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The Unemployment Conundrum
There is a lot of data floating around about “jobs”. There appears to be some life in our economy but we are still loosing jobs. Some people suggest that job creation will return in a few years. Others are more skeptical.
Maybe we should ask a very basic question. Are the job losses totally related to the economic melt down or are we reaping the consequences of our decision to open our economy to all comers.
As I recall, when we bought into the notion of open international competition we recognized that there would be permanent job losses. The plan was to retrain those impacted. The notion was the new jobs would pay what the old did. That just has not happened! The economic downturn may have been the trigger for accelerated job losses to off shore competition but our decision to compete Americans and their standard of living with the rest of the world with their lower standard could have no other out come than the job losses we have been experiencing for more than a decade.
Consumer buying drove our economy before the economic melt down. We are the consumers. If our incomes are stagnant or declining through no/under employment than we will not have the resources to return to our former consumption habits. The related jobs are lost forever.
Wee appear to have almost a perfect storm driving job losses. Jobs leaving because of international competition and jobs lost because we cannot afford to support the consumption we once could because of the loss of jobs in international competition.
Throwing money at the problem through the historical notion of using government spending to “prime the pump” does not seem to really be working and may well not in the current circumstance. Providing never-ending unemployment benefits will not really address the problem either. I think it is time to focus on job training associated with some form of industrial policy that leads to a sustainable and appropriate number of well paying domestic jobs into which we can train our citizens.
If we continue down the path we started two decades ago, we are likely to see a never-ending decline in the number of well paying jobs and an associate significant decline in our overall standard of living. We really cannot become a “service” economy as only the top 1% will be able to pay for the services. That will leave many people competing for a limited number of low paying service jobs that will drive a further decline in pay.
I might observe that those in government jobs or dependent on government funding that the loss of jobs will cause a loss in tax revenue. Raising taxes will further aggravate the problem as more and more of us will no longer be paying because of our low incomes. Government jobs and services will most certainly be reduced to reflect our lower expectations resulting from our lower standard of living.
Should we not be working to address the 80% of us who are the backbone of the society or should we continue to accelerate the well-being of that top few percent? It is time to wake up and take back our society from those that seem to be trying to destroy it.
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7 November 2009
at 3:40 p.m.
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justbegintowrite (Ronda Miller) says…
How can the government be more proactive in getting some of the jobs we lost (bad choice of words I know) back in your opinion George?
I suspect we are in for a lasting and drastic change from our usual lifestyle. We have been spoiled as a nation (I understand there are many citizens who have never had much of anything) and I personally don't see anyone with a plan to change what has come about through greed and outsourcing.
I watched former Vice President Al Gore on a program this past week and he was discussing several jobs that are currently overseas with Americans then importing the majority of the product(s) being made for our own use. Out of the top ten manufacturers, America had only two of the plants. (One that stands out in my mind is the windmills used to generate electricity) He said something about one hour of sunlight is enough to take care of all the energy planet Earth needs for an entire year. We need to be proactive as Americans have been in the past: create, facilitate and adapt.
7 November 2009
at 5:55 p.m.
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Moderate (George Lippencott) says…
Ronda,
We cannot get them back unless we think outside the box. There may be green stuff elsewhere but if we continue to follow our treaty obligations, the cheapest source will prevail and that unfortunately will be overseas.
Our greed did not do this. If you accept that argument, you let the people who did off the hook. The top 10 % or so have seen their incomes advance at double digits across the years while the average citizen has seen it decline. The average citizen, middle 70%, has not been the problem. They are struggling to maintain standard of living and losing. Blaming them is a travesty.
Al Gore prospers and is now a multi-millionaire. The rest of us struggle. Why?
7 November 2009
at 6:25 p.m.
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Marion (Marion Lynn) says…
Cut taxes to allow more free money for investments.
oh wait
can't do that now
three trillion $ debt and “stimulus” for all
7 November 2009
at 6:54 p.m.
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Godot (Anonymous) says…
George, I agree with you on this: “Consumer buying drove our economy before the economic melt down. We are the consumers.”
I fundamentally disagree with you on this: “If our incomes are stagnant or declining through no/under employment than we will not have the resources to return to our former consumption habits.'
Why? It is because our incomes have been stagnant for at least the last decade. It was consumer debt that produced consumer buying.
I don't know how to reproduce a chart on this forum, but I can tell you that if you search the internet you will find charts that show that, adjusted for inflation, incomes have barely increased since the early 90's, while debt has skyrocketed.
We have been living in a government induced delusion that easy credit equals income, and that we deserve to buy, buy, buy, regardless of what we earn.
If we are to claw our way out of this depression (yes, it is a depression) the solution is not to buy, buy, buy, it is to produce, produce, produce.
7 November 2009
at 7:21 p.m.
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Moderate (George Lippencott) says…
Godot (Anonymous) says…
Your right-it has been more than a decade. I simplified. Sorry! The point remains. For the last decade people have tried to maintain standard of living in the face of declining income. Some ran up a lot of debt. The Commerce web site shows avearge debt. It was about 2K. Managable-not greed. Why should they not try given they were not party to the loss of income.
How can you produce if no one is buying?? People are reducing their debt-not buying. We have to get out from under the unfair competition we created. Do you really believe that you or anybody else has the right to reduce incomes by as much as they have been reduced? As a democracy should the people not have a say in all this or should our elites drive the outcome from which they exempt themselves.?
For
7 November 2009
at 10:18 p.m.
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Godot (Anonymous) says…
Expecting growth to result from spending that exceeds income is the definition of insanity.
8 November 2009
at 9:46 a.m.
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Moderate (George Lippencott) says…
Godot (Anonymous) says…
And who is doing that? Maintaining a manageable debt load that is properly serviced works but it only drives consumption when you first run it up after that maintaining it drives nothing. Greed happens when you keep adding to your debt until there is no hope of servicing it and you fall into arrears. But then are we not rewarding this with our various bailout programs?
9 November 2009
at 12:53 p.m.
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honeychild (Mel Briscoe) says…
on somewhat of a related note, the hawker beechcraft plant that has been here in salina for 50-60 years is going to close. they just announced that today.