3.8% Unemployment – Why Not Me?

The world of 21^st century employment most definitely does not treat everyone equally. Even without the advent of highly-sophisticated robotics and automation empowered by self-learning artificial intelligence, the writing was already on the wall for a number of unskilled and semi-skilled workers, or workers whose entire job description has been marginalized or expired. Add the growing layer of automation, which is pressing in on our work force with unparalleled speed, and you have a very large group of people who just have been pushed out of the system. Forever.

Many of these displaced workers might just be too old to begin new careers elsewhere or simply be unsuited for the kind of work that is available. Asking someone in their 50s or 60s to retrain from the ground-up, particularly in jobs that have been in their families for generation, is a tough ask. It’s not surprising how overlaying a map of our opioid crisis mirrors concentrations of unemployable blue-collar workers in industries that just are not coming back.

When outsourcing overseas was the big pressure on large numbers of mostly blue-collar workers – back in the 1990s and early 2000s – nobody in government or private industry lifted a finger to restore their earning capacity as their former jobs drifted thousands of miles away. We just let them suffer. And there’s nothing like a trade war to resurrect outsourcing to foreign workers.

The Great Recession of 2007 and beyond led to governmental austerity, a very rapid erosion of what little was left of private sector labor unions, and a sense of “everybody is hurting” so why care about those abandoned workers? Nobody did. These old world traditional Democrats soon became very angry new world Republican populists. Trump’s promises of restoring obsolete jobs at obsolete pay scales – from coal mining to most manufacturing – will never be fulfilled. He will blame others for a pledge he knew he could never keep. His base will buy his blame game… again.

Our uncaring society is very heavily reflected in the hard numbers. “The U.S. labor market is hot. Unemployment is at 3.8%, a level it’s hit only once since the 1960s, and many industries report deep labor shortages. Old theories of what’s wrong with the labor market — such as a lack of people with necessary skills — are dying fast. Earnings are beginning to pick up, and the Federal Reserve envisions a steady regimen of interest rate increases… So why does a large subset of workers continue to feel left behind?

“There are clues in a new 296-page report from the Organization for Economic Cooperation and Development, a club of advanced and advancing nations that has long been a top source for international economic data and research. Most of the figures are from 2016 or before, but they reflect underlying features of the economies analyzed that continue today.

“In particular, the report shows the United States’ unemployed and at-risk workers are getting very little support from the government, and their employed peers are set back by a particularly weak collective-bargaining system.

“Those factors have contributed to the United States having a higher level of income inequality and a larger share of low-income residents than almost any other advanced nation. Only Spain and Greece, whose economies have been ravaged by the eurozone crisis, have more households earning less than half the nation’s median income — an indicator that unusually large numbers of people either are poor or close to being poor.

“U.S. joblessness may be low and employers may be hungry for new hires, but it’s also strikingly easy to lose a job here. An average of 1 in 5 employees lose or leave their jobs each year, and 23.3% of workers ages 15 to 64 had been in their job for a year or less in 2016 — higher than all but a handful of countries in the study.” Los Angeles Times, July 7^th.

The job market is unstable. While average pay is up, those numbers are unnaturally pulled up by the polarizing increase of pay levels at the top of the economic ladder. The bulk of workers, unprotected by unions and often facing a “gig”-based employment scene, have not benefitted in true increased buying power. Healthcare, which used to be linked to employment, is equally unstable in the contemporary marketplace, and conservative forces want to push out any form of government support for a huge constituency of the middle class.

What’s more, except for the highly skilled or appropriately educated, workers are just plain scared that they are just one small economic slip away from losing their jobs. Plumb the feelings with most workers and you quickly discover (a) they absolutely do not think they will ever achieve the economic well-being of their parents, and (b) live in fear that they will not even be able to afford a seriously downsized lifestyle. Retirement? On what? Social Security? Few have any savings, and there even are currently 255 thousand full-time workers 85 years of age or older! That’s 4.4% of that demographic, up dramatically from 2.6% in 2006.

At a time when these displaced workers need the most support, the feds are giving massive tax breaks to the richest segment that does not need the gift… and cutting the social support to those who have never need support more in order to pay for that inane largesse. The polarization around us, the millions of displaced workers unlikely to work at anything remotely mirroring their past pay levels ever again, represent the harsh new world of work… one that is decidedly going to get a whole lot worse. And government isn’t remotely able to handle what is… and just think of how ill-prepared government is to handle what inevitably will be.

I’m Peter Dekom, but our electorate keeps voting in politicians that are only making the situation worse… much, much worse.