?

The centerpiece is a series of sharp payroll tax cuts. The usual problem with payroll taxes is that they largely subsidize existing workers. But this plan — three separate payroll tax cuts — is different.

The first tax cut is the most innovative: No payroll taxes at all for firms increasing their wage bill. In economics, all the action is at the margin. If we want people to do more at the margin — hire more people — then the incentives to do so should be targeted at the margin. We will get much more bang-for-our-buck by giving the biggest tax breaks to the hiring of extra workers.

The middle-class meltdown

This is a response to Don Peck’s book excerpt, “How chronic joblessness affects us all.” Labor economist Gary Burtless also responded here.

By John Lloyd
The opinions expressed are his own.

“All that is solid melts into air,” wrote Karl Marx in the Communist Manifesto. He meant that the sheer, revolutionary power of capitalism had wrenched larger and larger parts of the world out of its feudal or tribal doze, and sent it running round the track of modernization, smashing down habits, customs, faiths as it went. The agents of this wrenching change: the middle classes, or as he would have it, the bourgeoisie, the new class which grew in the womb of feudalism, and then destroyed it. And they would, he prophesied, be destroyed in their turn.

Do you not fear, in anxious moments at dawn, that he was right, just a bit (163 years: the Manifesto came out in 1848) before his time? Do you feel the solid world melting? Do you tremble that we in the rich states are living, not just on borrowed money, but also on borrowed time – and that it is running out? That our way of life is being gnawed at from below?

Why the unemployed stay unemployed

This is a response to Don Peck’s book excerpt “How chronic joblessness affects us all.”

By Gary Burtless
The opinions expressed are his own.

First, from a labor economics perspective Peck’s analysis is basically correct.  In modern capitalist labor markets, long-term unemployment tends to feed on itself via the mechanism that Peck describes.  It gets increasingly difficult for the unemployed to get re-employed the longer their unemployment lasts.  (There are some hard statistics showing this is true, and that it is true regardless of the state of the economy.)  The impact of this phenomenon on the overall unemployment rate became clear in 1980s Western Europe. Countries like France, Germany, Denmark, and Italy that had enjoyed unemployment rates below those in the U.S. for much of the previous three decades found themselves with jobless rates higher than those in the U.S.  More worryingly, their unemployment rates stayed above the U.S. rate for a very long time.

It became clear than much of the difference was the gap between the two continents in long-term unemployment (that is, joblessness that lasts longer than 6 months or a year).   Europeans who remained in unemployment longer than 6 or 12 months tended to stay unemployed, sometimes up until the age they qualified for an old-age pension.  Even when the European job market improved, these unfortunates stayed unemployed.  Employers hired from the ranks of already-employed workers (i.e., those who were on other employers’ payrolls) or from new graduates.  They tended to shun the long-term unemployed.

How would Keynes advise Obama on jobs?

By Nicholas Wapshott
The opinions expressed are his own.

It’s still the economy, stupid. So if Obama wants to keep his job – and we must assume he does, though he doesn’t seem to be enjoying himself much — he must boost the economy and get the jobless back to work. No president since 1948 has been elected with a jobless figure higher than 7.2 per cent, so with unemployment currently running at 9.1 per cent, he looks headed for certain defeat.

Add the pivotal fact that two of his core groups of supporters, blacks and hispanics, suffer disproportionately from joblessness, at 16.2 per cent and 11.6 per cent respectively, and the president’s prospects look even dimmer. With the White House admitting there is little chance unemployment will fall before the election next year, the president needs some good advice on how to get people back to work, and fast.

What would John Maynard Keynes tell Obama? He once advised Franklin Roosevelt on how to cure unemployment, but he didn’t make much headway. “I saw your friend Keynes,” FDR told his Labor Secretary Frances Perkins. “He left a whole rigmarole of figures.” In turn, Keynes told Perkins he had “supposed the president was more literate, economically speaking.”

How chronic joblessness affects us all

This is an excerpt from “Pinched: How the Great Recession Has Narrowed Our Futures and What We Can Do About It.”

By Don Peck
The opinions expressed are his own.
Last summer, the phone maker Sony Ericsson announced that it was looking to hire 180 new workers in the vicinity of Atlanta, Georgia. But the good news was tempered. An ad for one of the jobs, placed on the recruiting website the People Place, noted the following restriction, in all caps: “NO UNEMPLOYED CANDIDATES WILL BE CONSIDERED AT ALL.”

Ads like this one have been popping up more frequently over the past year or so; sometimes the ads disappear once the media calls attention to them (a spokesperson for Sony Ericsson said its ad was a mistake). But new ones continue to appear.

Give the states the power to build jobs

By Muhtar Kent and Ram Charan
The opinions expressed are their own.

While the long-term fundamentals of our economy remain strong, America is struggling to recover from the Great Recession. With unemployment rising to 9.1 percent in May, we need more jobs, and we need them now. The good news is that we can create them by encouraging more small businesses and entrepreneurs to compete and win in the global economy.

Here’s the reality today: two out of three new American jobs are created by companies less than five years old. Small and medium-sized enterprises (SMEs) are powerful — indeed essential — engines of economic growth and job creation, not to mention tax revenues.

Unfortunately, not enough SMEs are geared toward competing internationally, despite the vast potential that exists in many global markets.

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