Structural Unemployment

Economic collapse tends to separate viable companies from those whose remaining relevance appears to be hitting a wall of obsolescence. These latter firms have just been buying time with their cash, but when a recession takes that cushion away, they fall like a house of cards in a windstorm. And so it is with job skills, often at these same declining companies, which become marginalized in a confluence of global competition, hyper-accelerating social and technological change, shifting consumer demand and dwindling economic resources.

This severely disappointing reality is particularly hard on older workers who have lost their jobs, too young to retire (or those who retirement savings have vaporized) and too old (often in their own minds) to retrain. At least they lived part of their lives with the dignity of an honest day’s pay, but there are tons of younger people, no longer able to afford to continue their educations because of the economic downturn and poorly educated in a failed public educational primary and secondary environment, who face chronic unemployment and contracting economic opportunities in a world where their skill level is easily replicated with vastly cheaper labor somewhere in the distant international outsourced marketplace. They find low-paying work with limited benefits in “food services” and “custodial care for the elderly or disabled,” and the fall in construction work due to the collapsed housing market and the unattractiveness of stoop labor in the fields put them in a strange place not faced by any generation since The Great Depression.

On March 26^th, Fed. Chairman Ben Bernanke addressed this nation’s seeming inability materially to accelerate the employment statistics, and his words were both chilling and telling of the new American world to come. “In a speech that sought to deflate by turns both optimism and pessimism about the labor market, Mr. Bernanke said the Fed’s efforts to stimulate growth were gradually reducing unemployment, but that the scale and duration of the problem could leave lasting scars on the economy…

“Mr. Bernanke said he was particularly concerned about the unusually large share of the unemployed who have been unable to find work for six months or more. Roughly 40 percent of the unemployed fall into this category, according to government statistics, compared to 25 percent after other recent recessions… In addition to the heavy toll on workers and families, he noted that ‘Because of its negative effects on workers’ skills and attachment to the labor force, long-term unemployment may ultimately reduce the productive capacity of our economy.’” New York Times, March 26^th. Weakness in consumer demand and the availability of cheaper foreign imports also makes recovery problematical. That the government is pulling back on spending can only contract that demand further.

While the Fed can provide monetary relief and guide some of our fiscal policies, there is little it can do about retraining older workers or repairing an educational system that, for the most part, is churning out workers rather unprepared to provide relevant job skills for the current and anticipated marketplace. “Unemployment remains at a high level, but those concerned about inflation say the Fed’s policies cannot help many of those people because they lack skills… Economists describe this kind of problem as ‘structural’ unemployment, rather than cyclical unemployment, which is caused by general economic weakness.” NY Times. For those politicians cutting just about everything in sight, usually without regard for the long-term consequences, I have a very simple question to ask: where exactly is the next generation of value-producing jobs for Americans without training or education going to come from?

I’m Peter Dekom, and I appear to be living in a country where the obvious isn’t.